According to a new study released by The Pew Center for the States, Kansas is one of only eight states meriting “serious concerns” for “having failed to make any meaningful progress toward adequately funding their pension obligations.”
According to the study, Kansas was also among 10 states that paid the lowest percentage of their annual required contribution for pension plans, having fulfilled only 65 percent of what the state government owes.
Addressing this issue will likely force Kansas to reduce benefits, raise taxes, or slash government services. But according to the report, Kansas already falls into the category of “very minimal obligations.”
“They generally do not provide retirees with help in paying premiums, but such states may allow retirees to be on the same plan as active employees, thereby incurring some costs associated with having older plan members who are likely to have more health problems,” the study said.
But looking at percentages can sometimes be misleading. For example, Kansas’ obligations totaled $316 million, but New Jersey’s obligations totaled $69 billion. Kansas faces a 40 percent pension deficit; New Jersey faces only a 20 percent deficit. 40 percent of $316 million (about $126 million) is MUCH lower than 20 percent of $69 billion (about $14 billion). So while Kansas faces a higher debt percentage, states like New Jersey face a much higher debt.
A $1 trillion gap exists between the $3.35 all states owe in benefits, and the $2.35 trillion states actually have – according to the study.