Want a Full-Time Pension for Working Part-Time? Be a Kansas Lawmaker.

by | May 31, 2016

By Scott Canon

Before the Kansas Legislature adjourned in Topeka early this month, lawmakers passed a budget that let the governor sort out the details of where to cut spending.

But they didn't need to worry about how their pensions would fare.

Legislators get a retirement package as unusual as it is generous, sealed with a taxpayer guarantee.

The one-of-a-kind Kansas pension plan lets representatives and senators sign up for full-time pension benefits while working their part-time elected positions.

"Legislators," notes an employee benefit sheet explaining the pension plan to new lawmakers, "have a special deal here."

They get a modest salary for the roughly four months they spend each year in Topeka, but their pensions grow as if the state paid them for a year-round gig.

All told, a salary shy of $15,000 makes a lawmaker eligible for a pension that any teacher, road worker, prison employee or Kansas bureaucrat could qualify for only if their actual pay ran north of $90,000.

"It's not fair or appropriate," said Rebecca Proctor, the executive director of the Kansas Organization of State Employees, a union representing 8,000 workers.

She was a member of a Kansas Public Employees Retirement System study commission that in 2011 suggested changing the system for legislators. The Legislature never acted on that recommendation.

Instead, she said, lawmakers have attempted to shore up KPERS by increasing contributions required of regular state employees. In addition, some legislators have floated proposals limiting whether those workers could count unused vacation and sick time toward their pension benefits.

"It's hypocritical," Proctor said.

To be sure, members of the House and Senate must pay into the kitty, 6 percent of the supposed salary on which their pensions are calculated. But it's such a good deal that few pass it up.

Taxpayers typically pay about twice an employee's contribution toward the pension. So the more legislators sign up for, the more the state also must chip in.

In some ways, Kansas' oversized pension benefit tilts the scale for legislators who are paid less than those in 41 other states.

(Some states pay flat salaries, others allot money for each day a legislature meets. California treats its lawmakers -- a relatively small number representing a vast population -- as full-time workers and pays them more than $97,000 a year. In New Mexico, legislators get only living expenses.)

Perhaps only Texas rivals the Sunflower State retirement plan for lawmakers. There, legislators making less than $8,000 a year tie their pension to district judges' six-figure salaries.

Missouri lawmakers also get an outsized pension plan, although it doesn't pay as well as the Kansas deal and comes closer to aligning with their salaries.

Many legislators concede the pension is better than what other state workers get for retirement, but they argue it makes up for the low wages lawmakers get while in office.

The Kansas deal has been in place since 1982. Today, some 158 retired legislators draw from $880 to $55,999 a year. The average legislative pensioner in Kansas gets $13,109 yearly.

Payouts vary mostly depending on years of service. Lawmakers can increase that figure by paying extra contributions so that time in the military, in the Peace Corps or for serving on a city council counts toward their pension total.

Again, when a legislator "buys back" those years of pension benefits for time on a county commission or other public service, taxpayers must roughly double what that lawmaker puts into the pension.

But the most distinct thing about the perk for Kansas lawmakers is that it "annualizes" legislators' part-time wages to create full-time-size pensions. The National Conference of Legislatures shows no other state offering that windfall twist.

12-month accounting

Here's how it works.

Kansas legislators get two forms of salary.

First is their per diem, $88.66 for each day the Legislature is in session. That typically runs slightly less than $8,000 a year.

Second, lawmakers get an allowance of about $7,000 a year for the time they're not convened in Topeka -- when most work other jobs -- but are in their districts fielding questions and complaints from constituents.

So the salary of a legislator runs about $15,000 a year -- arguably low pay for a job that requires at least four months of often long days in Topeka when they can't practically earn money elsewhere.

There's more. Lawmakers also pocket $140 for each day they're in session to cover lodging, meals and other living expenses in Topeka. (Any legislator who lives within 50 miles of the statehouse must pay taxes on that money.)

The pension plan then treats all those payments in a way that only happens in Kansas, and only for lawmakers. It annualizes each of them, as if they were all salary and as if the money were earned a full 12 months of the year.

"If you could annualize what teachers get paid for nine months, they could kick up their retirement a considerable amount," said Ernie Claudel, a former teacher and co-chairman of the Kansas Coalition of Public Retirees. "But they don't have that choice."

In fact, no other participants in the KPERS pension system have that choice. Only legislators, for whom the deal is sweetened, get to choose whether to join.

"It doesn't pass the smell test," said Edward Zelinsky, a pension expert at Cardozo Law School in New York City. "Even if the absolute dollars are low" -- legislators make up a tiny percentage of the 290,000 workers enrolled in KPERS -- "this is a signal to a deeper kind of problem that the system is stacked. ... If it weren't wrong, why would they have to make it so obscure?"

Interviews with those who served as governor, Kansas Senate president and speaker of the House when the pension-boosting system sprang to life provide few specifics about how it was born. No one recalls the exact legislative wrangling over the issue.

Rather, they recall long-standing efforts by lawmakers wanting to boost their pay -- but knowing that voting yourself a raise could doom re-election. Many believed a job that paid modestly but consumed several months every year was largely limiting the Legislature to people who were retired or independently wealthy.

John Carlin, a legislative leader in the late 1970s before an eight-year run as governor that started in 1979, didn't recall how the annualization took shape. But the Democrat remembers regular efforts to boost pension benefits, sometimes in legislative amendments written to benefit a single lawmaker.

"You'd find some legislator had gone to the committee that handled it, put in a proviso that raised the benefits for an individual," he said, by setting up arcanely narrow definitions of who would be eligible. Such efforts almost always failed.

But he saw those efforts as symptomatic of a push to raise lawmaker compensation and how politically toxic that could prove.

Marvin Barkis was elected to the Kansas House in 1978 and served as speaker from 1991 through 1994. In that period, the state's finances were relatively stable. This year, lawmakers left behind a $290 million budget shortfall that prompted Gov. Sam Brownback to make major cuts to the state highway fund, Medicaid and higher education and trim most state agency budgets by 4 percent.

Barkis said he has only a vague recollection of changes in legislative pensions.

"At the time, it didn't feel right to me," he said. "It was a system for basically getting something done that was going to enhance your future income that no one was watching. I don't remember any reporting on it. I don't remember any outcry."

Audrey Langworthy, who served in the state Senate for 16 years beginning in the 1980s, said she has no qualms about the pension she gets today.

"I considered it a full-time job" that paid poorly, the former lawmaker from Prairie Village said. "I don't feel like I am raking in too big of a pension because I feel like I worked pretty hard."

Missouri nest eggs

Pensions for Missouri legislators work quite differently, and the formula has become less generous over the years.

Yet ultimately Missouri lawmakers still can draw larger pensions than workers making comparable salaries from the state.

A Kansas lawmaker who served 10 years can expect annual pension benefits of $15,142. A Missouri legislator with a decade of service could expect annual retirement payments of $14,366.

One key difference is term limits. Kansas has none. In Missouri, a legislator can serve eight years in each chamber of the General Assembly, theoretically spending 16 years as a lawmaker.

But few now spend more than eight years as a Missouri legislator, and none could build a pension over decades the way most state employees can.

In those shorter stays, however, their pensions build much quicker than other employees. While 10 years in the legislature would mean an annual pension of $14,366, any other state worker with the same salary could expect retirement payments from the state of $6,106.

"That's always bothered me," said Rep. Nate Walker, chairman of the House Pension Committee. "(But) no one has come to me with a plan or a proposal to change things."

The package has shrunk in recent years. Cost-of-living increases have disappeared for the current legislators' pensions. The age at which legislators can begin to draw from their pensions has moved from 55 to 62 (or where the person's age and years of service equal 90). In Kansas, normal retirement eligibility comes at age 65, or age 60 with 30 or more years of service.

Like their counterparts in Kansas, Missouri lawmakers also can buy more years of service to their pension for time they spent in the military or for work in local government, although that work must be full time.

Missouri legislators make more than those who serve in Topeka. They're paid $35,915 a year and get an extra $103 a day for each day the General Assembly is in session. To calculate their pensions, their monthly pay is divided by 24 and multiplied by years of service. With 16 years in the legislature, the maximum allowed by term limits, they can pull down $24,000 a year in retirement.

If the pension doesn't fit the salary, said Rep. Mike Leara, that might be because the salary doesn't fit the job.

"It eases the pain of it. It's not a part-time job. ... It is a year-round job," said the St. Louis area lawmaker, who is also a pension consultant. "The value (of a legislator's time) is not $35,915. I think (the pension) is appropriate."

(c)2016 The Kansas City Star (Kansas City, Mo.)