An AP News Analysis

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Despite the questions, chances are still good the compromise will pass. It emerged from negotiations between three senators and three House members and reconciles differences between the two chambers. Approval by both chambers on up-or-down votes would send the measure to Gov. Sam Brownback.

And Brownback said last week, "It sounds like a reasonable compromise."

The Kansas Public Employees Retirement System projects a $7.7 billion shortfall between its anticipated revenues and the benefits promised through 2033 to teachers, police, judges, firefighters and other government workers.

Public employee groups contend the state has shorted its contributions to KPERS for years, and both chambers agreed that the annual amount should increase. Under the compromise bill, the state would phase in a $28 million increase in its annual contribution to KPERS over four years, starting in July 2013.

Republicans control both legislative chambers, but House and Senate GOP leaders disagreed over how quickly the state should move to a 401(k)-style plan for new public employees. The House approved a plan to start a new plan for workers hired after June 2013; the Senate called for a commission to study the issue and others.

Negotiators agreed to set up a 13-member commission, requiring it to make recommendations by the end of the year, with a vote in at least one chamber next year on its proposals.

The result disappoints backers of moving to a 401(k)-style plan for public employees. They argue that the state can't sustain its traditional plans, which guarantee benefits up front, based on a worker's salary and years of experience. The solution, they say, is tying benefits to investment earnings, as 401(k) plans do.

Conservative economists and think tanks argue that each new worker enrolled in a traditional plan increases its long-term liabilities — digging any hole deeper — so that any delay is foolish.

"I can only trust that there's going to be a good opportunity in front of the study commission to get that debate out there," said Derrick Sontag, state director for the small government, anti-tax group Americans for Prosperity. "We just let another year go by without starting to solve the problem."

Public employee groups and Democrats loathe proposals to move toward a 401(k)-style plan, believing such a step will make benefits less secure. Also, a recent KPERS report said a 401(k)-style plan would have startup costs, slowing efforts to close the long-term funding gap and costing the state and local governments an additional $1.2 billion in contributions to KPERS through 2033.

Senate Minority Leader Anthony Hensley, a Topeka Democrat, said he's wary of the compromise because five members of the study commission will be appointed by Brownback and the remainder, by legislative leaders.

Brownback, a Republican who took office in January, has already said he favors a move toward at least a "hybrid" plan for new hires, giving them the option to join a 401(k)-style plan. House Speaker Mike O'Neal, a Hutchinson Republican who favors moving to a 401(k)-style plan, will have two appointees to the commission.

Hensley noted that seven commission members, a majority, will be appointed by supporters of a new 401(k)-style plan for public employees. The Democratic leader has reason to believe the fix would be in: Brownback predicted during an April 21 interview with The Associated Press that any study would recommend at least a "hybrid" plan.

Meanwhile, Hensley contends there are legal issues with other provisions of the bill, giving existing employees a choice of paying a higher percentage of their salaries into KPERS or giving up future benefits.

Most state officials have long assumed that Kansas law and past court precedents prevent the state, in overhauling pension plans, from taking too much away from public employees. The assumption is that a pension plan is viewed as a contract.

"You can't really break that contract," Senate President Steve Morris, a Hugoton Republican, said last week.

Hensley is confident there will be a lawsuit if the bill passes and Brownback signs it into law, though he acknowledged, "That's just my instincts."

In the House, O'Neal said last week that he believes the compromise bill can withstand legal scrutiny because lawmakers have received a "thumbs up" from their legal staff.

"In a very macro sense, the report back to me is, the questions that were raised about the agreement that was reached have been resolved, and there's not been an opinion that we would have any legal problems moving forward," O'Neal told reporters in a question-and-answer session.

Morris and others note that the compromise bill gives employees a choice, and the exact type of potential benefit cuts haven't been the subject of lawsuits in the past — lessening the chances of a successful legal challenge.

But, Morris acknowledged, "That's a big question mark."

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EDITOR'S NOTE: Political Writer John Hanna has covered Kansas government and politics since 1987.