KPERS officials report improved returns, about $30B in assets and technical cleanup bills

Officials from the state public pension system briefed the Committee on Financial Institutions and Pensions on investments, funding status and requested technical statutory changes.

Alan Conroy, executive director, told the committee the system’s funded ratio is holding around 74–75% and that the board’s near-term goal is to exceed 80% funding with a longer-term objective of full funding. Conroy said the unfunded actuarial liability for the system stands near $10 billion and that the state’s continued payment of actuarially required employer contributions is critical to improving the ratio.

“Our latest actuarial valuation, we’re holding steady at 75% as the funded ratio,” Conroy said, adding that legislated employer contributions and recent strong investment returns have driven significant improvement.

Bruce Fink, the pension system’s chief investment officer, reviewed the investment program and the Investment Policy Statement that governs asset allocation and portfolio management. Fink said asset allocation decisions — set through an asset‑liability study every three to four years — drive most of the long‑term return outcomes and that the board models the portfolio to achieve a 7% long‑term return assumption.

Fink cited recent performance figures: fiscal‑year returns (to June 30) of 10.3% and preliminary calendar‑year 2025 returns of about 13.4%. He and Conroy said assets climbed from about $27.3 billion in mid‑2024 to over $30 billion by September 2025 and were approaching $31 billion by year‑end.

Lawmakers asked about the pension obligation bonds issued in past sessions (2004, 2015 and 2021 were discussed) and whether another bond tranche is likely. Conroy said no new bonding request is pending and that current bond‑market conditions make additional long-term borrowing less attractive.

Committee members also pressed staff on safeguards to prevent benefit payments after death; staff described death‑match checks with Vital Statistics and Social Security records, an annual birthday‑contact program for very elderly recipients and a $6,000 death benefit for beneficiaries.

Conroy said the board has requested minor statutory “technical cleanup” bills — on working after retirement, KPERS affiliation, and board leadership election procedures — that the committee may see during the session. The committee had no formal votes on the requests during the briefing.