{"id":93362,"date":"2025-09-29T21:13:13","date_gmt":"2025-09-29T21:13:13","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/93362\/"},"modified":"2025-09-29T21:13:13","modified_gmt":"2025-09-29T21:13:13","slug":"colorado-pera-looks-at-ways-to-alleviate-pain-of-pension-reform","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/93362\/","title":{"rendered":"Colorado PERA looks at ways to alleviate pain of pension reform"},"content":{"rendered":"

\"Story<\/a><\/p>\n

For the first time since the state pension\u2019s finances cratered<\/a> in the early 2000s, the Colorado Public Employees\u2019 Retirement Association is putting together a legislative proposal to bring some relief to its beleaguered members.<\/p>\n

At the pension board\u2019s annual retreat in Colorado Springs earlier this month, pension officials offered a number of ideas to prevent \u2014 or at least delay \u2014 another round of automatic adjustments to the system\u2019s finances.<\/p>\n

If the legislature agrees, the changes could spare retirees from additional cuts to their monthly pension checks, and stave off even higher payroll deductions from public worker salaries.<\/p>\n

PERA is also considering reducing contribution rates for local governments and the judicial branch, both of which are in much better financial shape than the system as a whole. And, if the pension\u2019s finances continue to improve, officials are modeling what it would cost to send bonus checks to retirees in good financial years.<\/p>\n

The moves mark a shift for PERA after decades of belt-tightening<\/a>.\u00a0And to some critics<\/a>, they\u2019re a sign that the retirement system is finally taking the concerns of its 725,000 members into account, rather than focusing solely on improving its balance sheet.<\/p>\n

Avoiding an auto-adjust<\/strong><\/p>\n

The automatic adjustment provision<\/a> was a key pillar of Senate Bill 200<\/a>, the 2018 pension overhaul that brought PERA back from the brink of insolvency.<\/p>\n

The measure called for higher contributions from public workers and their employers, while reducing retiree cost-of-living adjustments so much that their pension checks now grow slower than inflation. It also triggered automatic benefit cuts and contribution hikes whenever the pension\u2019s finances strayed too far from a 30-year path to full funding.<\/p>\n

\u201cWhen we talk to our stakeholder groups, our members and the legislature, all are united in not wanting another AAP (automatic adjustment),\u201d Andrew Roth, PERA\u2019s executive director, told The Colorado Sun in an interview.<\/p>\n

The measure has improved PERA\u2019s financial stability dramatically<\/a>. But it has also cost members more than many expected in 2018. The automatic guardrails kicked in twice in the first four years, squeezing public worker and retiree paychecks even as inflation spiked in the wake of the pandemic.<\/p>\n

All the while, PERA\u2019s staff and board insisted on staying the course, shrugging off complaints from retirees and public employers.<\/p>\n

Cherry Creek Schools CFO Scott Smith said the proposal from Roth, who took over as executive director last year, was a welcome shift after years of what he viewed as unresponsiveness toward member concerns.<\/p>\n

\u201cI think what we\u2019ve seen is that the original version of SB 200 was too punitive to our membership and too lucrative to the PERA business operation,\u201d said Smith, a former PERA board member. \u201cI think Andrew (Roth) gets it \u2014 and has really been having the membership at the forefront of his decision making, which I think is a change from the past.\u201d<\/p>\n

PERA\u2019s plans for 2026<\/strong><\/p>\n

PERA officials say they aren\u2019t planning major revisions to Senate Bill 200. Even if their ideas become law, pension benefits wouldn\u2019t revert back to more generous levels any time soon. PERA owes $28.9 billion in unfunded benefits to retirees.<\/p>\n

Nonetheless \u2014 with a few tweaks to how PERA distributes the money it already receives \u2014 Roth says the pension could improve its financial trajectory, while making it less likely that further benefit cuts and contribution hikes kick in.<\/p>\n

First, Roth wants lawmakers to let PERA divert all of the state\u2019s $225 million annual payment to where it\u2019s needed the most: the pensions of public school workers, which are the most underfunded of any of PERA\u2019s five divisions.<\/p>\n

The school division has just 66% of the money it needs to pay benefits in perpetuity. It\u2019s also the only division that isn\u2019t on track to be fully funded by 2048, the target date set in state law.<\/p>\n

Local governments are expected to hit full funding by 2036, while the state division is expected to get there by 2044. But schools remain five years off course, with a projected full funding date of 2053.<\/p>\n

Ultimately, diverting the full $225 million to school pensions would be to everyone\u2019s benefit, Roth says. Today, the poorly funded school division can trigger benefit cuts and contribution hikes for every PERA member and employer, including state agencies, the judicial branch and local governments.<\/p>\n

PERA also wants to redirect half of the money employers pay into a health care trust fund (today it\u2019s about 1% of payroll), and use it to pay off the pension\u2019s unfunded debt instead. The health care trust subsidizes medical premiums for those enrolled in PERA\u2019s Medicare Advantage plans. But its funding is in much better shape than the retirement plan. The trust fund is expected to be 100% funded within the next 5 years.<\/p>\n

Finally, PERA is proposing to reduce contribution rates for public employees and government agencies in the two best-funded divisions: local government and judicial. Doing so wouldn\u2019t have much effect on the pension\u2019s overall finances, and both divisions would still be on a track to full funding within the next three to six years.<\/p>\n

If all three changes were enacted, PERA\u2019s actuaries say it could delay the next auto-adjustment until 2044 \u2014 assuming the pension hits its other financial targets along the way. Currently, they expect one to happen in 2034, barring a market downturn before then.<\/p>\n

\u201cNot having an auto-adjust is helpful to every PERA member,\u201d said board chair Rebecca Freyre, a Court of Appeals judge. \u201cWhether they\u2019re a retiree, an active (member), an employer, a beneficiary, trying to avoid that is in everyone\u2019s best interests.\u201d<\/p>\n

Roth told The Sun he wants to bring the changes before the General Assembly next legislative session, which starts in January.<\/p>\n

Bigger changes won\u2019t happen soon<\/strong><\/p>\n

PERA\u2019s presentation<\/a> didn\u2019t stop there.<\/p>\n

Its actuaries briefed the board on other ideas to provide relief, like giving retirees a bonus 13th monthly check in some years, or making it easier to reverse benefit cuts and contribution hikes after they\u2019ve kicked in.<\/p>\n

But, Roth said, he doesn\u2019t expect PERA to be in a position to do so for years to come.<\/p>\n

\u201cWe\u2019re focused on retirees and how we can be supportive \u2014 the problem is (cost-of-living adjustments) are expensive,\u201d he said.<\/p>\n

Each 1% annual increase for retirees adds up to $7 billion in new liabilities for the pension. A 13th check wouldn\u2019t cost as much, because it\u2019s a one-off payment that wouldn\u2019t compound over time, \u201cbut it still costs money,\u201d Roth said. \u201cThe state at this point in time is facing deficits. So I think a 13th check for retirees, realistically, is likely years out.<\/p>\n

\u201cHowever,\u201d he added, \u201cI think it\u2019s worthwhile to have the conversation, because at least we\u2019re talking about it. We\u2019re acknowledging the pain that our retirees experience.\u201d<\/p>\n

Type of Story: News<\/p>\n

Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.<\/p>\n","protected":false},"excerpt":{"rendered":"For the first time since the state pension\u2019s finances cratered in the early 2000s, the Colorado Public Employees\u2019…\n","protected":false},"author":2,"featured_media":93363,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[177],"tags":[79,60493,60494,60495,60496,18,19,17,60497,234,235,4121],"class_list":{"0":"post-93362","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-colorado-general-assembly","10":"tag-colorado-legislature","11":"tag-colorado-politics","12":"tag-colorado-public-employees-retirement-association","13":"tag-eire","14":"tag-ie","15":"tag-ireland","16":"tag-pera","17":"tag-personal-finance","18":"tag-personalfinance","19":"tag-state-pension"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/93362","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=93362"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/93362\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/93363"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=93362"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=93362"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=93362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}