In November of 2016, Colorado’s Public Employees Retirement Association Board (PERA) realized it had a problem. Not only did the state’s public pension system have a current unfunded liability of $50 billion, but overly-optimistic expected returns and overly-pessimistic mortality tables would leave the plan at less than 20 percent funded in a couple of decades – and that was if it met its expected returns.
Thus began a year-long quest for a reform package, the fourth such effort since 2004, to shore up the plan’s finances. PERA and Gov. Hickenlooper’s office each produced plans, and after months of consultations, Senate Republicans and House Democrats produced a bipartisan bill of their own, Senate Bill 18-200, a heavily amended version of which recently passed out of a Democrat-controlled House of Representatives committee. The bill as amended represents a missed opportunity that would only double down on the worst aspects of public pension finance.
The version of the bill that passed out of the Republican controlled senate contained a number of solid provisions revising the funding and benefits formulas, and it also increased legislative oversight, added independent voices, and expanded the defined contribution (DC) option for new employees.
Read the whole article originally published in The Hill on April 24, 2018.