Colorado’s PERA shortchanging state workers and taxpayers
Problems with Colorado’s public employee pension system are making it hard for our state government to attract some of the best employees. That’s the persuasive finding of a new study by the Urban Institute, a left-leaning think tank in Washington. An employer’s retirement plan is part of an overall compensation package designed to entice and […]
Fairness in retirement age a necessary public pension reform
Imagine that you and your neighbor are friends and professional peers. You belong to the same professional organizations. You each have worked for your respective employers for a long time as retirement approaches. But one of you works for a private employer, the other for the State of Colorado. The state employee can retire with […]
Preventing Bankruptcy in State and Local Pension Plans in Colorado
State and local governments report the funding status of their pension plans in financial statements following standards set by the Government Accounting Standards Board (GASB). Historically, those standards allowed state and local governments to use an actuarial model and to discount liabilities based on the long-term yield on the assets held in the pension fund. The Colorado Public Employees’ Retirement Association (PERA) uses an 8 percent discount rate comparable to that used in most state and local pension plans. GASB also allowed state and local governments to use a smoothing technique to calculate the funding status of the plans. With this smoothing technique, losses incurred on assets in one year could be averaged over several years.
Unfunded Liabilities in PERA’s Health Plan Accumulate
by Penn Pfiffner and Barry Poulson This legislative session Colorado HB1250 was introduced to begin addressing an unfunded billion-dollar liability in the Public Employee Retirement Association’s (PERA) retiree health care benefit program. Its own sponsor then killed the bill after it came under a fire storm of hysteria-tinged and false criticisms, fueled by one-sided media […]
Why Colorado Should Shift to a Defined Contribution Retiree Health Plan
By Barry W. Poulson, Ph.D. Colorado taxpayers are on the hook for more than $1 billion in unfunded liabilities incurred in the defined benefit retiree health plan administered by the Public Employee Retirement Association (PERA). An additional $79 million in unfunded liabilities was incurred in 2008, reflecting both a rapid growth in retiree benefits and […]
Public Employee Benefits Are Out of Sync with Economic Reality
By Barry Fagin “Hypocrite! You’re always writing about how government needs to be smaller. But you work for a government institution! Why don’t you write about that?” I get e-mails like this from time to time, I assume from someone who hasn’t read a lot of my columns and instead just typed my name into […]
How to Save a Billion Dollars in Other Post-Employment Benefit Costs
This study focuses on the retiree health plan administered by the Colorado Public Employees’ Retirement Association (PERA). The PERA Health Care Program is a cost sharing multiple-employer plan. The “employers” in this context are the various governments that hire most public employees, such as public school teachers, fire fighters, police officers and state employees. Under this program, PERA subsidizes a portion of the premium for health care coverage, and the retiree pays any remaining amount of that premium. The Colorado legislature created the Health Care Trust Fund in 1999 to provide state subsidies to the Health Care Program.
