A coalition of business groups and leaders have issued a report calling for study of and changes in the Public Employees’ Retirement Association, the pension system that covers all Colorado teachers, state and many higher education employees and some local civil servants.
Signers of the report include Colorado Succeeds, the business-oriented education reform group, and several foundations that support education initiatives. The study, released Monday, raises concerns about the funding level of PERA and urges creation of a system that is fiscally prudent and financially sustainable, promotes a high quality workforce, provides adequate retirement income and is transparent and adaptable to change.
The report offers no specific proposals but rather suggests “the need to take further action on a broader scale to improve the public retirement system in Colorado. In response, the group will work in the latter half of 2013 to promote conversation around public retirement systems and find common ground for improving Colorado’s structure.”
The report surfaced just a few days after PERA released its Comprehensive Annual Financial Report, which showed the pension system had investment returns of 12.9 percent in 2010.
A comprehensive – and bipartisan at the time - 2010 overhaul of PERA was designed to set the system on a 30-year path to financial sustainability. Part of that is the PERA board’s current assumption of average 8 percent investment returns over that time frame. The overhaul also changed the terms of the pension system for new hires and allowed PERA to cut cost-of-living increases for retirees, a move that remains under court challenge.
Since 2010 PERA has been under constant attack by Republican lawmakers, who argue the 8 percent assumption is unrealistic. PERA’s short-term financial challenges are the result of both the 2008 recession and system changes made urged by Republicans in the early part of the century.