In conjunction with the Morgridge College of Education and Truth in Accounting, the School of Accountancy is hosting a seminar to discuss the future of the Colorado Public Employees’ Retirement Association on Tuesday, May 1, in Margery Reed Hall’s Reiman Theater. PERA executives will discuss their current funding challenges and proposed long-term solutions being considered by the Colorado General Assembly. The event is free and open to the public. It begins with a welcome reception at 5:30 p.m., followed by a presentation and Q&A session at 7 p.m. Attendees can also earn one CPE credit. RSVP at danielsrsvp.du.edu/pera2018.
What is PERA?
Acting as a substitute for Social Security, PERA provides retirement and other benefits to the employees of more than 500 government agencies and public entities in the state of Colorado; over 560,000 Coloradans (one in 10) are members of PERA. Benefits are pre-funded, which means while a member is working, he or she is required to contribute a fixed percentage of their salary to the retirement trust funds. This percentage is currently 8 percent for most members, while employers contribute between 20 and 23 percent of an employee’s pay.
PERA distributes almost $5 billion in benefit payments each year, and most of this money is reinvested into the Colorado economy by recipients. If you know public school teachers, public university or college employees, state employees—including state troopers and judicial employees—or local government employees, then you probably know a member of PERA.
What are the funding challenges facing PERA?
As with most state pension plans, PERA is severely underfunded. Currently, PERA only has enough money to pay about $0.58 for every dollar owed to current and future retirees. The Colorado General Assembly is currently considering Senate Bill 200, a bipartisan bill that purports to be the long-term solution to shore up PERA’s finances. However, the bill will not make it through the General Assembly without significant revisions because the bill is being hotly contested by all sides. One taxpayer recently wrote the following:
“Senate Bill 200 does nothing to actually fix the problem. It only puts taxpayers, who have no tangible stake in the success of the program, on the hook. If teachers, public employees and other contributors to PERA are staring down the barrel of insolvency, it is their job to figure it out. Private citizens and local government bodies have absolutely no mandate to share in another failed government entitlement program.”
However, PERA members view things quite differently. A half-dozen employees from the Colorado Department of Corrections noted that the average life span of those working in a correctional facility is 58 years and suggested that raising their retirement age to 65 was not only unfair but would keep aging guards on the job even after they are unable to properly restrain prisoners.
A lifetime teacher wrote the following in a recent Denver Post opinion: “As an educator for 40 years, I had no choice but to join PERA and was promised a retiree package if I fulfilled my obligations. After years of substandard pay, I looked forward to a modest pension, only to find that this promise was hollow. I cannot regain the 25 years I put into my career. I would imagine that any young person would not want to pursue the teaching profession — low pay, overbearing bureaucracy and a retirement plan that is only binding on one side. No wonder there is a teacher shortage.”
Regardless of whether or not you are a member of PERA, everyone should be aware of the potential ramifications of this bill. Because of PERA’s funding challenges and the solutions being proposed, teachers, employers and even all Colorado taxpayers could be impacted. Everyone has an opinion, and the final bill will leave many Coloradans unsatisfied, but likely no one in Colorado will be left unaffected.
To learn more about the creation of this crisis and how to solve it, attend The Future of Colorado PERA on Tuesday, May 1, at 5:30 p.m. in Margery Reed Hall’s Reiman Theater. RSVP at danielsrsvp.du.edu/pera2018.