PERA wants help in 'closing the gap'

Face The State Staff Report

Trustees of Colorado's Public Employees' Retirement Association, the pension fund covering over 435,000 current and retired state and local government workers, are asking for help in closing a $17 billion gap in its balance sheet. That "unfunded actuarial liability" represents analysts' estimate of the difference between PERA's future assets compared to its obligation to pay benefits. The General Assembly this spring directed PERA to develop proposed law to address the shortfall, which has left the pension only 51% funded.

In 2008, PERA's balance sheet took a hit from the global economic downturn when its investment portfolio shrank by $10.5 billion. Over the same period, contributions totaled $1.6 billion, and benefit payments rang in at $2.9 billion.

The pension's trustees are embarking on an 8-stop "listening tour" throughout Colorado, which kicked off last week with a stop at the Denver Police Protective Association. Hundreds packed the PPA meeting hall, most either current state employees or retirees receiving benefits. A number of state lawmakers - all Democrats - were also in attendance.

PERA CEO Meredith Williams told assembled retirees that public input would be "a critical part of the process to strengthen and secure your retirement plan and to secure PERA's long-term stability."

Saying the fund could not "invest itself out" of its unfunded liability, PERA general counsel Greg Smith reviewed options for either trimming benefit outlays or increasing income. Those in attendance were asked to complete a 2-page "input form" (PDF) indicating support, opposition, or neutrality for each possible change. Any alteration to PERA's business structure or to employees' benefits or contribution levels would need to be made in state law.

Tune in Wednesday at 11 am to hear FTS managing editor Brad Jones discuss PERA's current status, and options for returning the pension to solvency, on 850 KOA radio.