Today I voted against Senate Bill 001, on third reading and final passage, regarding changes to the state’s pension program, the Colorado Public Employees Retirement Association (PERA).  Unfortunately, the bill still passed by a 36-29 margin.  Over 440,000 state, school and local government employees count on PERA for their retirement benefits.  Pueblo has some of the highest concentration of PERA members and retirees in the entire state.

In the end, I voted against the proposal because I don’t believe that the problems with PERA need an immediate fix and the solutions proposed unduly placed a burden on our seniors.

A closer look at solvency:

PERA lost a lot of money during 2008 and into 2009.  Most of the losses to the PERA savings were related to the global financial crisis and devalued assets.  However, the models projecting PERA’s future solvency do not take into account the likelihood of an economic rebound.  The markets ebb and flow.  Ultimately, we should see them rebound.  Also, under the worst-case projections, just one of PERA’s divisions will be insolvent in twenty-seven years.  That’s just one division that would have to pay as it goes if this Great Recession never ends.  We have time before twenty-seven years from now to reassess the solvency of PERA.  Why rush now, when we can reevaluate in a couple years?  In fact, since the PERA board has come up with the projections that are being used to support SB 001, the PERA fund has recovered roughly $4 billion.  Finally, I think SB 001 goes too far demanding that PERA have no unfounded liability in 30 years.  A target date of 50 or 60 years would be less onerous and more fair.

Retirees’ unfair burden:

Under SB 001, retirees bare the brunt of the cost savings measures.  The bill eliminates the annual 3.5% benefit increase to our retirees.  These are the Coloradans who typically can’t return to work.  A vast majority of the cost saving measures for PERA come from the cut to the retiree benefit.  Retirees tend to be older and tend to have some of the smaller payouts from the retirement fund.  I do not believe that retirees should have to bare the brunt of the burden, especially if they’re living on a fixed income. I am committed to making sure PERA remains healthy for the long run so current, past and future public employees can continue to count on it when they retire.  However, at the end of the day, I could not support a plan to balance PERA on the back of our seniors without being certain that a fix is eminently needed.