The $44 billion Colorado Public Employees’ Retirement Association (PERA) will conduct a community meeting in Grand Junction on Monday to discuss a state pension reform package approved in September.
The package will cut the annual cost-of-living-adjustments (COLA) of PERA retirees hired before 2007 from 2% to 1.5%—a cap for those hired after 2007. Employee contributions will also increase from 8% to 11% of their pretax salary to the pension fund in 2020. Workers hired after 2020 would contribute 10%. The retirement age will also be raised from 60 to 65.
In addition, the proposal will also raise costs for taxpayers 2% in 2020. According to the Denver Post, taxpayers currently contribute 20.15% to the pension.
In March, the PERA Board of Trustees lowered the actuarial assumption to 7.25%. The pension is currently 58.1% funded. According to the Denver Post, it would take nearly 80 years to pay off the pension’s $32 billion unfunded liability.
If the Colorado legislature adopts the reforms, the PERA would be on track to become 100% funded within 30 years.
Should the law fail to pass, PERA would not face insolvency, however, another US economic recession could bring the fund down to that level.
Tags: Colorado PERA, Pension, Pension Reform