DENVER -- No one's hoping harder for a big, sustained Wall Street rally than the administrators of the Colorado Public Employees Retirement Association or PERA.

With $12 billion in lost asset value since January of this year, Colorado's largest retirement fund could face changes. But the executive director said cuts to retiree benefits are not the first priority.

"Not likely that's going to happen today," said Meredith Williams, PERA's executive director. "And certainly cutting benefits to retirees, while it may sound attractive to some, there are serious legal implications that probably prevent that approach from being followed."

Williams said a legal opinion issued by then-Attorney General Ken Salazar on Nov. 18, 2004 found retiree benefit cuts are not legal, even for the state legislature.

Williams and his staff will look at any and all options to maintain the solvency of a plan that is the primary retirement vehicle for 429,000 people, many of them teachers, local government and state government employees.

"There's definitely a concern as to, 'Will my PERA retirement be there?'" said Judith Zewe, human resources director for Metro State.

She is one of 250 people tied into PERA and she also has to answer phone calls from employees considering delayed retirement, as a result of the huge losses.

"It's a scary thing to be out there and we're hoping some things will happen to stabilize it," Zewe said.

Metro State is not looking at staff cuts. Instead, it is eyeing leaving vacancies unfilled as a way to weather this economic storm.

With 85 percent of PERA funding coming from stock market returns, any 300-point swing to the DOW industrials can mean a $300 million gain or loss for PERA.

Williams said a state government bailout is unlikely both because the state legislature has other priorities and a limited, $19.2 billion projected budget for 2009. But he is emphatic the program is not going under.

"We still have assets that measure in the tens of billions of dollars. We can pay benefits for decades, " Williams said.

The average PERA retiree benefit is $2,658 per month, before taxes.

Discussions about a possible merger with Denver Public Schools appear to be at a standstill. Williams said that merger is "unlikely."