Faced with a looming $30 billion shortfall in the states retirement plan for public employees, Colorado lawmakers gave initial approval, Tuesday night, to a plan to reform PERA.The Senate Finance Committee voted 5-2 to require members of the Public Employees Retirement Association to increase their contributions by 2.5 percent.Senate Bill 1 also requires employers to up their contribution 1.5 percent, and cuts the Cost of Living Adjustment to 2 percent. Its currently 3.5 percent.If we dont do something now, PERA will be insolvent, said Senate President Brandon Shaffer, D-Longmont.Dozens of retirees packed the Old Supreme Court Chambers to air their frustrations with PERAs problems and the proposed solutions.Many said they understand the need to make changes, but others spoke out against those changes and raised the specter of a legal challenge.I am adamantly opposed to any reduction in the contracted 3.5 percent Cost of Living Adjustment for current and future retirees, said retired teacher Gary R. Justus. My objection to it is both legal and actuarial.Justus said that over time, the cut in the Cost of Living Allowance could cost some retirees upward of $500,000.Senate Minority Leader Josh Penry, R-Fruita, acknowledged that the changes will create some hardship, but he said its the same kind of hardship faced by residents in the private sector.When asked how PERA ended up with a $30 billion shortfall, Penry replied, Two things, the benefit structure is just far too generous, and the stock market plunged creating economic chaos."Those two things have created what amounts to a ticking time bomb, Penry said. It makes our annual budget issues look like small potatoes.Shaffer said, Nearly 450,000 Coloradans rely on PERA for their retirement and we cannot allow it to fail.But Sen. Keith King, R-Colorado Springs, said the current proposal is not a long term solution.We should switch from a defined benefit plan to a defined contribution plan where each individual can direct their own contributions, King said.Senate Bill 1 would also increase the retirement age from 55 to 58.Dan Daly, of the Colorado Coalition for Retirement Security, told 7NEWS that the retirement age increase may save PERA money, but will end up costing school districts more.If districts are required to keep higher paid teachers longer, theyll have to pay more in overall salaries," Daly said.The original proposal, amended in committee, would have increased the retirement age to 60.The bill now moves on to the Senate Appropriations Committee where it will be heard Friday morning, Jan. 29.