DENVER -- Colorado is moving to become the first state to cut retiree benefits to prevent its pension system from going broke.

The state Senate voted 25-10 on Monday to back a proposal to overhaul the Public Employees Retirement Association. It now moves to the House.

Backers say it's needed to prevent the system from going broke in 20 years.

Under the plan, retirees would get no cost of living increase this year, which would save PERA $80 million. Next year, retirees would get the lesser of 2 percent or inflation. Future annual increases would be capped at 2 percent a year, down from 3.5 percent now.

The retirement age for new workers would rise from 55 to 60, and contributions would increase for both employers and employees.

Senate President Brandon Shaffer, D-Longmont, has said if lawmakers don't do something now, PERA will be insolvent.

But retirees claim cuts in the Cost of Living Allowance will create hardship and cost some retirees upward of $500,000.

Dan Daly, of the Colorado Coalition for Retirement Security, told 7NEWS last month 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, they’ll have to pay more in overall salaries," Daly said.

Nearly 450,000 Coloradans rely on PERA for their retirement. They include teachers, judges, state troopers and other public employees.