DENVER – Efforts to reform Colorado’s pension program, the Public Employees’ Retirement Association (PERA), will head to conference committee so Republicans and Democrats can try and hash out vast differences between measures that have now passed the House and Senate.
The House passed Senate Bill 200 Tuesday in a 38-23 vote on its third reading, with four lawmakers excused. Three Republicans were granted 21C waivers for conflicts of interest.
“It is at best a Band-Aid,” said Rep. Kevin Van Winkle, R-Highlands Ranch, ahead of his vote against the measure. “Members, when the patient is bleeding out, it just won’t due.”
While some other Republicans agreed, saying the bill benefits retirees but not taxpayers, House Majority Leader KC Becker said it was the General Assembly’s responsibility to pass the measure.
“We have the ultimate management responsibility for PERA,” Becker said. “I would encourage the body to carry out our legislative responsibility.”
PERA is underfunded by between $32 and $50 billion, depending on the estimates, and public employees have been pushing for reforms for years. The program was one of the things Colorado teachers said needed to be changed as thousands of them rallied at the Capitol last week, calling for better pay and school funding as well.
Conferees will have to shore up vast differences between the House and Senate-passed measures. The Senate passed a measure that would shift costs to pay down the pension to public employees, while the House wants $225 million from the state to be pledged to paying down its debt.
The Senate’s version also calls for a defined contribution plan, which the House eliminated when it amended the bill, saying the Senate GOP’s plan carried a higher risk.
The Senate had also raised the minimum retirement age to 65 from 58, but the House-passed version makes the retirement age 60. There are also differences in each bill as to the formula used to calculate benefits and the amount employees are required to contribute.
Last fall, the S&P threatened to lower the state’s credit rating to negative because of the PERA liabilities, which has led to further hand-wringing.
On Tuesday, The Associated Press reported that Colorado’s teacher salary increases haven’t kept up with the pace of inflation, leaving them with less buying power. And per the report, school districts are having to pay more to try and reduce the pension’s liability, thus tightening education budgets even further. The worry is that without extra funding, the liability will continue to grow and districts’ education funding will continue to shrink.
PERA itself estimated that $3 of every $20 spent per teacher goes to their retirement, according to the AP. And public employees don’t receive Social Security benefits in Colorado, shrinking their pool of possible retirement money even further.
The lawmakers hope to be able to pay off PERA's liabilities in 30 years under their plans, but there remains much work to be done to come to a solution accepted by both parties. Gov. Hickenlooper, a Democrat, said earlier this session he was OK with higher contribution rates for employees – something contained in the Senate version but not the House’s version.
Approximately 585,000 Coloradans are either paying into or taking benefits from the pension program.