FoP Updates
New Threats to Funding: Prop 101, Amendments 60 & 61
The FOP Board voted to oppose Proposition 101 and Constitutional Amendments 60 and 61 which drastically cut funding totally more than $2 billion. Read the FOP statement.
2010 General Assembly Session Concludes
The 2010 legislative session ended with a major PERA bill passing and several other bills being defeated.
SB 001: Gov. Ritter signed a major PERA reform bill into law on Feb. 23, 2010. The bill made many changes to PERA including increasing contributions and altering benefits; it was a response to a long term solution for PERA’s sustainability when the fund was faced with a huge underfunding. (Main Sponsors: Sen. Brandon Shaffer, D-Longmont; Sen. Josh Penry, R-Grand Junction, and Rep. Andy Kerr, D-Jefferson County). See PERA Statement below.
HB 1207: Defeated March 2, 2010. This bill would have replaced PERA's defined benefit plan with a defined contribution (DC) plan for all new employees, would have allowed current members to transfer to the DC plan, would not have provided for any survivor benefits for deceased workers or disability retirement coverage for DC participants, would have cut PERA funding, would have raised member contributions to 10%, and would have made numerous other changes in the DB plan. (Sponsor: Rep. Kevin Lambert, R-Longmont) CU professor Dr. Barry Paulson testified in favor of this bill. Voting in favor of the bill were: Rep. B. J Nikkel (R-#49 Larimer-Weld Counties), Rep. Mark Waller (R-#15 El Paso County), Rep. Brian DelGrosso (R-#51 Loveland), and Rep. Carole Murray (R-#45 Castle Rock).
HB 1153: Defeated on Feb. 11. This bill would have changed the composition of the PERA Board of Trustees by having the Governor appoint 8 members and only having six elected trustees from the membership versus the current 11.
Lawsuit filed against PERA for pension reform
A lawsuit was filed in April over SB1 which reduces pensions benefits for PERA members and retirees. The suit claims that SB1 is unconstitutional because of the “retirees’ contractual rights” to receive pension benefits at the levels promised them when they became eligible to retire or when they actually retired. The PERA Board of Trustees filed a motion to dismiss six of the eight complaints on May 10, 2010.
PERA Statement Regarding SB 1
The Colorado House of Representatives approved Senate Bill 1 today, sending to the Governor's desk a legislative package designed to put Colorado PERA back on track to being fully funded. As State Senators acknowledged before, Representatives recognized the difficult sacrifices that Senate Bill 1 requires from all PERA participants - members, retirees, and public employers. But they also stressed the importance of the legislation that had significant bipartisan support. Doing nothing would have left PERA to run out of money sometime before many of today's members even retire.
Senate Bill 1 will not cut anyone's retirement benefits - only cap future increases - but PERA is sensitive to the concerns of retirees and members who will be impacted by the legislation. Since conversations about potential legislation began last fall, the Board has been clear that any legislation would need to spread the responsibility for benefit changes broadly so that no single group carries a disproportionate burden. We expect the Governor to sign the legislation in the next several days and we will continue to keep you informed about future changes and their impacts on members and retirees.
2010 COLA for Military Retirees, Social Security Beneficiaries
There was no COLA increase for military retirees or Social Security beneficiaries in 2010.
Colorado Coalition
The Colorado Coalition made the following statement regarding the PERA legislative proposal. Friends of PERA is one of the groups in the Coalition. See www.securePERA.org.
NIRS report reveals role of pensions in reducing poverty
Excerpt: Defined benefit pension income plays a critical role in reducing the risk of poverty and hardship for older Americans. Poverty rates among older households lacking pension income are about six times greater than those with such income.
The study finds that pensions reduce – and in some cases eliminate – the greater risk of poverty and public assistance dependence that women and minority populations otherwise would face, The Pension Factor reveals.
Read the full report.Major Issues in 2009 State Pensions and Retirement Legislation
August 11, 2009 - Ronald Snell
The principal theme in pension legislation in 2009 was the need to make future pension costs manageable in the light of states' straitened fiscal circumstances and the enormous losses most retirement trust funds have experienced. Reductions in various forms appeared in a number of states. Some states enacted early retirement incentives with the goals of reducing the size of the state workforce. Some states protected employees who will be subject to mandatory furlough days (required days off without pay) from loss of retirement benefits for those days.
Read the full report.PERA in 2008
The net investment loss in 2008 was $10.5 billion and about $2.7 billion were paid out in benefits. Employers and members contributed about $1.5 billion. The rate of return was a negative 26% compared to a benchmark of -27.7%. more…