Good news for PERA
In a state government starkly divided along party lines on so many issues, it’s refreshing to see that political leaders can reach agreement rapidly on some critical issues.
This week, Gov. Bill Ritter signed Senate Bill 1, which makes significant reforms — and cuts — in Colorado’s Public Employees Retirement Association pension system.
SB 1 was a bipartisan effort from the start, with Democratic Senate President Brandon Shaffer joining with Republican Senate Minority Leader Josh Penry to draft and introduce the bill. The foundation for the legislation was laid last year through recommendations put together by PERA’s bipartisan board of directors. The bill moved quickly through the Senate and House before reaching the governor’s desk.
Even though the changes are critical for keeping PERA solvent, they are tough pills to swallow for many PERA retirees and for state and local government workers who will retire in the future.
To begin with, the bill eliminates what has become a traditional 3.5 percent cost of living increase PERA retirees have received. They’ll get no increase this year, and future increases will be limited to no more than 2 percent.
One reason for the haste on the bill was to get it on the books before next month, when the PERA board must authorize its next cost of living increase for retirees’ pensions.
In addition to the changes in the cost of living mandates, the retirement age for future PERA pensioners will rise from 55 to 60. And both they and their government employers will have to increase contributions to the PERA trust fund.
The changes have real economic consequences for PERA retirees, those still working and the taxpayer-funded governments that employ them. But the consequences of doing nothing would have been far worse. State officials have said that without such changes, PERA would be broke in 20 years.
We applaud Penry and Shaffer for leading the charge on this issue, and all of the others who worked to get the changes adopted rapidly.