Treasurer to retirees: Show me the money

Official skeptical of cash forecasts

By Gary Harmon
Friday, July 15, 2011

The Colorado Public Employees Retirement Association has until the end of summer to provide Colorado Treasurer Walker Stapleton with background information on its financial projections, Stapleton told Republicans in Grand Junction on Friday.

Stapleton, a Republican who last year unseated Democrat Cary Kennedy, told about 60 Republicans at Two Rivers Convention Center that he questions the association’s predictions of strength in the future, which are predicated on an average 8 percent annual return.

Legislative fixes approved last year didn’t fix the association’s long-term position, Stapleton said, calling its assumptions “completely and wholly unsustainable.”

PERA last month bragged it netted an average 14 percent return on its investments and ended 2010 with $38.7 billion in defined benefit assets.

“We were pleased with the results in 2010,” said Meredith Williams, Colorado PERA’s executive director. “PERA remains committed to managing a healthy pension fund that will meet the financial needs of Colorado’s public employees for generations to come.”

Stapleton, however, said such outcomes are unlikely to continue year after year, and he wants to look at figures that underlie the actuarial projections.

PERA, however, has been less than forthcoming with that information, even though he is the only member of state government who sits on the PERA board. Stapleton said he has a right to the information “and the attorney general agrees with me,” he said, referring to fellow Republican John Suthers.

Suthers’ spokesman, Mike Saccone, said Suthers agrees Stapleton “cannot meet his fiduciary obligations without access, and he is entitled to this information.”

A rate of return on investment of 3 to 4 percent is more reasonable over the long term than the 8 percent built into the association’s assumptions, Stapleton said.

Any expectation of more than 4 percent over the long term amounts to falling back on the state’s taxpayers to fund the retirement system for 500,000 people, Stapleton said.

“The question is: Should the state of Colorado be in the business of insuring stock-market risk?” he said.