The plan to save Colorado’s PERA pension fund is sound, but retirees must shoulder more.

Colorado’s roughly $44 billion pension fund for state employees is in trouble, but the trustees for the Public Employees’ Retirement Association have adopted an aggressive plan meant to ensure the fiscal stability of the retirement program for more than half-a-million beneficiaries.

The plan, adopted by the PERA board last week, still needs the approval of Colorado lawmakers and the governor. A heavy lift, no doubt, but the proposal is a good starting point that lawmakers would be wise to consider.

PERA provides retirement benefits to Colorado’s former public teachers, state government employees including troopers, judicial branch employees and some local government employees. Each fund is kept separate and has its own financial outlook. It’s the school division that’s in the worst shape.

The proposed reforms would help take the school division from its current dire projection of being less than 20 percent funded in 2047 to being 100 percent funded in the same 30-year span. The fund now is just below 60 percent funded, meaning it has a multibillion-dollar unfunded liability.

Across all of the plans PERA carries an unfunded liability of $32.2 billion, assuming an optimistic average rate of investment return of 7.25 percent.

Filling that gap won’t be pleasant for anyone, but PERA Executive Director Greg Smith makes a compelling argument for inflicting the pain now, rather than later, so the hybrid defined benefit plan becomes more secure.

The reform plan would make the least secure division fully funded in 30 years, paying off the liability a little at a time using a cut in benefits for future retirees, a cut in cost of living payments for current retirees, and increases in what both employer and employees must pay in.

It’s a shared sacrifice plan similar to the guiding principle behind 2010’s Senate Bill 1 reforms after PERA was cut deep by a more than 25 percent investment loss during the 2008 crash.

And while the new proposal is a good start, we hope the finished product does more to shield taxpayers and current employees from the brunt of these reforms.

Under PERA’S proposed plan, school districts would pay another 2 percent on their employees’ salaries. That might not sound like an extreme increase, until you consider that schools are already paying 20.15 percent of their employees’ salaries to PERA.

Denver Post reporter Brian Eason reported that increase would cost school districts across the state an extra $86 million a year, on top of the millions school districts already pay to PERA.

The alternative is asking current retirees to take even more of a reduction in their guaranteed cost of living adjustment. Under SB 1, retirees saw their annual increase drop from a guaranteed 3.5 percent to 2 percent, with the ability for it to be adjusted down if the market performed particularly poorly. Because the annual increase is compounding, the drop in cost of living adjustments saved PERA billions.

The board’s plan calls for it to drop to 1.5 percent, and for the annual increase to be suspended entirely for two years.

When the financial outlook of a company is bad, raises are the first thing to go. And while it’ll hurt retirees to drop their raises further to 1 percent, or to suffer a longer timeout, we would favor such a move so schools can at least offer current employees a livable wage in addition to their sound retirement.

Moving forward with a plan will be a challenge, and both sides must be willing to negotiate. But we hope everyone can begin with the same goal and premise: the entire state will benefit from a sound pension system.