Putting PERA on a path to prosperity

Democrats and Republicans in the Colorado General Assembly are elected to solve problems and to make our state a better place to live, thrive and yes — retire.

Our state is no stranger to drought and the Public Employees’ Retirement Association pension system was drying up the future of our retirees and public servants. This session legislators were faced with the colossal challenge of fixing this broken retirement system on behalf of our constituents.

Colorado’s teachers, troopers, snowplow drivers and other public servants have and continue to pay a portion of their salary into PERA with the guarantee that they will receive a set amount of income in their retirement for the rest of their lives.

Colorado’s PERA beneficiaries deserve to know that their retirement system is going to be there for them. That’s why I’m glad Gov. John Hickenlooper provided that assurance by signing Senate Bill 200 — the pension reform bill — into law this past week.

Before this session began, many doubted that our split legislature could achieve much-needed pension reform. But we put partisanship aside and passed this important piece of legislation because it was the right thing to do on behalf of hardworking Coloradans and their families.

The stakes couldn’t have been higher. Despite an effort in 2010 to restore PERA to financial health, by 2018 PERA faced a $32 billion unfunded liability, putting its long-term financial stability — and that of its members — in peril.

Coloradans are living longer and drawing more on their pensions. That, along with lowerthan-projected investment returns, meant PERA had a lot more debt than expected.

Colorado’s credit rating and that of school districts hung in the balance. The credit rating agency Standard and Poor’s cautioned of a credit downgrade if no action was taken this year to reform PERA.

Kicking the can down the road was not an option. If we did not act, taxpayers would be on the hook for an additional $2.3 billion in debt this year. A credit rating downgrade could impact our schools’ ability to pass bond measures — a critical funding source for cash-strapped districts from Denver to Durango. It also meant that current and future retirees were looking at a less stable fund.

Colorado’s pension funding troubles were severe; PERA’S ratio of assets to liabilities, had fallen from 61.3 percent in 2010 to 56.1 percent in 2016, putting its long term promise to retirees in doubt. We had to resolve the issue, and promptly.

At the end of the day, all stakeholders ended up with some things they liked and some they didn’t like, but this reform measure will ensure that PERA remains a steady and solvent retirement fund, committing $225 million in ongoing new funding to reduce PERA’S liability and setting it on the path to full funding within 30 years.

When PERA reaches full funding, contributions must be scaled back, allowing the state to make investments in other priorities and — most importantly — putting money back in the pockets of teachers, state troopers and other public servants.

This new law will ensure the long-term solvency of PERA, so that our state can meet its commitment to our active and retired public servants well into the future.

KC Becker is the majority leader of the Colorado House of Representatives from House District 13 which stretches from Boulder to the Wyoming border.