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Member, Beacon International Group, Ltd.
DENVER—The Colorado State Senate has passed legislation to shore up the state's Public Employee Retirement Assn., which has unfunded liabilities of nearly $30 billion.
Senate Bill 1, which passed by a 25-10 vote Monday, now goes to the Colorado House for consideration.
Among other things, the legislation would raise the retirement age for all but school district employees from 55 to 60 for new hires after Jan. 1, 2011, and require employees to complete at least 30 years of service instead of 25 before they become eligible for retirement benefits.
The new retirement age for school district employees would be raised to 58 from 50 or 55 for new hires after Jan. 1, 2017, if they have completed at least 30 years of service.
All PERA members, however, would continue to be permitted to retire at the previous lower retirement ages but would receive reduced benefits.
The bill also would increase contributions from school district employers by 1.5% of payroll and contributions from school district employees by 2.5% of salary; all other state employers who are PERA members would pay 2% additional of payroll, while their employees would pay an additional 2% of salary.
The bill also reduces cost-of-living increases from 3.5% currently to 2% in 2011, with no increase paid in 2010.
Established in 1931, PERA is the 23rd-largest public pension plan in the United States, providing retirement and other benefits to nearly 450,000 school district, state government employees, state troopers, park rangers and retirees.
A report to the Legislative Audit Committee last July found PERA’s assets fell from $41.4 billion in December 2007 to $29.5 billion in July 2009 because of the economic crisis and stock market downturn. The report also noted that PERA faces $27.5 billion in unfunded liabilities.
The Denver-based PERA Board of Trustees supports the measure.