On December 20th of last year, the South Metro Denver Chamber of Commerce hosted a forum on the future of Colorado’s deeply troubled public pensions, the Public Employees Retirement Association, or PERA.

PERA’s been in trouble for a while, but it only noticed how much trouble it was in late in 2016 when it adopted new mortality tables an a slightly less unrealistic estimate of its long-term rate of return.  Since then, it’s been frantically trying to salvage the current defined benefit plan.  PERA has a legislative proposal to tighten up COLAs, slightly increase the retirement age, increase contributions, and tighten up some loopholes in the benefit calculation formula.  Governor Hickenlooper has released a plan of his own, similar to PERA’s with a few tweaks.

Independence Institute and I think the long-term solution needs to be more sweeping – a cutoff of the traditional pension plan for new members, and even providing the option for existing members to transfer into a new, 401(k)-style defined contribution plan.  This won’t get rid of the massive, $80 billion unfunded liability, but it will keep it from getting any worse, and it will take the investment risk off the shoulders of the rest of the state and put it where it belongs, on the shoulders of the employees themselves.

The panel featured PERA’s interim Executive Direction Ron Baker, Amy Slothower representing the pro-reform Secure Futures Colorado, and Lynnea Hansen of the pro-PERA Secure PERA lobbying group, and me.  It was moderated by State Senator Jack Tate (R-Arapahoe).

Here’s the audio from the event:

As you can see, things got most heated around the discussion of the composition and responsibilities of PERA’s Board of Trustees.  Ron claimed the PERA’s Board was responsible for managing the money and administering the plan.  That’s true, but as I point out, it’s far too modest.  PERA’s Board also lobbies the legislature, posing as a disinterested unbiased source of information, but in fact opposing almost all interim reform proposals, including some that are now part of its proposed slate of reforms.