In light of the PERA Board adopting changes in economic and demographic assumptions, the PERA Board of Trustees received updated information from their actuaries regarding the length of time it will take to become fully funded, and the impact of various options to reduce the risk to PERA members and the system. It is important to note that all major Divisions are stable, solvent, and able to pay all benefits in perpetuity, but the changing conditions have resulted in amortization periods that exceed the Board’s policy of 30 years.
Any benefit and contribution changes to Colorado PERA require a majority vote in both houses of the General Assembly and the Governor’s signature. While the Board has not made any decisions on recommendations for changes, the Board believes it is prudent to start looking at what options exist to shorten the amount of time it takes to become fully funded.
The PERA Board takes very seriously its fiduciary responsibility to all members and retirees, and will continue to provide factual information and data to inform conversations and decision-making. PERA will be leading stakeholders through a process to discuss its funded status and explore options related to contribution and benefit changes. This process will take place over the next year so there will be plenty of opportunities to get involved. The following presentation was delivered to the Board on January 20 and explores three scenario categories, each with multiple variables, and the expected change to the current amortization period if adopted. Categories include:
- Contribution changes
- Plan design
- Economic experience
The presentation may be viewed here.
Review The Impact of PERA’s Assumption Changes fact sheet.
We look forward to engaging all stakeholders in the coming year and welcome your comments below.