Update (May 11, 2022): This bill has passed. Click here for the latest
A bill that would make up the state’s missed 2020 payment of $225 million to PERA has begun making its way through the state legislature.
The Pension Review Commission, a legislative interim committee that is charged to study and develop proposed legislation concerning pension plans in the state, made a recommendation for this bill to be introduced in the 2022 legislative session. It was introduced early in the session, but did not move forward until the state budget had been finalized.
The House Finance Committee on Monday voted 9-1 to move the bill, HB22-1029, forward to the House Appropriations Committee for further consideration.
Lawmakers enacted legislation to forego the $225 million payment to PERA in 2020 during the early stages of the COVID-19 pandemic, when the General Assembly cut billions of dollars from the state budget. The state automatically resumed payments in 2021 — additional legislation would be required for the state to forego any future payments — but did not make up 2020’s payment.
HB22-1029 calls for the state to make a payment totaling $303.57 million — $225 million plus estimated investment gains, had the money been invested — on July 1, 2022.
The bill originally called for the payment to come from the state’s general fund until the actual funding source had been identified. The bill’s sponsors added an amendment to instead use money from a cash fund the state set up in 2021 solely for future payments to PERA. That fund currently has a balance of $380 million, which legislative staff has recommended distributing to PERA sooner rather than later.
The House Appropriations Committee is expected to consider HB22-1029 later this week and if approved, it will head to the House floor for discussion and vote before moving to the Senate. PERA On The Issues will continue to monitor legislative activity on this bill.
The $225 million direct distribution to PERA is part of a package of reforms enacted under Senate Bill 200 in 2018 and is meant to put PERA on a path to full funding. Also included in Senate Bill 200 was the Automatic Adjustment Provision, which will trigger increases in employee and employer contributions to PERA and reductions to annual increases for benefit recipients in July 2022.
Bill sponsor Rep. Shannon Bird referenced Senate Bill 200 and the state’s commitment to PERA when urging her fellow committee members to vote in favor of the bill.
“Our economy has rebounded and economic activity in Colorado is now exceeding even pre-pandemic levels,” Bird said. “In light of our greatly improved financial position, we now have the opportunity to make things right and hold ourselves accountable for our responsibilities under Senate Bill 200. Because when we suspended our payment in 2020, PERA lost $225 million and it also lost all investment returns those dollars would have brought in.”
The legislature has until May 11 to finish its work on any pending legislation and adjourn the current session.
For the latest on this and other PERA-related bills, click here.
Automatic adjustment provisionA provision of Colorado law that automatically changes PERA contributions (from employers, employees, and the state) and annual benefit increases based on PERA’s funding progress.