Retirement insights from a Colorado PERA perspective

Legislation & Governance

Colorado’s State Legislature Goes to Work: What to Expect in 2020

healthcare legislation

At 10 a.m. on January 8, the sudden bang of a gavel striking its sounding block will pierce the morning air in Colorado’s State Capitol. This will happen twice—once in the green chambers of the House of Representatives and once in the Senate’s red chambers. As the lawmakers bring their conversations to a close and come to order, Colorado’s 2020 legislative session will be underway.

The gavel might as well be a checkered flag. Until early May, Colorado’s 100 lawmakers will discuss, debate, and eventually decide upon policies that will shape the future. Colorado has grown in size and complexity in nearly every measurable way since those Frontier days of 1876. But legislators today, as then, have only 120 days to keep state law in step with changes that occur on all 365. The result is a jam-packed, fast-paced schedule, filled with hundreds of bills that cover an array of subjects. On the most controversial topics, debate can last into the early morning.

Michael Steppat is Colorado PERA’s Public & Government Affairs Manager. He is tasked with navigating and deciphering the subtleties of the legislative process. He tracks legislation, maintains relationships with legislators, oversees lobbying, and more.

Michael Steppat, Colorado PERA’s Public & Government Affairs Manager

Below, he shares more about his
role at PERA, the ways in which PERA governance is unique, issues related to
oversight and transparency, and what to expect in the upcoming legislative
session.

What’s your role at PERA?

I represent PERA at the Capitol. I monitor and report on legislative activity, builds and maintains relationships with legislators and other stakeholders, and oversee lobbying efforts. I also serve as the liaison for legislative committee staff.

Can you describe the similarities and differences between PERA and
state agencies?

PERA is probably often viewed by the average citizen as a state agency. But it’s not. State law actually says “The association is an instrumentality of the state.”

I think one of the key differences is governance. We report to a Board of Trustees. State departments and agencies don’t. They have heads appointed by the governor. Also, PERA’s budget is not set by the legislature.

Despite those differences, there
are also some similarities. For example, PERA still reports to the General
Assembly through multiple oversight committees.

So PERA has a Board of Trustees, but state legislators also govern
PERA. Can you explain the different responsibilities each group has?

The Board, which includes trustees elected directly by our members as well as trustees appointed by the governor, oversees the investment program and administration of benefits. They do not set contribution rates or benefit levels—only the legislature can. The Board appoints PERA’s Executive Director to implement its policies. PERA is also independently audited by a third-party through the Office of the State Auditor every year.

A few different committees at the State Capitol deal with PERA
matters. What do these committees do, and why are there more than one?

Each committee has a different focus.

The Legislative Audit Committee goes through PERA’s annual financial and compliance audit. They ensure the financial statements are accurate.

The Joint Budget Committee (JBC) reviews budgetary and personnel matters. PERA’s annual report to the Joint Finance Committee is similar to the JBC.

The Joint Finance Committee reviews certain departments, including PERA, annually pursuant to the SMART Government Act. One of the intended goals is to get committees of reference more involved in the state budgeting process.

The Pension Review Commission has the responsibility to study and develop proposed legislation relating to FPPA and PERA, covering a number of subjects.

The Pension Review Subcommittee focuses on the financial health of the organization. Unlike the other committees, this committee includes members of the public, based on subject matter expertise.

Does PERA lobby elected officials? What does lobbying look like?

PERA does contract with lobbyists.

Lobbying is essentially advocacy of a point of view, however most don’t realize ninety percent of communication with lawmakers is education. Legislators come from varying walks of life. There are more than five hundred bills introduced every session on a variety of topics. Lobbyists are experts in their specific areas and help legislators understand the nuances of a subject.

It’s important that PERA is represented and can provide education to legislators, especially given legislator turnover at the State Capitol because of term limits.

Does PERA take positions on bills?

The Board may take positions on bills that directly impact PERA. Even if the Trustees don’t take a position, we may need to testify or provide information. We must ensure that the facts are out there so lawmakers can make informed decisions.

If PERA members want to know more about the legislative process or
become more involved, where would they start?

PERA On The Issues is a good place to start. The General Assembly website is a great tool. The Colorado Channel on YouTube has live and archived video of the House and Senate floor. You can listen to committee meetings, view calendars, and review the status of a bill online. You can even sign up to testify at committee meetings. Colorado is a pretty transparent state.

Most importantly, legislators need to hear from constituents in their districts. That often ends up being influential.

Do you anticipate seeing any proposed legislation related to PERA
this year?

We expect to see something dealing with Working After Retirement rules as well as changes to the types of jobs that are eligible to be on the Safety Officer table, which currently includes positions like State Troopers. Divestment issues are a possibility, too. PERA will also deliver a calculation concerning the funding of the Denver Public Schools trust fund.

It’s important to remember that PERA,
or any other stakeholders, don’t introduce bills. Legislation is solely the
responsibility of legislators.

Comments

  1. Paul says:

    Where can we find the names and profiles of the lobbyists PERA is contracting with during this legislative session?

  2. Barry Thorpe says:

    The economy is more than recovered from the first cutback ever in benefits in 2010. Subsequent reductions in contractual benefits have continued now for 10 years. The current benefit increase is not sufficient considering the total absence of any COLA for 2 years. Therefore the 1.25 increase this summer can only be quantified as spread over 3 years averages out to 0.4 percent . Who is going to introduce some legislation to reverse this massive reduction in the benefits of retirees? A pension program that takes away earned benefits so it can call itself “fully funded”, is self contradictory. We were shut out of Social Security, and further strangled by the WEP, for our earned SS benefits from summer work. Who is advocating for the duped retiree?

    • Jann Todd says:

      We were suppose to get a 3% raise every year. PERA was underfunded so we stopped getting our raises. We figured it out and we will lose over $160,000 because of no raises. At a meeting about the 1.25% raises a man was wearing fancy expensive shoes costing at least $200 telling us we all had to help out. Seems like he’s not hurting like the rest of us. SS said we don’t get the full amount because we supposedly make so much from PERA that we don’t need our SS. Really! If I wasn’t married and my husband had an income I could be on food stamps, welfare and Medicaid due to the huge paycheck I get on my PERA retirement. Shows our PERA doesn’t make us rich and we need our SS.

      • Richard Yale Shine says:

        Cost of all goods and services are going up but my pension is now static. I wouldn’t have retired if I would have known that our Cola would basically vanish!

  3. Karen says:

    I’ve only been here a minute and found Mr. Thorpe unhappy about almost everything PERA has done. I’ve been retired from a rural school district for almost 20 years now and make more in my pension than I ever did teaching! I also am fully vested in social security from my summer work, but have it greatly reduced. The pie is only so big so until they start making folks pay into social security at EVERY level, instead of capping it at a ridiculously low level at this time, SS will continue to struggle. There are no easy answers and I appreciate all the hard work PERA staffers and lobbyists do for us.

    I also think Michael did an excellent job explaining things in the article above.

    • Jann Todd says:

      SS struggles because our politicians put it into the general fund years ago.

    • Paul says:

      In fairness to Mr. Thorpe, the issues and frustrations he raises pertaining to the decline in annual increases for retirees is representative of how many recent retirees feel. We will not benefit the same way you did by retiring 20 years ago. Many of us were hired and joined PERA when the annual increase was at the rate or cap of 3.5% per year.
      In your case, Karen, you benefited from annual increases at a much higher rate that reasonably addressed increases in your cost of living during the first 10 or 11 years of your retirement, before the legislature decreased the cap on annual increases in 2010 to 2% and then reduced it to 1.5% in 2018, with an included provision that will reduce it further in future years.
      If you retired from PERA in or about 2000, you were able to receive annual of at least 3% until the 2010 legislation. That is why you currently receive more than you did when you retired from teaching 20 years ago. A teacher retiring in 2019 will not have the same luxury of the increases you benefited from and will be in a very different financial situation 20 years from now than you are in today if the current legislation is not changed to provide a reasonable Cost Of Living Adjustment.
      That is at the core of why people like me, and I presume Mr. Thorpe, push for new legislation that will enable those who retire today to be as content 20 years from now as you find yourself today. I do agree with you that Michael did a nice job in this article of explaining his role and the associated processes.

  4. Jeanne C. Fuchs says:

    I think we tend to forget that, following a relatively short time in which our own contributions partially funded our pensions, the Colorado taxpayer is now providing 100% of our pension. I am grateful to all of them for making a difference in my retirement comfort. I don’t feel entitled to a raise just because an old piece of legislation says that would be a good thing. If the money isn’t there, it isn’t there.
    What continues to irk me year after year is the windfall grab of my Social security, but that isn’t Pera’s fault.

    • Barry Thorpe says:

      The WEP is also an “old piece of legislation”, so based on your perception of the “guaranteed annual increase”, you don’t feel entitled to either. I’m sorry but with all due respect the ABI was in place at the retirement time of many of us. Perhaps it needed to be changed going forward, but NOT taken from those who already earned it as a feature of the pension plan they qualified for.
      You seem rightfully disappointed with the WEP, but just fine with a similarly contrived loss of earned income.

      • Barry Thorpe says:

        The WEP is also an “old piece of legislation”, so based on your perception of the “guaranteed annual increase”, you don’t feel entitled to either. I’m sorry but with all due respect the ABI was in place at the retirement time of many of us. Perhaps it needed to be changed going forward, but NOT taken from those who already earned it as a feature of the pension plan they qualified for.
        You seem rightfully disappointed with the WEP, but just fine with a similarly contrived loss of earned income.

  5. Douglas Morton says:

    Hear hear! It’s time to reverse some of this and figure out how we ban together to eliminate WEP.

  6. Paul says:

    I am not sure if I understand your above statement that says, “I think we tend to forget that, following a relatively short time in which our own contributions partially funded our pensions, the Colorado taxpayer is now providing 100% of our pension.”
    If by that you mean, that once we have received the amount many of us contributed to PERA over 30 years of employment, we are now living off the taxpayers and should be “grateful” for their support, you are making a gross error of oversimplification.
    You are ignoring the fact that the contributions we made over the course of 30 years were investments in a Defined Benefit Program governed by the state constitution as well as existing legislation. We have a legal right to the the defined benefit promised until the day we die. The defined benefit is not the amount we contributed.
    The case law that has evolved and will continue to evolve highlights the legal complexities and obligations with regard to the Annual Increases as distinguished from the Defined Benefit, but to reduce those complexities to a dismissal of our legal right to anything more than the “partial contribution to our pension” is simply wrong and irresponsible.

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