The Colorado Pension Project (CPP) recently posted a column regarding PERA from TeacherPensions.org and Bellwether Education Partners, national organizations headquartered in Boston, MA. Prior to its posting, Colorado PERA had the opportunity to review the material and subsequently raised concerns with CPP about inconsistencies and mischaracterizations contained within the piece. Unfortunately, CPP went ahead and posted their version without revising their statements.
Colorado’s hybrid defined benefit plan and optional defined contribution plans provide Colorado’s teachers and public workforce with portability and the option to change and advance in their careers either in the public or private sector. Members who leave their retirement savings with PERA accrue benefits with interest and an employer match until they are eligible for retirement. At that time, they can receive a guaranteed monthly income for the rest of their life – without fear they will lose money due to stock market drops or that their savings will run out. Additionally, if life events intervene, these workers have the option to cash out or roll over their savings into other qualified savings plans.
The State of Colorado has commissioned an independent actuarial firm, retained by the State Auditor’s Office, to conduct studies that will compare the costs and benefits of the different retirement savings options with those provided by PERA’s hybrid defined benefit savings plan. The PERA Board supports this process which will make comparisons of alternative plan designs considering a variety of career patterns. To the extent these studies identify employees, employers or career patterns that are not well served by the existing PERA hybrid DB system, policy makers will be well positioned to have an informed discussion of alternatives and the cost of those alternatives.
The goal of the General Assembly’s reforms enacted in 2010 was for PERA to achieve fully funded status – thus ensuring retirement security – with sensitivity to the equitable distribution of costs and burdens associated with the reforms. The “potential solutions for Colorado” outlined in the CPP white paper come with significant increased costs while not appearing to materially enhance retirement security nor meaningfully improve Colorado’s ability to attract and retain a talented public workforce.
Retirement savings and security is an important conversation we should be having, and Colorado PERA is proud to be a resource and voice for how our unique plan design serves the teachers and public employees of Colorado. Colorado PERA wants to ensure our members, policymakers, community leaders and stakeholders have correct information when discussing this important topic.