Senate Bill 18-200 ensures PERA is on the path to full funding in 30 years
On March 7, 2018, SB 18-200 was introduced in the Colorado State Senate. The intent of the legislation is to improve PERA’s funded status and lower its overall risk. Sponsors include Sen. Jack Tate (R-Centennial), Sen. Kevin Priola (R-Henderson), Sen. Cheri Jahn (U-Wheat Ridge), House Majority Leader KC Becker (D-Boulder), and Rep. Dan Pabon (D-Denver). SB 18-200 has been assigned to the Senate Finance Committee, and a hearing is expected to be scheduled soon.
The PERA Board held a special meeting on Wednesday, March 7, and directed staff to continue engagement on reform legislation. Bill sponsor Senator Tate had a letter read at the Board meeting thanking the PERA Board for their significant contributions to the development of this legislation. In September 2017, the PERA Board approved a package of recommendations to the General Assembly that would restore the fund’s resilience.
If passed by the Legislature and signed into law by Gov. Hickenlooper, the bill upholds the PERA Board’s goal of bringing all five of PERA’s Trust Funds to 100 percent funding within 30 years. The bill incorporates many of the PERA Board’s recommendations that would impact retirement benefits and contribution levels of all current and future PERA members and retirees. In addition, the legislation includes the Board’s recommended increase in contributions for PERA-affiliated employers. Certain provisions of the legislation would go into effect as soon as this year, while others would be phased-in over the next few years.
The bill includes a set of automatic adjustment provisions that would go into effect to ensure that PERA remains on the path to full funding in 30 years. These provisions would modify employee and employer contributions and the annual increase paid to retirees to offset any deviation from the 30-year timeframe. The bill would also require PERA to report to an interim legislative committee to ensure progress is being made toward full funding. This committee would also have the power to consider and recommend legislation regarding PERA to the full General Assembly.
The legislation would also allow new hires from all divisions the option to choose between the PERA Defined Contribution (DC) plan and PERA’s Hybrid Defined Benefit Plan. Currently, only employees in the State Division have this option.
Below are additional details on how the bill would affect retirees, current members, future members, and employers.
Retirees
The only provisions affecting retirees (who are not working after retirement) are related to the annual increase. For current retirees, there would be a two-year suspension of the annual increase in 2018 and 2019, followed by a reduction in the cap of the annual increase paid each year thereafter to 1.25 percent from the current 2.0 percent.
Current members
The immediate impact for current members would be a phased-in 3 percent contribution increase from the current 8 percent to 11 percent of pay, starting in July 2018.
Like retirees, current members would have a lower cap on the potential annual increase paid. In addition to a reduction in the annual increase, the waiting period would increase to three years from the current one year.
Current members would also see a change to the definition of PERA-includable salary that would include certain pre-tax benefit programs under Sections 125 and 132 of the Internal Revenue Code.
Finally, as currently written, the bill would change the retirement eligibility age for all members who are age 46 or younger as of January 1, 2020, by adding one year to full service retirement eligibility for every four years less than age 46, not to exceed 65 years of age. A similar requirement would apply for reduced service retirement, not to exceed 60 years of age.
In addition to the changes listed above, nonvested members (those with fewer than five years of service credit) would see a change in the length of time used to determine Highest Average Salary (HAS). Currently, HAS is determined by using the three highest years of salary while this proposed legislation would increase the number of years to seven.
New members on or after January 1, 2020
All of the above changes would apply to new members, except for the retirement age eligibility modifications for current members described above. For new hires, eligibility requirements (age and service) for full service retirement benefits would increase to age 65 for most members with a minimum of five years of service and age 55 with 25 years of service for a reduced service retirement (for certain employees, mainly State Troopers, full service retirement benefits will require recipients be age 55).
New hires would earn service credit based on the full-time equivalency of their position.
New hires in all divisions would also be able to choose between the PERA Hybrid Defined Benefit Plan and the PERA DC Plan.
PERA-affiliated employers
For all PERA employers, there would be a phased-in contribution increase of 2 percent of pay beginning July 1, 2018.
Additionally, employers would be required to calculate contributions on PERA-includable salary to include employee participation in certain benefit programs outlined above starting in January 2020.
Finally, for certain Local Government Division employers who choose to disaffiliate from PERA, the discount rate used to determine liabilities will be modified.
To learn more about how the introduced bill compares to the PERA Board’s recommended package from September 2017, please refer to this fact sheet. To stay up-to-date on all PERA-related legislation, please subscribe to the PERA on the Issues newsletter by signing up here.
Defined benefitAlso known as a pension, this is a type of pooled retirement plan in which the plan promises to pay a lifetime benefit to the employee at retirement. The plan manages investments on behalf of members, and the retirement benefit is based on factors such as age at retirement, years of employment and salary history.Defined contributionA type of individual retirement plan in which an employee saves a portion of each paycheck (along with a potential employer match) and invests that money. The employee’s retirement benefit is based on their account balance at retirement. A 401(k) is a type of defined contribution plan.
I am requesting a breakdown of the salaries, benefits and increases of the Copera administrative personnel that manage, track and distribute benefits. Transperancy is needed to affirm the statement that everyone must give up something for this to work.
Dear Mr. Templin,
PERA employees are PERA members and will be subject to all changes to the plan enacted by the Colorado General Assembly. The PERA Board of Trustees has adopted a Total Compensation Philosophy Statement which may be reviewed here: https://www.copera.org/sites/default/files/documents/totalcomp.pdf
The cost to administer the PERA program is disclosed in the Comprehensive Annual Financial Report on page 115. https://www.copera.org/sites/default/files/documents/5-20-16.pdf
An external pension administration firm reviews PERA costs and levels of customer service and has consistently rated PERA as a low-cost, high-service retirement plan. You can read more about that here: https://peraontheissues.com/index.php/2017/10/04/how-does-pera-measure-up/
Since PERA is a great deal, why don’t all Colorado State employees belong to this great benefit program? An example is Denver School of Science and Technology (DSST) who’s employees are paid by State and Local tax dollars from DPS (Denver Public Schools). These State employees are not allowed to participate in PERA. I wonder, how many other State employees are paid with State funds and are not allowed to be members of PERA? Would their contributions reduce the deficit?
Dear Mr. Giddings,
Thank you for your question. When the Denver Public Schools Retirement System was merged into PERA, DSST was specifically carved out in the legislation. Some state employees who work at higher education institutions are also not members of PERA because some higher education employers have specific legislation that allows them to offer a different retirement plan to their employees.
Shame and curses upon you for yet another taking of the vested benefits of current retirees ! A total contractual breach. Will be working overtime to alert any interested young teacher candidates to look elsewhere, to states that don’t breach contracts after a career devoted to teaching. Unspeakable, unacceptable, unforgivable and unjustified by any measure.
Sad governmental malpractice, unstudied and age discriminatory. Shameful to have wasted a 30 year career, only to have met all conditions of retirement, then have the contract unilaterally and retroactively breached.
Dear Mr. Thorpe,
Thank you for sharing your thoughts.
We believe that the PERA retirement plan remains a valuable benefit for those seeking teaching and public service careers in Colorado.
Additionally, the Colorado Supreme Court ruled that changes to the annual increase or COLA are constitutional.
PERA Rep:
I copied what impacts for retirees as it relates to the COLA proposal. Table you can see what impacts what group it shows 2% COLA going to 1.5% if approved for retirees, however the below information you have in one of the paragraphs shows retirees going from 2% to 1.25%. Is this a typo or is the proposed reduction for current retirees to move down to 1.25% COLA?
Retirees
The only provisions affecting retirees (who are not working after retirement) are related to the annual increase. For current retirees, there would be a two-year suspension of the annual increase in 2018 and 2019, followed by a reduction in the cap of the annual increase paid each year thereafter to 1.25 percent from the current 2.0 percent.
Montey,
The PERA Board’s recommendation for the COLA cap is 1.5% and in the introduced legislation (SB 200), the COLA cap is 1.25%. Both the Board and the legislation call for a two-year suspension of the COLA.
As a retired Pera person, I feel like I havebeen,shafted and treated like a second class citizen.
As inflation is heating up (part of the Federal Reserve’s goal of the economy !), the freeze and, more significantly, the reduction of AI to 1.5% will be a major impact on retirees. Thus the specifics of what is meant by the section titled “OTHER PROVISIONS” in the Comparison of PROPOSALS to which you provide a link is all important. That section reads, “Implement an automatic-adjustment provision that adjusts employer and employee contributions as well as the AI to keep PERA on a path to full funding in 30 years.” What specifically are the automatic-adjustment provision and how do they work? What are the provisions, if any by which the AI would be re-established to 2%?
What about the retirees who are still working under PERA and are FORCED into paying 8 % back into PERA but do not get any credit for their contribution. Are we going to treated as retirees who are not working or do we get something for the money you have taken from us for several years? The fact that our increase will be frozen for this year and next year does not seen fair for those who has been paying for years of substitute teaching. I am asking that you respond to my questions.
Dear Mr. Robbins,
PERA retirees who have returned to work for a PERA employer will be subject to the contribution rate increases for members outlined in SB 18-200 if the legislation is enacted as introduced. The working retiree contribution was created in 2010 to offset PERA’s unfunded liabilities.
Our salary increases stopping for 2years and then going to 1.25% means we retirees will not be keeping up with inflation. My mortgage stays the same. My bills for food, clothes don’t. This doesn’t seem right or fair to me and the other retired friends who were teachers. Teaching your kids I think was the most important job in America, don’t you?
Dear Mr. Warner,
The PERA Board made every effort to protect the annual increase and achieve the goal of full funding in 30 years. PERA would be at significant risk if the annual increase was not suspended and reduced.
So why is compensation for administrators as high as it is? So, PERA has been judged to be a low cost program. It also is falling apart and this is the second time I’m being asked to give up something I was promised. I think you could find people willing to drive PERA into the ground for a lot less than current (and former) administrators are receiving. They should be paid for performance.
SB 18-200 is not acceptable for several reasons:
1. Basing employee contributions on gross instead of net. Why include taxes?
2. Employer contributions should be at the same rate as that of the employee.
3. AI should not be suspended and it should be adjusted in accordance with inflation.
4. HAS should be at 5-year average, not 7.
5. Changing retirement age to 60 is absurd – 30 years of teaching is plenty.
At a time when more teachers are needed, this bill, if passed, will have negative results. It’s time for teachers to show some backbone. Get a better deal!
Dear Mr. Heidenfelder,
Thank you for your comments. Basing contributions on gross instead of net pay removes the incentive for members to stop participation in Section 125 plans. Please see this PERA on the Issues post for more details: https://peraontheissues.com/index.php/2017/11/15/board-proposal-calls-for-clarity-in-salary-parity-in-benefits/
I too am disappointed in the proposal for freezing COLA for two years and reducing it (for the second time in recent years) when it keeps getting harder and harder for retirees to keep up with the increases in premium and co-pays for medical insurance. We in Medicare already have experienced decrease in level of service from Part D coverage which I can only assume will get worse in future years. How can you justify making current retirees keep giving up more when we spent 25-30 years believing in the promise of a retirement with dignity?
Why do we even need to reach this arbitrary “fully funded” status in 30 years? This is just a political trick used by the extremist conservatives who want to get their hands on the PERA trust money so they never have to raise taxes which is ultimately the platform they run on to be elected?
Roxana M.,
We acknowledge that retirees would be the first to be impacted if this legislation were passed into law by the legislature. Please know that the Board made every effort to protect the annual increase and achieve the goal of full funding in 30 years.
The reason for the 30-year amortization period is so that there is not an inter-generational shift in who pays for retirement benefits. An amortization period longer than 30 years increases the risk associated with surviving another severe economic downturn. The 30-year amortization period is deemed appropriate by the Governmental Accounting Standards Board and this is the goal outlined in state law at §24-51-211.
PERA would be at significant risk if the annual increase was not suspended and reduced as the Board proposed and as reflected in SB 200.
By reducing the AI retirees may be forced to move themselves and their money from Colorado to a state that does not pay state taxes to offset the negative impact to their retirement income. Public employees often are paid below industry standard but the defined benefit was an incentive to remain in the system. Seems like that would be less of an incentive if this goes through. Adjust the change to 1.5% and allow it to increase if the shortfall is being addressed!
Thank you for hitting the nail on the head.
I agree. Also we shouldn’t be responsible for there screw ups. These people or politicians who think of such BS need to be ousted, and walked in ours shoes. Where did the funds go that need to be replaced. Who’s shoaking us again? They need to stop this……….
As a retiree, I understand the need for adjustments. But using a fixed cap to annual retiree increases is short sighted. What happens if inflation reaches significantly higher levels and PERA’s return on investments increases substantially. The annual retiree increase should be tied to a consumer price index and/or an investment rate of return measure.
I agree completely that setting a cap on cost of living is arbitrary. There is an increasing probability that inflation will return and that a permanent 1.5% or 1.25% cost of living would create mean retirees would simply begin to fall behind! In the first go ’round of PERA cuts, there was a formula presented. If there has to be a penalty paid via the cost of living, I would much rather take a reduced cost of living that is based on the actual rate of inflation, i.e, if inflation is 2% we a 0.5% increase, if inflation is 4%, we get 2.5%, and so on! Otherwise, call it what it is, A BENEFIT REDUCTION!
Eight years ago, when SB-10 was passed, Sponsor Josh Penny reported in The Denver Post that 70 percent of the PERA funds saved under SB-10 came from retiree Annual Increase reductions. What percentage of SB-18-200 PERA savings will be funded from retiree Annual Increase reductions?
Dear Ms. Chamberlin,
For clarification, 90 percent of the savings in SB 1 were attributed to the reduction in benefits for all members, not just retirees who were impacted first by the suspension and reduction in the annual increase. Remember that all members once they become retirees will be impacted by the suspension and reduction in the annual increase.
In SB 18-200, retirees are impacted by 18 percent of the proposed plan changes, current and future members are impacted by 57 percent of the proposed plan changes, and employers are impacted by 25 percent of the proposed plan changes.
As already mentioned by others who have previously posted, not happy with this bill or with PERA’s administration. This will be the second time a promise has been broken for PERA retirees. How about a provision that reduces PERA administrative and investment staff pay each year investment return goals aren’t achieved? As it is now us retirees are the ones being punished for PERA’s poor performance.
Do I understand that PERA Board and employees will receive a 5 percent increase in pay.
Dear Mr. Donald,
The member-elected PERA Board members serve without compensation. PERA employees are PERA members and will be participating in any legislative changes enacted by the Colorado General Assembly and signed by the Governor. (Annual increases for PERA employees are determined by the Board through the budget process that occurs in the October/November time frame, so your information about PERA employee raises is not correct.)
Senate Bill 18-200 places an undue burden on retirees. It will reduce and freeze the Cost Of Living Adjustment (COLA) to zero in 2018 and 2019. Thereafter, the COLA will forever be reduced to a maximum potential increase of 1.25 % per year beginning in 2020. Encourage your legislators to oppose the provision of this bill that freezes and then reduces the potential COLA’s. This provision will result in a substantial reduction in the lifetime value of our “Annuities”.
The provision in SB 18-200 for a legislative oversight committee is also a bad idea. In 2010 we were told that SB 01 was the big fix needed for long term solvency by PERA and legislators. Eight years later PERA apparently recognizes that solution was short sighted (because we are living too long?). This new plan will keep the fund whole for the next 30 years. Sure it will.
The proposed 2018 legislation is another version of the same problem and it will be the 2nd significant cut to retirees’ incomes in 8 years. At this rate, we can look forward to complete elimination of COLA’s by 2026. In each case PERA pushes, and the legislature blesses, this concept of the need for retirees to share the pain to resolve PERA’s and the legislature’s poor planning and investment practices. It is both morally and ethically wrong to cut COLA’s of people who are living on fixed incomes. Legislators who need to have that explained to them ought not to be overseeing PERA. PERA board members and PERA employees who cite a court case affirming their legal authority to employ this option should be replaced. A legal “option” does not override a moral or ethical imperative.
Couldn’t have said it better thank you.
Uping the retirement age for current members doesnt seem fair. I can understand eliminating the COLA because retirees no longer contribute. Upping the retirement age to 65 for new employess is fair game, the employee knows what he/she is singing up for. However stating that i now have to work an extra year for every 4 years till the age of 46. I didnt sign up for that. I have 10 years in pera and now id have to work an extra three years. People will sue you for that!
Jeff,
I support your basic assertion that it is not fair to change your deal after 10 yrs and now require you to wait until you are 65 yrs old to retire. However, I take issue with your willingness to throw retirees under the bus regarding the issue of COLA’s simply because they are no longer contributing members. Reducing or eliminating the COLA was not the deal they were led to believe they had when they were employed and contributing prior to 2010. The notion that a member’s retirement agreement is fair game because the person retired and is no longer a contributing member is something I hope you will reconsider.
The deal pre-2010 retirees were led to believe they had when they were employed was that they would have a 3% COLA each year if they retired. It is no more “fair”, moral, or ethical to change their deal than it is to change your deal simply because retirees are no longer contributing members. Even Social Security maintains a COLA. The SS COLA for 2018 is 2%. The proposed PERA COLA for 2018 is Zero.
For the history of Social Security Cost of Living Adjustments, please see this page on the Social Security Administration website: https://www.ssa.gov/oact/cola/colaseries.html
Written so well but seems to fall on deaf ears. Thanks!
Paul,
I believe you are on the side of the PERA employees and retirees and don’t mean to berate you.
I thank you for clarifying and confirming that any and all changes to PERA retirement after initiating employment are unfair and a breach of the employment contract. Of course, I’m talking about any negatively impacted change as I don’t think we would ever have to worry about the state making right on something that they previously took away. The state should be held accountable for future compliance of the employment engagement. The employees pay it forward during a career that spans decades and when it’s time for the system to uphold their end of the bargain they feel it’s warranted to renege on it, at which point the used up employee has little power to do anything about it. I see that there is a need to strengthen the retirement account but believe there are better ways to do that than on the backs of the people that this state relies on to function. For one, fund administrators could do a better job of investing our money during the working years. Additionally, I don’t believe the picture is as bleak as they make it to be. Few, if any, retirement funds can be seen as being 100% solvent at any time, yet that appears to be what this most recent push is hoping to attain; much like the last push in 2010, as well as the next push to come when they realize that this current proposed fix still couldn’t get us to that mark. I think we all understand that there are no guarantees in life or with our future; but, when we make a career of taking less with the understanding that we will be able to relax during our retirement years, there is something morally, ethically, and seriously wrong with learning that what we were led to believe was actually always subject to change and in a detrimental way to our future livelihood.
Well stated
Jeff ?“Retirees no longer contribute…” ?! that is pretty much the definition of retirement ! The end of a career of contribution and a return on that investment as stated in the contract under which you workred. However, there IS still a significant contribution in taxes taken from pensions that return to the state.
The red herring here is the “need” to “fully fund” PERA . First of all, it’s an amortization whose obligation is ongoing and unless education is forever halted there IS no time that all obligations will be paid. Second, fully funding never seems to ask for contributions from the actual beneficiaries of education, the taxpayers (including ourselves). For years the legislature underfunded education and the State never kept its funding in step with population growth and booming markets. Now, after a “Taking” of vested, earned benefits in 2010, we see another theft EVEN as the economic picture is excellent ! I’ve seen no effort to fund PERA other that a reduction in the incomes of current and future retirees, even as Colorado economy is soaring.
Here’s a reality check. After eight years as a PERA retiree, my net monthly benefit is now less than when I first retired due to PERA Care increasing 178% and my benefit only increasing 16%. Eliminating or reducing the COLA could drive some retirees into poverty. If PERA does not have a positive investment return, will there still be the 2-3 COLA moratorium on top of the proposal in SB 200? Will current PERA employees receive a salary increase?
Also, little is being said about the Windfall Elimination Provision. By our working at PERA, our Social Security benefits are reduced by approximately 75%. Legislators who do not understand or mention this provision are doing a disservice to the state retirees.
By even considering adjustments to the COLA, PERA is adding insult to injury to the retirees. Less SS and less or no COLA makes for a poorer retiree in this expensive city and state.
Not what I worked for or was promised!!! The legislators should consider phasing in funding changes and then evaluating if these have been effective to PERA’s liability before even considering the draconian adjustment to the COLA.
Dennis,
Thank you for pointing this out. I believe you are correct in that they don’t even consider this and even if they have it is something that they, more than likely, would wish to keep buried. This is certainly an arguing point that needs to be brought to the forefront.
We are not responsible for the mistakes but we are paying the price.
The PERA staff should take a pay cut of 2.85% see how they like the reduction of benefits. Last time I checks it was PERA administration that screw up and lost all of the funds in 2008.
Tom,
PERA employees are PERA members and will be contributing an additional 3% to PERA if SB 200 is enacted. Like all active members, they will also have a three-year wait before becoming eligible to receive an annual increase.
I am concerned that nothing is ever mentioned about the State’s lack of funding their full contribution since 2000 or earlier. They owe PERA at least 20 billion dollars! The State was fully funded prior to Bill Owens being elected governor. He then lowered the retirement age and allowed employees to buy time at a reduced rate and proceeded to NOT send PERA that State’s full contribution amount. The State has a constitutional obligation to fully fund PERA and our legislatures has taken it upon themselves to cut the amount and dig this whole! Also, why are our legislators pushing a defined contribution plan? It has been proven over the years to cost more than the defined benefit plan and they are taking away contributions that belong to PERA’s defined benefit plan.
Dear Ms. Hall,
Please see this PERA on the Issues article for information on the sources of PERA’s unfunded liabilities: https://peraontheissues.com/index.php/2017/12/26/sources-of-peras-unfunded-liabilities/
See the second chart in this story and check the right hand column for totals. (Click on the table to see the table full screen.) The contribution deficiency is $4.5 billion of the $32 billion total.
Your absolutely right the state has fallen short. Please continue to make it clear to everyone voting on this bill to have the state make things right an continue to do so in the future. Thanks!
Thank you bringing this fact into the discussion. I think it is fair to make some sort of suggestion that employers (and the State is not the only one out there) who have failed in the past and continue to this day to fulfill their obligation to this problem?
Why is the PERA board silent on this? They should at least provide some explanation on why this is ignored instead of again pushing a bill that requires those who were promised a secure retirement to again take on the brunt of solving this so-called underfunded burden?
Lest the legislators forget the majority of PERA retirees also pay taxes to the State and local communities where we live.
Sandra,
To the best of my understanding I believe the state is pushing the defined contribution plan because, although they are quick to point out how well such 401K retirement accounts tend to grow as compared to a PERA defined benefit account, they fail to acknowledge that much of that is due to the employers’ matching contributions and they don’t plan on making similar matching contributions to the defined contribution plan. Thus, without contributing to the defined contribution retirement account there is a savings for them. Additionally, retirement under the defined benefit plan includes PERA Care, which would be an additional cost for the state, whereas PERA Care is not included with the defined contribution plan but can be purchased separately by the retiree.
Right you are, Sandra. Except Gov. Owens did not reduce the rate to purchase service credits, that was the PERA Board with approval of the state legislature. The program lasted only a couple of years, until the market crashed in 2006. Then the PERA Board panicked and increased the purchase rate from a flat 18% to over 30%, depending on member’s age.
Then there’s the Windfall tax that not only effects members who contributed to Social Security, but f the member’s spouse worked for an SS employer and the spouse passed away, the PERA member is penalized at the same rate.
Keep in mind, many teachers are/were forced to work second and third jobs just to make endsmeet. In many families with both parents working as teachers, one or both must find second jobs just to keep above the poverty level. No joke! Tell me what other group of college educated professionals must work 2 or more jobs to live above the poverty level?
The issue of PERA employee compensation packages is completely out of control! The CEO of PERA receives a seven figure salary. That’s right! 7 figure salary. Then the PERA Board wants to freeze my pay for 2 years. Meanwhile my health care premiums have increased almost 200%. No wonder I can barley afford food, and modest housing . What i cant afford is repairs on a 15 yr old car, copays for preventive, immediate and emergency medical care, maintenance on my house and a vacation in 12 years.
Here’s one, how many people know that aarp, American Association of Retired People was started by a lady who found a retired teacher living in an abandoned chicken coop. That’s right it was good enough for fowl to live in, yet a woman lived it, because it was all she could afford.
No wonder, the brightest and most talented of our young adults seek careers other than teaching. Shame on Colorado, we’ve always had above average cost of living and significantly lower than average salaries. Maybe the PERA Board and the Colorado Education Association, I’m a lifetime member, will confinse the legislature to build more chicken coops so retired PERA members rhave a place to live.
OK, I’ll ask again. The specifics of what is meant by the section titled “OTHER PROVISIONS” in the Comparison of PROPOSALS to which you provide a link is all important. That section reads, “Implement an automatic-adjustment provision that adjusts employer and employee contributions as well as the AI to keep PERA on a path to full funding in 30 years.” What specifically are the automatic-adjustment provisions and how do they work? What are the provisions, if any by which the AI would be re-established to 2%?
Dear Mr. Buckner,
Thank you for following up. We were verifying the information about this aspect of SB 200 so that we would be responding with accurate information.
The concept of the automatic adjustment feature is to allow employer/employee contributions and the annual increase to adjust so that the plan reaches full funding. Currently, legislation is required to change employer and employee contributions, as well as the amount of the annual increase.
In SB 200, the mechanism would work like this: Starting in 2020, if contributions from employers and members are less than required to keep the plan on track to being fully funded, employer and member contributions can increase by up to .5% and the annual increase would be reduced by up to .25%. The annual increase cannot be lower than .5%.
If employer and member contributions are more than required to keep the plan on track to being fully funded, employer and member contributions would be reduced by up to .5% and the annual increase would be increased by up to .25%.
A summary of this provision may be found in the bill on page 3 and details begin on page 22.
https://leg.colorado.gov/sites/default/files/documents/2018A/bills/2018a_200_01.pdf
Well this will be even more disastrous to retirees. Seriously, whose idea was making decreases automatic and a COLA of .5%? Why isn’t there more discussion about limiting the amount insurance premiums and co-payments can go up and if they rise by higher than the current COLA then the COLA needs to be increased?
The more checks and balances that are eroded from the regulation of PERA funds the less stable it will become for members. This is not about the STATE balancing some insane budget parameters. This is suppose to be about providing for a stable and sustainable retirement income for workers who spent decades working for the benefit of this state. We have always argued that financially independent retirees were good for our economy. This will be just another nail in the coffin – literally.
What a joke! No wonder people are leaving State employment in droves.
This is very unfortunate. Not only did I take a pay DECREASE to work for the state, I had to sign the windfall fall provision that affects my ssn benefits. Now I am reading that I will have to work longer due to being under 46 to receive benefits, contrary to what I thought I signed up for, as well as take an effective pay cut due to higher contributions being required and receive less benefits as a result once I do retire. Who knows, this legislature may fully get rid of the DB plan within 30 years the rate this is going.
Tell me what exactly is the allure of working for the state now from the private sector? I took a 20 percent pay cut, gave up on employer matching 401k contributions, receive no end of year bonuses, signed a document that makes my ssn benefits dramatically reduced to be met with this? My decision to work for the state came from the mindset increased security with lower pay. This security is no longer quite there it seems.
So I now have to work until 65 to receive full benefits despite having well over 30, closer to 40 years in at that time IF I stay while I have colleagues retiring with full benefits at 50 today that we’re able to buy years at that!
If you want to rid yourself of talent, this is how you do it. These moves are making me HAVE to explore not making the state a 30 year career.
John,
You are 100% correct and I think their plan is working; unfortunately, they are not concerned with the future of state government services. In 20 years, when they will have finally driven the last nail into the classic pension system, and along with it all services which this state depends on, they can pat themselves on the back and immediately begin wondering where it all went wrong as they realize what a mess they created: why are Colorado’s students’ performances in the lower third of the country, why is teacher retention at an all-time low, why is customer service complaints at the DMV at an all-time high, etc.? Like you, I took a pay cut and gave up a better benefits package to come work for the state with the idea that I could count on a retirement 30 years into the future. I’m in my 16th year and have similar thoughts as you. I honestly could not recommend that anybody come work for the state. To me that’s sad, but I don’t think they care; they are only worried about taking away but they never pay it back, not even when the economic times are good and they could.
I find the reduction if the COLA to current retirees completely in appropriate. Not only am I not able to collect approx 75% of my SS pension due to the Windfall Provision, but now I must accept a COLA reduction to 1.25 percent for the rest of my life! Are you kidding?! This is not even equal to SS’s increase! Do people fully understand what it takes to even live in Denver as a retiree? You are hedging your bets with this plan just as you did during the recent recession and look how that turned out! More reductions. There are no guarantees this will work. Stop making changing that affect a population who are mostly not able to supplement their income in any meaningful way in their old age. That along with the state’ debt to PERA is unacceptable. No bill should be passed without the state paying their debt first. Then look at the numbers again.
The SSN windfall provision needs to be rescinded with these changes.
Hello John,
Thank you for your comment. Remember that the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) are parts of Social Security which is a federal program (not a state of Colorado benefit). It would require Congressional action for these provisions to be rescinded.
Please stop telling us that PERA would be at significant risk if the annual increase was not suspended and reduced. Why should we believe that statement based on information that was given to us prior to retirement, but apparently PERA’S opinion changed at your convenience when Senate Bill 10-001 was passed. Meeting after meeting across the state PERA always quoted Ken Salazar assuring us that there would no reduction in benefits and annual increases. It appears as I read other comments made by others that PERA is expressing an attitude of total indifference to our concerns. May I remind you that Colorado State Supreme Courts ruling on Senate Bill 10-001 was based on their interpretation and that doesn’t make a wrong right. Why haven’t you come out and opposed Senate Bill 18-200? PERA’S board recommendation is wrong considering that the elephant is still in the room. Meanwhile, board members — including two of Hickenlooper’s own appointees — ripped into the governor’s plan for failing to address what they see as the elephant in the room. According to PERA’s actuaries, the government has underfunded its share of the pension by $4.5 billion since 2003.
The current mess is not something retirees created or current employees that are still working. This mess was created by past legislative decisions and PERA not opposing those bad decisions. Most of what is currently be proposed is totally asinine! Letting more have the choice of a defined contribution plan with no social security as a safety net. When I went to work under PERA it was a career for the long haul. Is the idea now for PERA to cave in to political pressure and not advocate for what is right? It appears that is the path that PERA is going and maybe it is time for a good house cleaning. In congress H.R 1205 to repeal the WEP/GPO and in the Senate S915 to do the same seems to be long shot. Only two democratic congressmen have signed on to H.R. 1205 and not one of the Colorado Senators have signed on to S915. Pretty sad! This slight glimmer of hope might be the only thing that will help keep our heads above water if it actually would happen. Retirees if you are being impacted in anyway by these unfair laws please write your Congressmen and Senators. Other State retiree groups are advocating on behalf of their retirees to have the unfair WEP/GPO repealed. Why doesn’t PERA advocate this interest on our behalf? The anger that is being expressed by many needs to be attended to and once again maybe we can feel that PERA is there for us.
I was doing some Internet research on the cause of death of the former CEO of PERA this past December. I came across an article about how much his last raise was before he died. While his death is unfortunate, the amount of money he was being paid was outrageous. According to the Colorado Springs Gazette, he was being paid $406,000.
I would like to know exactly how many employees it takes to manage and operate PERA and exactly how much each employee is paid.
What I would also like to know is how PERA can justify paying its employees outrageous amounts of money such as the pay of the former CEO while proposing drastic cuts to the member benefits of PERA.
Maybe if the pay of PERA management was reasonable, PERA would be fully funded. I think this is a disgraceful misuse of the funds members contribute to PERA. I would appreciate a response to this as I am sure many others would also.
Let’s take care of the members for all their years of hard work and insure the expectation of having a comfortable retirement.
Dear Mr. Creel,
Thank you for your comments and questions. PERA employees are PERA members, so we will be participating in any changes to the PERA plan enacted by the Colorado General Assembly.
PERA has 300 employees who serve the PERA membership (586,000) by administering benefit programs and investing contributions. Costs to do so are low when compared to other retirement systems or investment managers. See this information: https://peraontheissues.com/index.php/2017/10/04/how-does-pera-measure-up/
PERA’s administrative costs are available here on page 115: https://www.copera.org/sites/default/files/documents/5-20-16.pdf
The PERA Board’s Total Compensation Philosophy Statement may be found here: https://www.copera.org/sites/default/files/documents/totalcomp.pdf
I was doing some Internet research on the cause of death of the former CEO of PERA this past December. I came across an article about how much his last raise was before he died. While his death is unfortunate, the amount of money he was being paid was outrageous. According to the Colorado Springs Gazette, he was being paid $406,000.
I would like to know exactly how many employees it takes to manage and operate PERA and exactly how much each employee is paid.
What I would also like to know is how PERA can justify paying its employees outrageous amounts of money such as the pay of the former CEO while proposing drastic cuts to the member benefits of PERA.
Maybe if the pay of PERA management was reasonable, PERA would be fully funded. I think this is a disgraceful misuse of the funds members contribute to PERA. I would appreciate a response to this as I am sure many others would also.
Let’s take care of the members for all their years of hard work and insure the expectation of having a comfortable retirement.
Dear Mr. Creel,
Thank you for your comments and questions. PERA employees are PERA members, so we will be participating in any changes to the PERA plan enacted by the Colorado General Assembly.
PERA has 300 employees who serve the PERA membership (586,000) by administering benefit programs and investing contributions. Costs to do so are low when compared to other retirement systems or investment managers. See this information: https://peraontheissues.com/index.php/2017/10/04/how-does-pera-measure-up/
PERA’s administrative costs are available here on page 115: https://www.copera.org/sites/default/files/documents/5-20-16.pdf
The PERA Board’s Total Compensation Philosophy Statement may be found here: https://www.copera.org/sites/default/files/documents/totalcomp.pdf
In addition to contacting your own state senator and representative it will be helpful to contact the SB 18-200 Committee members and Bill Sponsors (links below) to express your individual opinions regarding what you don’t support or do support in this Bill..
tim.neville.senate@state.co.us,
senatorsmallwood@gmail.com,
lois.court.senate@state.co.us,
cheri.jahn.senate@state.co.us,
jack.tate.senate@state.co.us,
dan.pabon.house@state.co.us,
kpriola@gmail.com,
kcbecker.house@state.co.us,
Thank you, thank you for these email addresses!
In addition to contacting your own state senator and representative it will be helpful to contact the SB 18-200 Committee members and Bill Sponsors (links below) to express your individual opinions regarding what you don’t support or do support in this Bill..
tim.neville.senate@state.co.us,
senatorsmallwood@gmail.com,
lois.court.senate@state.co.us,
cheri.jahn.senate@state.co.us,
jack.tate.senate@state.co.us,
dan.pabon.house@state.co.us,
kpriola@gmail.com,
kcbecker.house@state.co.us,
Thank you, thank you for these email addresses!
Paul,
I believe you are on the side of the PERA employees and retirees and don’t mean to berate you.
I thank you for clarifying and confirming that any and all changes to PERA retirement after initiating employment are unfair and a breach of the employment contract. Of course, I’m talking about any negatively impacted change as I don’t think we would ever have to worry about the state making right on something that they previously took away. The state should be held accountable for future compliance of the employment engagement. The employees pay it forward during a career that spans decades and when it’s time for the system to uphold their end of the bargain they feel it’s warranted to renege on it, at which point the used up employee has little power to do anything about it. I see that there is a need to strengthen the retirement account but believe there are better ways to do that than on the backs of the people that this state relies on to function. For one, fund administrators could do a better job of investing our money during the working years. Additionally, I don’t believe the picture is as bleak as they make it to be. Few, if any, retirement funds can be seen as being 100% solvent at any time, yet that appears to be what this most recent push is hoping to attain; much like the last push in 2010, as well as the next push to come when they realize that this current proposed fix still couldn’t get us to that mark. I think we all understand that there are no guarantees in life or with our future; but, when we make a career of taking less with the understanding that we will be able to relax during our retirement years, there is something morally, ethically, and seriously wrong with learning that what we were led to believe was actually always subject to change and in a detrimental way to our future livelihood.
Dennis,
Thank you for pointing this out. I believe you are correct in that they don’t even consider this and even if they have it is something that they, more than likely, would wish to keep buried. This is certainly an arguing point that needs to be brought to the forefront.
Sandra,
To the best of my understanding I believe the state is pushing the defined contribution plan because, although they are quick to point out how well such 401K retirement accounts tend to grow as compared to a PERA defined benefit account, they fail to acknowledge that much of that is due to the employers’ matching contributions and they don’t plan on making similar matching contributions to the defined contribution plan. Thus, without contributing to the defined contribution retirement account there is a savings for them. Additionally, retirement under the defined benefit plan includes PERA Care, which would be an additional cost for the state, whereas PERA Care is not included with the defined contribution plan but can be purchased separately by the retiree.
John,
You are 100% correct and I think their plan is working; unfortunately, they are not concerned with the future of state government services. In 20 years, when they will have finally driven the last nail into the classic pension system, and along with it all services which this state depends on, they can pat themselves on the back and immediately begin wondering where it all went wrong as they realize what a mess they created: why are Colorado’s students’ performances in the lower third of the country, why is teacher retention at an all-time low, why is customer service complaints at the DMV at an all-time high, etc.? Like you, I took a pay cut and gave up a better benefits package to come work for the state with the idea that I could count on a retirement 30 years into the future. I’m in my 16th year and have similar thoughts as you. I honestly could not recommend that anybody come work for the state. To me that’s sad, but I don’t think they care; they are only worried about taking away but they never pay it back, not even when the economic times are good and they could.
I have worked for 21 years hoping to retire with PERA. I’ve worked for a school district as a single parent. All my retirement is PERA, no 401K or other savings. I was never paid enough to save. The big draw for working at a district was PERA. I was hoping to retire but now I’m not sure I will ever be able to completely retire. With the freeze and then a cap I’m scared. How many Walmart greeters are needed because it sounds like all PERA retirees will need a job just to survive.
I have worked for 21 years hoping to retire with PERA. I’ve worked for a school district as a single parent. All my retirement is PERA, no 401K or other savings. I was never paid enough to save. The big draw for working at a district was PERA. I was hoping to retire but now I’m not sure I will ever be able to completely retire. With the freeze and then a cap I’m scared. How many Walmart greeters are needed because it sounds like all PERA retirees will need a job just to survive.
This is the same crap we heard the last time PERA decided to rip off the state employees. What next negative cost of living adjustments?? All of you and the politicians supporting this should be ashamed of the con job you have pulled off on the hard working state employees that spent years working for less money, just so we could have white collar criminals take it away. You all make me sick! Colorado needs to step up and meet the obligations they promised us when we started working for the state. It is time to do the right thing.
I agree retires we paid our dues and every time the wind blows the legislators want more money from retirees. Change this change that .When the government gets into programs that work fine they screw it up .Retirees programs should be left alone and it should remain the same as when they retired no changes that would take money out of my pocket. Are they going to make my health care program cheaper not. No wonder Retired people still have to work
This is the same crap we heard the last time PERA decided to rip off the state employees. What next negative cost of living adjustments?? All of you and the politicians supporting this should be ashamed of the con job you have pulled off on the hard working state employees that spent years working for less money, just so we could have white collar criminals take it away. You all make me sick! Colorado needs to step up and meet the obligations they promised us when we started working for the state. It is time to do the right thing.
I agree retires we paid our dues and every time the wind blows the legislators want more money from retirees. Change this change that .When the government gets into programs that work fine they screw it up .Retirees programs should be left alone and it should remain the same as when they retired no changes that would take money out of my pocket. Are they going to make my health care program cheaper not. No wonder Retired people still have to work
By reducing the AI retirees may be forced to move themselves and their money from Colorado to a state that does not pay state taxes to offset the negative impact to their retirement income. Public employees often are paid below industry standard but the defined benefit was an incentive to remain in the system. Seems like that would be less of an incentive if this goes through. Adjust the change to 1.5% and allow it to increase if the shortfall is being addressed!
Jeff ?“Retirees no longer contribute…” ?! that is pretty much the definition of retirement ! The end of a career of contribution and a return on that investment as stated in the contract under which you workred. However, there IS still a significant contribution in taxes taken from pensions that return to the state.
The red herring here is the “need” to “fully fund” PERA . First of all, it’s an amortization whose obligation is ongoing and unless education is forever halted there IS no time that all obligations will be paid. Second, fully funding never seems to ask for contributions from the actual beneficiaries of education, the taxpayers (including ourselves). For years the legislature underfunded education and the State never kept its funding in step with population growth and booming markets. Now, after a “Taking” of vested, earned benefits in 2010, we see another theft EVEN as the economic picture is excellent ! I’ve seen no effort to fund PERA other that a reduction in the incomes of current and future retirees, even as Colorado economy is soaring.
Is the 1.25 percent a typo in the following paragraph?
Retirees
The only provisions affecting retirees (who are not working after retirement) are related to the annual increase. For current retirees, there would be a two-year suspension of the annual increase in 2018 and 2019, followed by a reduction in the cap of the annual increase paid each year thereafter to 1.25 percent from the current 2.0 percent.
The reason I’m asking is because in the package of recommendations, it says 1.5 percent.
Is the 1.25 percent a typo in the following paragraph?
Retirees
The only provisions affecting retirees (who are not working after retirement) are related to the annual increase. For current retirees, there would be a two-year suspension of the annual increase in 2018 and 2019, followed by a reduction in the cap of the annual increase paid each year thereafter to 1.25 percent from the current 2.0 percent.
The reason I’m asking is because in the package of recommendations, it says 1.5 percent.
I know the Denver Housing market has been going through the roof for several years now. What percentage of property taxes go to education? After knowing the market and economy in Denver alone this just does not make any sense at all.
I know the Denver Housing market has been going through the roof for several years now. What percentage of property taxes go to education? After knowing the market and economy in Denver alone this just does not make any sense at all.
Right you are, Sandra. Except Gov. Owens did not reduce the rate to purchase service credits, that was the PERA Board with approval of the state legislature. The program lasted only a couple of years, until the market crashed in 2006. Then the PERA Board panicked and increased the purchase rate from a flat 18% to over 30%, depending on member’s age.
Then there’s the Windfall tax that not only effects members who contributed to Social Security, but f the member’s spouse worked for an SS employer and the spouse passed away, the PERA member is penalized at the same rate.
Keep in mind, many teachers are/were forced to work second and third jobs just to make endsmeet. In many families with both parents working as teachers, one or both must find second jobs just to keep above the poverty level. No joke! Tell me what other group of college educated professionals must work 2 or more jobs to live above the poverty level?
The issue of PERA employee compensation packages is completely out of control! The CEO of PERA receives a seven figure salary. That’s right! 7 figure salary. Then the PERA Board wants to freeze my pay for 2 years. Meanwhile my health care premiums have increased almost 200%. No wonder I can barley afford food, and modest housing . What i cant afford is repairs on a 15 yr old car, copays for preventive, immediate and emergency medical care, maintenance on my house and a vacation in 12 years.
Here’s one, how many people know that aarp, American Association of Retired People was started by a lady who found a retired teacher living in an abandoned chicken coop. That’s right it was good enough for fowl to live in, yet a woman lived it, because it was all she could afford.
No wonder, the brightest and most talented of our young adults seek careers other than teaching. Shame on Colorado, we’ve always had above average cost of living and significantly lower than average salaries. Maybe the PERA Board and the Colorado Education Association, I’m a lifetime member, will confinse the legislature to build more chicken coops so retired PERA members rhave a place to live.
I agree that PERA is violating a contract it made with employees. This being the second time my cola will be reduced or frozen, I have realized a great monetary loss. Very unfair, should be illegal!
I agree that PERA is violating a contract it made with employees. This being the second time my cola will be reduced or frozen, I have realized a great monetary loss. Very unfair, should be illegal!
Digging in my memory many years ago a Federal agency decreed wisely that pension funds had to move from a sixty year horizon to a thirty year horizon for full funding thus giving us Senate Bill 1. My memory could be in error, but if it is correct this factor has never been explained or widely disseminated. I started teaching in 1967 which is handy as that was the year the Consumer Price Index (read inflation) was initiated. I made $100 a week so you do the multiplication. Inflation has been about 600% over the years i taught. Multiply $5200 in 1967 by 600% and you come close to what starting salaries for beginning teachers with a BA are. We Americans love to talk education but find it hard to walk the walk when it comes to supporting a teaching as a profession. My wife never worked after our children arrived, a personal decision, but did sit on the founding board for a county library and even the school board where we lived while we built our house and raised two kids. After I “retired” we came to the decision that financially we were not going to be solvent so we moved to a different country where after a little over twenty years we are still content. Take the series of COLA cuts and start multiplying. This is the future for us and the teachers who replaced us. We know that “bargains” are nice, but in the end schools get what they pay for. Can I imagine teaching until age 65? You must be kidding.
Digging in my memory many years ago a Federal agency decreed wisely that pension funds had to move from a sixty year horizon to a thirty year horizon for full funding thus giving us Senate Bill 1. My memory could be in error, but if it is correct this factor has never been explained or widely disseminated. I started teaching in 1967 which is handy as that was the year the Consumer Price Index (read inflation) was initiated. I made $100 a week so you do the multiplication. Inflation has been about 600% over the years i taught. Multiply $5200 in 1967 by 600% and you come close to what starting salaries for beginning teachers with a BA are. We Americans love to talk education but find it hard to walk the walk when it comes to supporting a teaching as a profession. My wife never worked after our children arrived, a personal decision, but did sit on the founding board for a county library and even the school board where we lived while we built our house and raised two kids. After I “retired” we came to the decision that financially we were not going to be solvent so we moved to a different country where after a little over twenty years we are still content. Take the series of COLA cuts and start multiplying. This is the future for us and the teachers who replaced us. We know that “bargains” are nice, but in the end schools get what they pay for. Can I imagine teaching until age 65? You must be kidding.
Dear Ms. Roundy,
The PERA Board proposed a 1.5% annual increase (COLA) and in Senate Bill 18-200, the annual increase is 1.25%.
Dear Ms. Roundy,
The PERA Board proposed a 1.5% annual increase (COLA) and in Senate Bill 18-200, the annual increase is 1.25%.
Why haven’t PERA come out and opposed Senate bill 18-200? Allow more to have the option of a defined contribution plan? I was fortunate that the Lamar Light and Power stayed in the defined benefit plan. Not so for many from the other city departments that voted to get out of PERA and go under a defined contribution plan. I’m not sure if anyone with PERA remembers this. Because of a city administrator that pushed to get this done it happened at the peril of many. Many at age 65 continued to work past 65 or until their health gave out because they didn’t have enough in their accounts. No social security or reduced and hoping one has enough in their defined contribution plan to last their lifetime. It appears with the amendment made to Senate bill18-200 that the state isn’t going to help. The state needs to do everything it can to find money to fund the PERA’S defined benefit plan! Why isn’t PERA holding the state to that instead of the board proposing more pain on retirees and current vested employees? I can’t afford a freeze for two years on my annual increases and lowering again down to 1.5 and current senate bill as it is now to 1.25%. If you listened to the testimonies given by many at the senate hearing a few days ago it hurts to listen to those testimonies. Was you listening? It is good to hear that Secure PERA is opposing this bill! Again are you listening? A couple is paying out $268.00 for Medicare Part B and once you purchase a good F supplement plan and part D plan the total including Part B is $800 or more. Retirees CPI basket of goods is greater because of medical. I wish that PERA retirees would look for supplement insurance outside of PERACARE because the plans cost too much when one can buy a good F plan along with a part D for less elsewhere. I strongly oppose PERA lowering the rate of return based on the assumptions that are being used. One thing is certain that the pain retirees is feeling is not based on any assumptions! If the senate is gets through with no changes than shame on them and PERA for doing nothing. Maybe are only hope is in house to set things right.
Dear Mr. Clevenger,
Thank you for your questions. The bill is an important first step in a long process, and we do not anticipate that this will be the bill that will ultimately pass. The bill contains many of the Board’s principles such as the attainment of a 30-year amortization period and preservation of the defined benefit plan (the DB plan is the default option for the expanded choice). The Board has directed PERA staff to continue to serve as a resource for legislators as this bill makes its way through the General Assembly.
Why haven’t PERA come out and opposed Senate bill 18-200? Allow more to have the option of a defined contribution plan? I was fortunate that the Lamar Light and Power stayed in the defined benefit plan. Not so for many from the other city departments that voted to get out of PERA and go under a defined contribution plan. I’m not sure if anyone with PERA remembers this. Because of a city administrator that pushed to get this done it happened at the peril of many. Many at age 65 continued to work past 65 or until their health gave out because they didn’t have enough in their accounts. No social security or reduced and hoping one has enough in their defined contribution plan to last their lifetime. It appears with the amendment made to Senate bill18-200 that the state isn’t going to help. The state needs to do everything it can to find money to fund the PERA’S defined benefit plan! Why isn’t PERA holding the state to that instead of the board proposing more pain on retirees and current vested employees? I can’t afford a freeze for two years on my annual increases and lowering again down to 1.5 and current senate bill as it is now to 1.25%. If you listened to the testimonies given by many at the senate hearing a few days ago it hurts to listen to those testimonies. Was you listening? It is good to hear that Secure PERA is opposing this bill! Again are you listening? A couple is paying out $268.00 for Medicare Part B and once you purchase a good F supplement plan and part D plan the total including Part B is $800 or more. Retirees CPI basket of goods is greater because of medical. I wish that PERA retirees would look for supplement insurance outside of PERACARE because the plans cost too much when one can buy a good F plan along with a part D for less elsewhere. I strongly oppose PERA lowering the rate of return based on the assumptions that are being used. One thing is certain that the pain retirees is feeling is not based on any assumptions! If the senate is gets through with no changes than shame on them and PERA for doing nothing. Maybe are only hope is in house to set things right.
Dear Mr. Clevenger,
Thank you for your questions. The bill is an important first step in a long process, and we do not anticipate that this will be the bill that will ultimately pass. The bill contains many of the Board’s principles such as the attainment of a 30-year amortization period and preservation of the defined benefit plan (the DB plan is the default option for the expanded choice). The Board has directed PERA staff to continue to serve as a resource for legislators as this bill makes its way through the General Assembly.
Thanks to Paul Pluta above are all the email addresses for the Coloraodo Assembly committee working on this issue. Instead of writing PERA it would seem more prudent to write your assembly representatives a thoughtful note. I am sending this:
First of all, I wish to thank all of you for being involved in the restructuring of PERA. I have been “retired” since June of 1996 after teaching in Jefferson County Schools, Golden High School for twenty-five years, thirty total years teaching. With your patience I would like to make some points about the restructuring. I am not whining, just stating some realities. I started teaching in 1967, handy as that is the year the national inflation index was initiated. From 1967 to the present inflation has been about 634%, the COLA index (Cost of Living Allowance) 751%, two different standards measuring two different things. I started at $100 a week which if you do the multiplication is about what a beginning teacher with a BA starts at in Jeffco Schools today. When I started in 1967 my classroom size was sixteen students while when I finished in 1996 it was whatever the Fire Marshall deemed possible which was about forty students. Every raise I received over the decades beyond getting my MA and pay schedule increments came out of class size, so there were never any “raises” as one might think of them considering inflation for instance. In the past twenty-one years since my retirement, inflation has averaged 2.7% a year according the US Department of Labor Consumer Price Index. This has been a time which has been considered to have low inflation. If the COLA for PERA retirees is further cut to 1.2 or 1.5% multiplied over ten years imagine the impact cutting 10% at 1.5% or 12% at 1.2% over each decade. As the COLA stays low retirees are receiving real cuts in buying power, plus the fact that some sectors of the economy like say medical has been seeing annual rises of around 5%. All medical costs for my wife and I, routine insurance costs to out-of-pocket, seem to run about $10,000-11,000 per year calculated over the past five years which out of curiosity I have kept track of, and we are healthy for our ages. That works out to a possible uncompounded $5000 per year increase in ten years.
While PERA is a polyglot of different types of work, I can only speak to teaching in public schools. How plausible is it that one could really teach in a classroom of approximately forty students when the teacher is at a age approaching sixty-five years? Teaching means being on stage full of enthusiasm, vitality, optimism, energy, etc. When off stage it takes exquisite planning, organizing, materials ordering, classroom eye candy, and thoughtfulness. While the aged are full of skills and wisdom, do you really think they belong in a classroom each day catering to the needs of approximately two hundred students? I think it is wishful thinking. While Colorado has much going for it, it still has a significant teacher shortage and teacher pay has fallen 7.7% in the last decade (www.denverpost.com/2017/04/13/colorado-teacher-shortage-crisis). Is this whittling down of Pera benefits going to attract talented teachers or drive them somewhere else? You figure it out. If you want better schools, a key ingredient is staff. America loves to talk quality public school education, but when it comes to actualizing this goal we seldom walk the walk particularly of pay and benefits. Why is there this apparent anger at government on all levels, and it seems government employees on all levels in particular? Then there is the talk about the “vacations” teachers have when in reality they are working a second job, taking classes, getting another degree to financially survive, doing course planning, or just decompressing and recharging. If you want talent teaching in schools you will have to pay for it and at least give attractive benefits.
Our answer after my “retirement” was to leave Colorado for another country where we could afford to live without financial worry. This alternative certainly is not for everyone, for us the transition was at times not easy, but looking back it was a good and practical decision. Our legal domicile is in Colorado where we pay taxes and vote. KC Becker and Tim Neville represent us in the Colorado Assembly. I hope what I have written here will be useful and best of luck to the Assembly and Colorado schools. Mark Dunn
Thanks to Paul Pluta above are all the email addresses for the Coloraodo Assembly committee working on this issue. Instead of writing PERA it would seem more prudent to write your assembly representatives a thoughtful note. I am sending this:
First of all, I wish to thank all of you for being involved in the restructuring of PERA. I have been “retired” since June of 1996 after teaching in Jefferson County Schools, Golden High School for twenty-five years, thirty total years teaching. With your patience I would like to make some points about the restructuring. I am not whining, just stating some realities. I started teaching in 1967, handy as that is the year the national inflation index was initiated. From 1967 to the present inflation has been about 634%, the COLA index (Cost of Living Allowance) 751%, two different standards measuring two different things. I started at $100 a week which if you do the multiplication is about what a beginning teacher with a BA starts at in Jeffco Schools today. When I started in 1967 my classroom size was sixteen students while when I finished in 1996 it was whatever the Fire Marshall deemed possible which was about forty students. Every raise I received over the decades beyond getting my MA and pay schedule increments came out of class size, so there were never any “raises” as one might think of them considering inflation for instance. In the past twenty-one years since my retirement, inflation has averaged 2.7% a year according the US Department of Labor Consumer Price Index. This has been a time which has been considered to have low inflation. If the COLA for PERA retirees is further cut to 1.2 or 1.5% multiplied over ten years imagine the impact cutting 10% at 1.5% or 12% at 1.2% over each decade. As the COLA stays low retirees are receiving real cuts in buying power, plus the fact that some sectors of the economy like say medical has been seeing annual rises of around 5%. All medical costs for my wife and I, routine insurance costs to out-of-pocket, seem to run about $10,000-11,000 per year calculated over the past five years which out of curiosity I have kept track of, and we are healthy for our ages. That works out to a possible uncompounded $5000 per year increase in ten years.
While PERA is a polyglot of different types of work, I can only speak to teaching in public schools. How plausible is it that one could really teach in a classroom of approximately forty students when the teacher is at a age approaching sixty-five years? Teaching means being on stage full of enthusiasm, vitality, optimism, energy, etc. When off stage it takes exquisite planning, organizing, materials ordering, classroom eye candy, and thoughtfulness. While the aged are full of skills and wisdom, do you really think they belong in a classroom each day catering to the needs of approximately two hundred students? I think it is wishful thinking. While Colorado has much going for it, it still has a significant teacher shortage and teacher pay has fallen 7.7% in the last decade (www.denverpost.com/2017/04/13/colorado-teacher-shortage-crisis). Is this whittling down of Pera benefits going to attract talented teachers or drive them somewhere else? You figure it out. If you want better schools, a key ingredient is staff. America loves to talk quality public school education, but when it comes to actualizing this goal we seldom walk the walk particularly of pay and benefits. Why is there this apparent anger at government on all levels, and it seems government employees on all levels in particular? Then there is the talk about the “vacations” teachers have when in reality they are working a second job, taking classes, getting another degree to financially survive, doing course planning, or just decompressing and recharging. If you want talent teaching in schools you will have to pay for it and at least give attractive benefits.
Our answer after my “retirement” was to leave Colorado for another country where we could afford to live without financial worry. This alternative certainly is not for everyone, for us the transition was at times not easy, but looking back it was a good and practical decision. Our legal domicile is in Colorado where we pay taxes and vote. KC Becker and Tim Neville represent us in the Colorado Assembly. I hope what I have written here will be useful and best of luck to the Assembly and Colorado schools. Mark Dunn
Well stated
Do I understand that PERA Board and employees will receive a 5 percent increase in pay.
Dear Mr. Donald,
The member-elected PERA Board members serve without compensation. PERA employees are PERA members and will be participating in any legislative changes enacted by the Colorado General Assembly and signed by the Governor. (Annual increases for PERA employees are determined by the Board through the budget process that occurs in the October/November time frame, so your information about PERA employee raises is not correct.)
We are not responsible for the mistakes but we are paying the price.