The Pension Review Commission, a legislative panel that meets in between regular legislative sessions, plans to introduce new PERA-related bills in the 2024 Colorado General Assembly.
The Commission has the responsibility of overseeing PERA and proposing legislation that could affect the plan and benefits. It met in October to discuss ideas for legislation, and committee members voted to move forward with two PERA-related bill drafts.
PERA-related bill drafts
The Commission drafted one bill that relates directly to PERA and Plan benefits. Titled Additional PERA Service Retirees for Schools, the bill draft aims to expand the number of PERA retirees who can work for school districts without reductions in their benefits. Under current law, school districts can hire 10 such retirees when there is a critical shortage. The bill draft, if passed, would remove the critical shortage requirement and allow larger districts to hire more retirees.
The other bill draft aims to provide some financial assistance to PERA retirees in the form of a temporary tax credit. That bill draft, PERA Retiree Refundable Income Tax Credit, would provide a tax credit of $700 for qualifying retirees on their tax returns for tax years 2024 and 2025. Lawmakers introduced a similar bill last year, but it didn’t pass.
What’s next?
The PERA Board of Trustees typically discusses PERA-related bills after they’re introduced at the Capitol and will take a formal stance on any that could affect PERA’s finances.
Legislators on the Pension Review Commission will introduce their bills in the next legislative session, which begins in January. The bills will follow the usual process of making their way through the legislature before passing or failing.
PERA On The Issues will keep track of PERA-related legislation throughout the session and provide updates when they’re available.
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I oppose the proposed income tax credit legislation because; I am no longer a Colorado resident and I resent benefit increases for a select group of retirees. This would only extend the years required to fully fund the PERA retirement funds. If you can make it universal for all retirees, I can accept that, but I vigorously oppose the legislation as presented.
This proposed bill needs to die in committee. As worded it benefits only PERA retirees who are Colorado residents, without consideration of non-residents (as I am). But it harms ALL PERA retirees if Larry Williams is correct that this tax credit “would only extend the years required to fully fund the PERA retirement funds.” This is completely unacceptable.
Just to clarify, the bill would only create a tax credit for retirees, not a benefit increase. It would not have a financial impact on PERA, but it would reduce the state’s tax revenue: https://leg.colorado.gov/sites/default/files/images/committees/fiscal_note_bill_2_-_pera_retiree_refundable_income_tax_credit.pdf
It is patently discriminatory. Many retirees moved out of Colorado to states without state income tax. From a fiduciary responsibility, a benefit for a select group (only residents) is malpractice.
Skip the proposal, and put in a realistic COLA.
When is PERA going to address cost of living increases for retirees? We’ve been forgotten. My pension no longer covers the expenditures that I have. I live a frugal life. I never thought I’d be in the position to have to drastically cut back on regular necessities. PERA retirees served our communities for many years. It’s about time you advocate for a proper adjustment to our pensions.
Glad you are doing your part and we all need to continue to contact our local leaders about the insignificant Cola retirees are getting. It is a shame how the State is treating us.
I agree completely and am ashamed at the amount my monthly increase is per year.
i agree. Everything we pay for has gone up more than a measly 1%. Between HOA and taxes we will be out of our homes sooner or later because of the increase of monthly payment.
Any effort to compensate for retirees taking a hit with the modified and limited COLA allowance should be explored. However, this proposal does nothing for those who no longer reside in Colorado. All retirees deserve equal treatment regardless of where they now reside.
Good Comment! I’m thinking that unequal treatment, especially with respect to tax related programs (all state programs, including PERA, are tax related) and lack of representation (for out-of-state beneficiaries) are worthy of a lawsuit (didn’t the America Civil War and Revolution concerned equal treatment and taxation without representation?)!
It is patently discriminatory. Many retirees moved out of Colorado to states without state income tax. From a fiduciary responsibility, a benefit for a select group (only residents) is malpractice.
Skip the proposal, and put in a realistic COLA.
I agree wholeheartedly with the comments expressed by Larry W, Linda P, and Bill M. However, I can see both sides of the coin. I too live outside of Colorado now and the tax credit as proposed would not benefit me. But what needs to be understood here is that as non Colorado residents, no Colorado state taxes are withheld from our benefit payments. This is a Colorado law and the Colorado legislature has no authority to refund monies collected by other states. That said, there still ought to be some compromise that can be reached to also make this applicable to us non Colorado residents as we DID reside in Colorado long enough to retire from it in service to the state in some capacity and that should count for something. Maybe instead of a tax refund a temporary benefit increase for those years that is only applicable to non residents of Colorado for those 2 years? Mind you I am no lawyer or law maker, but that sounds like a reasonable compromise to me.
And as to the pitiful COLA increases we are getting, there also should be some kind of way out of this as well. I am have gotten another 20 bucks a month increase the last couple of years, and that in no way keeps up with the actual COLA. This is NOT the PERA plan I signed up for and paid into all those years ago. Myself, I personally blame governor Ritter for this fiasco as HE is the one who gutted my retirement fund. Why don’t we all band together in a class action suit against him to try and recover a portion of our money? I know he doesn’t have all the money personally to be able to collect it from him, but it would at least be a symbolic gesture that would at least take out some of my ire and frustration with the man. I am aquainted with him and helped him cut his teeth as a DA when I worked for Judicial, and feel stabbed in the back by him.
Ritter is an (insert derisive term here) who padded his PERA at UNC… it’s Romer who started patronage and Owens that refined raiding PERA.
However, PERA as an instrumentality of the state, is the party to sue. Possibly under the 5th Amendment Takings Clause (The Contract Clause case of Justus v. PERA against 2010’s SB-001 failed at the Colorado Supreme Court level… because the jurists failed to recuse themselves due to conflict of interest in being PERA members, but they also violated their oaths to uphold the U.S. Constitution).
A new case could be against 2018’s SB-200 as an ongoing illegal taking after a COLA was promised by 2010’s SB-001; and denied even though state revenue surpluses have been refunded under TABOR; but there’d NO excess revenue to refund, if the state upheld its obligations and paid its debts (like promised COLAs to PERA beneficiaries)!
At one time, there was the “PERA Promise,” that PERA retirees were promised a guaranteed pension increase each year. Today, there is little guarantee of such and what is guaranteed does not and will never keep up with inflation. Teachers in Colorado today are being paid more than ever and they will benefit now and into retirement. By all appearances and in practice the “shared sacrifice” of making PERA solvent is laid at the feet and carried on the backs of retirees who do not receive a COLA, who do not benefit from current teaching salaries, whose healthcare costs (PERA Care) are greater than the 1% annual increase and the PERA health care premium subsidy has never changed.
The PERA Promise to retirees was taken away with the legislative changes made for PERA solvency. Now it feels like retirees carry the load for it.
It is not right. PERA should advocate for COLAs. A temporary tax credit does little to benefit retirees for the long term nor does it make up for the years when the annual increase didn’t keep up with inflation.
Fix it. It isn’t right.
I agree with Mark’s statements regarding the dismal treatment of all State of Colorado employees that have retired after serving the population of Colorado. I have lost about 25% of my buying power since I retired from the State of Colorado, just using the national inflation numbers compared to the increases provided by the State of Colorado. It feels like the local inflation rates may have been even higher than the national rates. I could not recommend the State of Colorado as a prospective employer due to the treatment of retired employees. The changes in the rules made by the legislature and the goals of PERA have made it a poor choice for the future.
It’s a shame, because Colorado is a great place to live and work, except for the retired former State of Colorado employees.
I agree that retirees have largely been forgotten. When I retired the COLA was 3% annually. Now it has decreased so much that it is a disgrace. The $700 tax credit would be helpful in addition to increasing our COLA.
In an environment where inflation, (a predictable and fundamental piece of capitalism in general) is way more than 1%, it’s fiduciary malpractice to have an annual bumper called “cost of living” increase at 1%, and sometimes 0%. The “taking” occurred in 2010, it was determined by the court that 3.5% was indeed, both in language and earlier practice, a “contract”. Upon appeal, the state supreme court overturned the the lower court decision.
Maybe it’s time to examine paying social security tax and PERA
contribution. South Dakota has this system. All recipients in South Dakota
received a state COLA and the 8% Social Security COLA.
I oppose this legislation. It only applies to PERA retirees age 65 or older with specific income limits. Any AI/COLA payments must apply to ALL retirees no matter where they reside and
What their annual income is. In case many have forgotten, PERA suspended the AI for 2 years and justified it by saying that there was 0% inflation. Now, with skyrocketing inflation and our inadequate 1% AI for several years, PERA is silent on recommending a bill to fix the AI. The PERA Board and PERA employees have a fiduciary responsibility to ensure that they do what’s in the best interest of retirees and they have repeatedly failed to live up to their obligations and responsibilities! PERA I would like to know why new legislation was not recommended to fix the inadequate Annual Increase (AI)?
Good point James. I would like to hear an answer to this question. Also, do PERA employees get the same AI as retirees?
Yes, PERA employees get the same AI as current retirees. However, PERA employees receive annual raises based on this high inflation which helps them defray the costs of goods/services and their annual raises will result in a higher PERA benefit when they retire.
Alternatively, existing PERA retirees don’t get any annual raise to help defray skyrocketing inflation and the AI has been reduced multiple times and is at 1% now. PERA published a report on the future of the AI and it is projected to decrease in the next 10 years and the report showed that existing retirees will be dead before the AI increases. Keep in mind that the AI can only increase by 0.25% per year and is capped at 2.00%!
I am (similar to others sharing opinions here) a PERA retiree, and would agree that this is not the PERA plan that I voted (as a public employee) to join in, back in 2004.
I used to work in Budgeting, but I am no accountant. What I believe is that the rules governing public institutions’ s finances were tightened several years ago, following the demise of one or more public pensions nationally (one was in Anaheim, CA, I think). They had become insolvent and I’m sure many pension contributors and retirees lost a lot of money, if not all that they had contributed while still working.
My understanding is that the Government Accounting Standards Board (GASB), that regulates how government agencies report their financials, required public pension plans to report much of their employee contributions as a “Liability”. In short, this created a huge negative “net worth” in their annual year-end financial reports. To combat this, the Colorado Legislature (who is responsible for the financial well-being of PERA) mandated this maximum of a 1% annual increase.
With all that said, I’m not an accountant and may have this incorrect, at least in part.
What I wish, is that someone from PERA would actually write to us and explain why it is that we are in this situation. They remain very quiet about it, and if anything just blame the Legislature. We do deserve more by way of explanations than what we are getting (and I may have missed it if they did explain it). I think it may be lost of the appropriately compensated employees at PERA just how much reliance we as retirees have on PERA, and how- in a high inflationary environment such as this- that many retirees are not receiving what they were led to believe they would.
Hi Bruce,
The PERA Board and staff are aware and sensitive to the slippage of purchasing power our retirees and other beneficiaries are experiencing while inflation remains high. We know it’s a very challenging situation.
Under the reforms of Senate Bill 200 in 2018, PERA is required by law to reach full funding by 2048, and as a result, the annual increase for retirees adjusts up or down based on funding progress and cannot exceed 2% while PERA still has unfunded liabilities. Working member contributions are also subject to adjustments. This is to ensure that we can continue paying benefits for current and future retirees — we are obligated to pay benefits not just now but for many decades to come. Increasing benefits beyond what’s permitted in statute would increase plan costs, thereby extending the time it would take PERA to pay down that unfunded liability, and the PERA Board remains committed to that 100% funding requirement. Ensuring the sustainability of the fund is vital to our mission and PERA’s future.
Hi, thanks for the response.
Yes, I agree with what you wrote. I think what we would like to know is what is meant by “full funding”, and why it’s important now and wasn’t back when many of us were working and planning our retirement finances. As I wrote, my (limited) understanding is a change in accounting rules. With that said, and given that most of us are not accounting gurus, it might help is someone was to write something in language that’s understood by us all, as to the background behind the State Senate Bill 200 in 2018.
Maybe it’s just as simple as that PERA was running a structural deficit prior to 2018, and the State needed to cap benefits and increase contributions (which is usually paid for by taxes that we all pay, so it’s a double-whammy for retirees), just tell us. Or it was some technical accounting change- but why is that important now and wasn’t 10 years ago?
Thanks again.
When we talk about “full funding,” we mean having the money on hand to pay all owed benefits — current and future.
Prior to Senate Bill 200, the PERA trust funds had reached a point where the time horizon to meet that goal was much further out, and the plan’s risk profile was too high, meaning the plan was more vulnerable to an economic downturn. That meant action was needed to get PERA back on track and ensure the sustainability of the trust funds. These articles provide some good background:
https://peraontheissues.com/pera-signal-light-divisions-orange-mean/
https://peraontheissues.com/senate-bill-200-what-you-need-to-know/
https://peraontheissues.com/reviewing-the-positive-impact-of-sb-200/
Bruce,
Take PERA’s replies with a grain of salt, because PERA Board & Staff are just the tool of politicians who in turn are captive to their own ambitions and their campaign-financing masters on Wall and 17th Streets.
Governor Owens raided PERA by gifting Great West, owner of Empower Retirement, administration of a short-lived employer match program for state employees (as part of his ambitions to run for higher office until his infidelity saved us from his aspirations). The match-program was too expensive for PERA to support (the employer match came from PERA not workers’ employer, i.e., the state). Owens also pushed through legislation to allow state employees to buy service credit (based on their non-government work histories, up to ten years) at “fire-sale’ prices, which saddled PERA with future liabilities. Owens did this to encourage more senior workers to retire so he could purge state government of workers hired during prior Democrat administrations and hire cronies.
It was at the end of Owen’s administration, in 2006, when the legislature adopted stricter GASB rules requiring state pension funds amortize liabilities over thirty years, instead of forty years as existed in prior law. However, the legislature failed to appropriate any funds to address reducing the time to be sufficiently funded (which never was 100% or is commonly used, except by Colorado). It’s like the mortgage company telling you to pay-off your 30-year mortgage after 22 and 1/2 years but pay for thirty years of escrow fees!
Finally, the “Finacial Crises” of 2008 hit, and by 2010 the legislature, needing to circumvent TABOR restrictions, decided not to waste a crisis and eliminated the annual increase (capped at 3.5%) and replaced it with a COLA, capped at 2%, via SB-001.
Hickenlooper later politicized PERA to make points with the financial industry, and pushed through SB-200 in 2018, but his Presidential bid fizzled too (so now he’s just another lacky of the rich in the U.S. Senate).
All the while, the politicians have been treating a labor contract between government agencies and public servants as some kind of pricing discount between a service provider (of public services) and its customers (taxpayers), in order to curry favor with the electorate and to keep money that should go to PERA beneficiaries’ COLAs in the state general fund in order to compensate for TABOR budget restrictions (BTW: TABOR allows for a tax increase to pay pensions WITHOUT a vote of the electorate, but the politicians are too scared to govern).
In conclusion… PERA retirees need to wake up and agitate for what they’re owed!
Let’s face it. If it is underfunded, then the State needs to step in and correct it. Promises were made. In Colorado, school districts and the other PERA organizations hid behind this “Govt” plan to keep from having to pay into Social Security, pure and simple.
So rather than the solution resting on the agencies and organizations that took this way out, it is shifted to the recipients. A small increase in State taxes in one form or another is much more honest.
YES! YOU’VE GOT IT!
Take some of those TABOR refunds and spend them on COLAs that the state owes for services already provided!
Again. PERA response….”we are powerless to help with COLA because it is st forth in statute”.
PERA has the authority to propose changes to statute. Statute is changed all the time, to reflect ongoing needs.
The PERA fiduciary obligation is to work in the best interests of the retirees, and there is no excuse for pretending that 1% addresses “cost of living”. I want a straight answer to this comment, from PERA. Why won’t PERA introduce legislation to address this problem ?? A “COLA” is , by definition an instrument to keep pace with “Cost of Living”. Why not Lobby for your fiduciary responsibilities. The # of recipients who would fall under the contracted 3.5% has shrunk considerably over the last 13 years. It wouldn’t cost NEARLY as much now that at least have of that group is dead, and getting ZERO benefits. Please answer, without using the word “statute”. Answer everyone here who knows that Colorado can afford to support its retirees. I’ll wait>
Barry,
You’re correct that members of the PERA Board of Trustees are fiduciaries, and per state law, that means the Trustees must carry out their functions solely in the interest of all PERA members and benefit recipients and for the exclusive purpose of providing benefits. Our mission is to provide retirement security for our members while ensuring the sustainability of the fund, and that is the Board’s priority. We are obligated to pay benefits now and for decades to come, so ensuring the plan can continue to do so is vital.
Unlike a COLA, the PERA Annual Increase is not tied to inflation. It adjusts up or down based only on the progress we’re making toward reaching full funding. As we’ve mentioned previously, PERA is required to reach full funding by 2048, and the adjustments to retiree Annual Increases and working member contributions are key to getting us there. Potential legislation that would increase benefits or reduce contributions would increase plan costs, thereby extending the time it would take PERA to pay down that unfunded liability, and the PERA Board remains committed to that 100% funding requirement. The Board does not support legislation that negatively impacts the fund while the plan has unfunded liabilities, pursuant to their funding policy.
The Board’s funding policy and governance manual might help you better understand the Board’s philosophy, duties, and commitment to its funding goals:
https://www.copera.org/files/784b7b2fe/Governance+Manual.pdf
https://www.copera.org/files/7188968a9/fundingpolicy2015.pdf
Perhaps PERA’s political focus should be on the repeal of the WEP and GPO reductions. This would benefit many PERA personnel during retirement by increasing their SS benefits.
Social Security WEP can be periodically recalculated as Colorado PERA retirees’ purchasing power falls even further behind due to inflation, which will occasionally be in the double digits. The Federal Reserve has given up on its 2% target and will probably settle for 4% in the years ahead.
Some History… Colorado Rep. Pat Schroeder sponsored WEP in the early 1980’s. A large number of public school educators worked part time jobs, particularly the first ten to fifteen years in the profession and full time during Summer breaks to make ends meet. Many of us went from a full day of teaching to our part time jobs. The part time employment took out Social Security tax and were mailed annual benefits from Social Security, the amount of Social Security benefit we could anticipate on our retirement. Big surprise, “0” SS benefits! Thank you Pat Schroeder.
Frankly, PERA and its Board, its overpaid and inept management staff, the State of Colorado, its elected officials, and members of the House and Senate are worthless. How can any of you stand with a straight face and watch year after year the devastation caused by your poor planning, inept investment policies, and lack of corrective state supplemental funding as the reductions to PERA retirees’ promised pensions and their purchasing power are eaten away by inflation?
Now, rather than look at a clear increase to the cost of living adjustment for all retirees, you want to hide behind a woefully inadequate tax credit proposal that obviously does not treat all retirees equally or fairly. The State should replenish the funds stolen from our retirement fund through underfunding and poor management and implement a cost of living that matches the cost of living given to Social Security recipients. Period!
Many other States value their employees and pay into Social Security as well as a pension, and those employees can now live a moderately satisfactory life in their retirement. While here in Colorado, no individual Social Security, we are precluded from being part of our spouse’s Social Security, and we are saddled with a pension plan that lied to us. A plan that suspended cost of living raises in some past years and implemented reductions to our cost of living yearly adjustments to pitiful levels that are a joke.
Unfortunately, there is nothing we can do about it other than go back to work if we are faced with living only on our PERA pension.
Well said. I begged the board not to support COLA modifications. They won’t post my comments. We need to do something.
A significant COLA should be the number one issue for PERA.
AGREE! As far as what’s happened to retirees, i.e., we’ve been robbed.
However, as to what can be done? Retirees can relentlessly ride state legislators and the governor to stop the theft and provide a COLA. Additionally, despite little support from retirees a decade ago for a law suite (Justus v. PERA, which only lost due to a crooked state supreme court and plaintiffs’ inability to proceed further due to cost), another suite could be brought under the Fifth Amendment Takings Clause, by showing withheld PERA COLAs increase or sustain general revenues which finance non-pension aspects of government and/or are refunded under TABOR to non-PERA members (and at the exclusion of many PERA members residing out of state). Furthermore, retirees can attend political party functions as gadflies and get in the face of politicians and challenge them in primaries.
In closing, please don’t feel like there is nothing retirees can do about this theft… contact the state attorney general and the Denver D.A. and file nuisance complaints (asleep at the wheel law enforcement entities may wrongly call them nuisance complaints; but raiding PERA is really elder abuse, wage theft, and government racketeering; and these so-called law enforcement officers are actually co-conspirators by failing to act).
As for the pap that the Pension Review committee is peddling, they’re part of the problem just like the Trustees and most of the workers at PERA.
As far as what’s happened to retirees… We’ve been robbed!
However, as to what can be done? Retirees can relentlessly ride state legislators and the governor to stop the theft and provide a COLA. Additionally, despite little support from retirees a decade ago for a law suit (Justus v. PERA, which only lost due to a crooked state supreme court and plaintiffs’ inability to proceed further due to cost), another suit could be brought under the Fifth Amendment Takings Clause, by showing withheld PERA COLAs increase or sustain general revenues which finance non-pension aspects of government and/or are refunded under TABOR to non-PERA members (and at the exclusion of many PERA members residing out of state). Furthermore, retirees can attend political party functions as gadflies and get in the face of politicians and challenge them in primaries.
In closing, please don’t feel like there is nothing retirees can do about this theft… contact the state attorney general and the Denver D.A. and file nuisance complaints (asleep at the wheel law enforcement entities may wrongly call them nuisance complaints; but raiding PERA is really elder abuse, wage theft, and government racketeering; and these so-called law enforcement officers are actually co-conspirators by failing to act).
As for the pap that the Pension Review committee is peddling, they’re part of the problem just like the Trustees and most of the workers at PERA.
Agree with all–retirees HAVE been robbed! When I hear Social Security recipients complaining about a 3% COLA, I think–IF ONLY we had that! The COLA cuts were done on the backs of retirees. When I first retired with 33+ years with the State, I worked for over 10 additional years outside PERA, but now health and age prevent me from doing that. The ridiculous 1% doesn’t cover anything under the current inflation. PERA won’t be fully funded until after I’m DEAD– and why should my years of service fund future generations when they only have a sense of entitlement about everything anyway. I worked my rear off for every penny I earned, put myself through school for my AS & BA degrees while working to pay for it. Today’s kids think it should be handed to them–NOT ON MY RETIREMENT!!
And the $700–who came up with that figure, and though I live in Colorado, why on earth should out-of-state retirees be excluded just because they maybe moved somewhere for less taxes and a lower cost of living–or whatever their reasons? At one time I was proud to say I was a State Employee–NOT ANYMORE!! Now I’m ashamed to admit it & encourage everyone thinking of going to work for the State of Colorado to THINK AGAIN!
Don’t Hold Your Breath Waiting for the State to Keep Its Promises:
I doubt the Pension Review Committe will provide retirees a fair COLA, as too many lawmakers only care about campaign donations and diverting attention away from the ongoing theft of pension funds to bankroll state government and feather their nests. Never take PERA Board & Staff (PERA B.S.) or a politician at their word, demand they prove all claims they make, e.g., that pension funds need to be funded at 100% in 30 years (or 120% in 25 years), or there’s no money to pay actuarily required employer contributions or to pay COLAs (despite returning billions of dollars in TABOR refunds), and that the worth of PERA’s portfolio can actually be discerned from market valuations on just the last day of each year (to predict PERA’s worth and liabilities in 2048, that deny increases now?!).
Politicians, with the help of PERA B.S., are destroying Colorado’s merit based civil service system, to the delight of contractors (peddling privatization or pie-in-the-sky computer programs with Artificial Intelligence?), just as they’re inching towards not paying any retirement at all, or at least increases (starting by replacing Defined Benefit plans with Defined Contribution plans).
The majority of Colorado’s citizens will get fewer public services; or the delivery of those services will be less competent; and taxes will increase, but please call higher payroll deductions and Lexus Lane Tolls, “contributions or fees.” Also start referring to increased local property levies as “Bond Obligations.” The last act of many a public servant may be the cautionary tale in letting politicians get away with raiding pension funds, as it emboldens them to steal from others, until no one’s left to help the last blissfully silent group.
Don’t hold your breath waiting for politicians to honor promises, and don’t hold your tongue if you encounter one of the elected deadbeats raiding PERA!