Retirement insights from a Colorado PERA perspective

Legislation & Governance

Polis Budget Plan Includes PERA Direct Distribution

Photo credit: ChrisBoswell – 636911744- Getty Images

Gov. Jared Polis included PERA’s direct distribution in his 2021 state budget proposal.

The state legislature passed a bill in 2020 suspending the $225 million payment for one year due to historic revenue shortfalls and consequential budget cuts. PERA On The Issues has covered the 2020 suspension in depth in previous articles.

It’s up to the state legislature to ultimately create and pass a budget, but the governor’s budget proposal helps get the budget conversation underway.

Direct Distribution – a Summary

The landmark SB 18-200 included a number of changes that work in concert to bring PERA to full funding. The direct distribution was one of these changes. In short, it is a $225 million annual payment from the state. Every dollar goes toward paying off PERA’s unfunded liability.

This payment was more than a commitment of budget writers in 2018. The direct distribution was written into statute, to occur every year until all unfunded actuarial accrued liabilities from all divisions of PERA are eliminated.

2020 Crisis

The global pandemic led to a precipitous drop in state revenue. Billions of dollars of expected income vanished. The Joint Budget Committee (JBC), the bipartisan group of senators and representatives who write the state budget, faced an unenviable task: reducing or eliminating a large number of previously budgeted items in order to balance the budget. The direct distribution was one of many emergency cuts.

2021 Budget Process

We won’t know what next year’s budget will look like for a while. Typically, the JBC releases their budget in late March or early April. However the process of creating the budget takes months.

The governor’s budget plan is one of the first waypoints of this process. While the governor does not write the budget, he can signal priorities via this plan. Restoring the direct distribution is a key part of his proposal, which he released on November 2.

Next Steps

The status of the direct distribution won’t be official until the state legislature passes a budget next year. However, learning about the priorities of everyone involved in the budget process, like the governor, can bring some focus to an otherwise hazy picture.

Another opportunity to gain clarity is when the state releases its revenue forecasts periodically. Revenue forecasts supply JBC members with crucial information about how much money they can expect to work with.

Remember, these forecasts are estimates and can change over time. But they are important in setting expectations as the JBC does their work.

“The September revenue forecast painted a slightly less grim picture of the state’s revenue situation as the economy continues to rebound,” said Michael Steppat, PERA’s Public and Government Relations Manager. “But all eyes will be on the upcoming December forecast as state and local leaders ponder the best response to currently surging COVID cases across the state.”

PERA On The Issues will continue following the budgeting process and post updates as they occur.

Editor’s note: this story was updated on 11/11 for clarity.

Comments

  1. Michael Derou says:

    Since the direct distribution from the state to PERA is in statute, when did the legislature change that statute? I was not aware that the governor has the power to change legal statutes.

  2. Brenda ODonnell says:

    This is BS! PERA has always done well with the stock market and it is doing well. What about the tax Colo. Gets from weed and lottery sales? Whose pockets are all of these going to? Don’t play with retirees monthly income!

  3. David S Prok says:

    With cut-backs in teaching staffs and employees at all levels, and with the remote learning strategy, seems less contributions to PERA…is this a for-warning that retirees will have reductions? I used to say NEVER HAPPEN years ago, but uncertain today.

  4. chuck blood says:

    Can I just select the bills that I choose not to pay based on the fact that I don’t have the money? How can our Governor do this? Please remind this of this action when he is up for re-election.

    • PERA On The Issues says:

      Hi Chuck,
      Just to clarify, the plan Governor Polis put forward does indeed include the direct distribution in next year’s proposed budget. The state legislature passed a law to suspend it for one year during this year’s legislative session as part of billions in emergency spending reductions. The governor’s plan is document that outlines priorities more than anything; the actual state budget is created the state legislature.

    • Mike says:

      As I said to another poster…

      “The bill was sponsored by 2 house republicans yet not shot down nor revised (nor, to my knowledge, even argued in the house) by the democratic majority and then, of course, signed into law by the democratic governor……..I guess the stereotype about Dems being pro-education/educators is true…….until it’s conveniently NOT.”

      And I’ll add: Once again, educators taking on the financial burden. Good luck seeing PERA reach fully funded status when the profession has been and still is facing an increasing teacher shortage……courtesy of (in no particular order) Covid, terrible compensation (unless you’re an administrator), mismanagement of funds by school districts and, of course, politicians.
      — This is not an exhaustive list of reasons. What a joke!

      • Jann Todd says:

        So how much did our dictator pay the republicans to bring up this cut to PERA? Or are the democrats in republican name? Polis put it in his budget process so he’s at fault.

    • Martha Dancy says:

      The governor does things that he gets away with. We are allowing him to get away with it. People have to fight more. If we sit by and coddle these leaders, why, they will do more unfortunate things. Look at the country today and see the truth as to what is happening and what no one has the courage to do anything about.

    • Jann Todd says:

      Don’t wait for the next election to get rid of Polis. Help impeach him now. That would send a message to the next governor and the idiots in Denver that are taking our money from us.

  5. Linda says:

    What does this mean to recipients of PERA?

  6. Timothy Webster says:

    I’m contemplating taking my money and moving to a Red State, Election choices have consequences, don’t expect any changes till Colorado embraces fiscal responsibility!

    • David Hood says:

      Remember Mr. Webster, Bill Owen’s, Republican Governor 98-2006 gut PERA and we went almost broke to where PERA allowed the purchase of years in 99 to help fill the gap. .THEN PERA forgave the loan and now here we are. So move to Red, nobody cares.

    • Mike says:

      Let’s be clear….both parties are at fault for the $225 mil waiver of contribution to Pera. The bill was sponsored by 2 house republicans yet not shot down nor revised (nor, to my knowledge, even argued in the house) by the democratic majority and then, of course, signed into law by the democratic governor……..I guess the stereotype about Dems being pro-education/educators is true…….until it’s conveniently not.

  7. Jim Gates says:

    This fiasco only deepens my vote of no confidence in this rich playboy governor who cannot relate to the common person. The public deserves what they voted for, a gutless wimp afraid to tackle tough issues.

    • Martha Dancy says:

      This governor must be impeached. He is no good when he sits in his castle and gets paid big checks and yet wants to deprive others who make less money. That does not go in my book. Refuse to listen to this guy and get him out and get someone who cares about others like the Florida governor does. He passes a bill to protect people from looters. I say he is a good governor. All this guy does is to use the virus to put businesses out of work while he gets paid lots of money to sit in his big pretty house.

  8. Dr. Lou De Carolis says:

    Is this a warning flag on Veterans Day that – “get ready Pera members, you are going to take another hit”? I believe so! Colorado Public service retirees seem to be an easy target for this Administration. How about cutting so many other state costs; travel, vehicle maintenance, legislative staff & legislators salary & benefits, Governor salary, capitol staff salary & benefits, cut days of work for state administrative staff, etc. Put the state budget up for public cutting & trimming. Sell superfluous state owned property & goods. Don’t touch Law enforcement at all.
    How do you expect retirees who signed on with a contract for retirement to continually get cut and have any faith in Colorado Government. Retirement benefits should be hands off. Next thing to be cut will be health benefits to retirees.

    • Mike Langdon says:

      Well put…but why would this administration want to or give any consideration to cut or reduce their cash cow??? From their balconies over looking the vast number of laborers who are obliged to do menial work “Let them eat cake or ice cream” if you are from California!!

    • Me says:

      I think they should take half of the governor wage to help pay the people who need help and they are all supposed to be working for us why can they take our hard earned money and keep it or pay their own bills we need to make them give us their money

    • Loretta Cullum says:

      Not to mention hitting seniors with taking away homestead act, then announcing 24 hour security for a fiber optic tree and ads to get people to visit Denver during a fake China Virus episode.

  9. susan weckbaugh says:

    Just talked with a woman at PERA who said this article was VERY clear ( then there’s this bridge I wanna sell you in Brooklyn) that PERA checks will not be affected. Told her that should have been the first line of the article and that in the future, cut the legalese and break it down for us poor slobs that got immediately worried.

  10. Danny Ackerman says:

    Sounds like a bunch of mumbo/jumbo bs which interpreted means……..we are screwed…..if not now then later!

  11. Mike Langdon says:

    WOW…this is going to be interesting…the election awarded a former governor, who was as crooked as Al Capone, a senate position that he didn’t want!! The election of Polis, when his promises of all day kindergarten and at that time had no idea how it would be funded and all of his executive orders, should have been a signal but the sheeple here in Colorado, all of us educators who blindly followed our local unions telling us how to vote, let it all pass. Now when the S_ _ _ _ about to hit the fan, it’s panic time. When will we ever learn? It’s not a worry to those (Polis, Hickenlooper and the rest of the wealthy political elite who expanded their wealth exponentially while in office) where money, retirement, and a state funded, seperate, comprehensive medical plan awaits them. When will ever learn??

    • Judith Johnson says:

      We will all reap what those who voted without thinking, sowed. You are correct in thinking those in positions of power have the wealth already, so it’s no skin off their backs what they take from the public workers in their state. It’s hard to understand how we all heard a man say he didn’t want the job and he didn’t think he would be very good at it, and yet 50% of the people voted him in. I don’t believe he ever even said he was sorry he committed crimes against the state and charged us thousands to defend him. As for Polis, can he just ignore a statute? Sounds like there are a lot of Congress people and administrators, including himself, that have the money to fill in what he takes from PERA. I wonder if he’s as generous as our President to work for four years without taking his salary for himself? The law (which Congress wrote for themselves), says they must get a salary and an automatic raise every year, but if they all declined to keep it, even for a month, I bet that would make up the difference Polis is taking from PERA, the people that can’t afford to take a pay cut. Who knows, maybe Colorado will think a little smarter the next time we go to vote.

      • Mike says:

        Let’s be clear…Both parties are at fault for taking the $225 mil from Pera. The bill was sponsored by 2 house republicans yet not shot down nor revised (nor, to my knowledge, even argued in the house) by the democratic majority and then, of course, signed into law by the democratic governor……..I guess the stereotype about Dems being pro-education/educators is true…….until it’s conveniently not.

  12. Dan MacIver says:

    Does this mean that all aspects of Senate Bill 18-200 are rescinded? This bill was sold as a way to share the burden of bringing PERA to full funding amongst the state, school districts and PERA members. Non-retired PERA members were asked to pay more from their salaries and retired members were asked to take no COLA increases or reduced increases. School districts were asked to contribute more as well. The direct responsibility of the state was to contribute $225 million per year until PERA achieved full funding. It only seems fair that if the state is able to renegade on its part of SB 18-200, then the rest of us should be able to as well.

  13. Steve Carney says:

    Have you heard of any system that robs from the “poor” and gives to the “rich”? Perhaps teachers and others with PERA could become the “poor” giving unwillingly to the numerous others now that one party is just about to make fiscal decisions.

    • Martha Dancy says:

      Yeah, and that party is going further and further to the left. Can’t you tell that these people are leftists and want to take over everyone and rule like communists? They need to be put out of office and made to work like the rest of us. Then they may be better people. Power corrupts and complete power corrupts completely. Stick to the constitution and the way our government has worked before.

    • GM SANTO says:

      Yes, there is a system that intentionally maintains an underclass in order to enrich themselves… IT’S CALLED CAPITALISM!

      The so-called Democrats in Colorado became beholden to the same special interests that run the Republican party, starting with Romer. Unbelievably, some folks (see the first reply you received) think those lefty-Democrats will turn America into a Communist state and take away their Social Security and Medicare!? Thank goodness for Bernie and AOC and the left wing of the DINO party… for understanding what Socialism is, along with the rule of law… and that they may actually protect Social Security and Medicare.

      Don’t get me wrong, I’m resigned to co-exist with democratic-capitalism, that restrains run-a-way markets with a minimum amount of consumer protections. After all, those markets are the only thing keeping PERA funded despite the legislature robbing our pension funds… too bad the contract we entered into for a 3.5% annual increases wasn’t as rigorously defended as tax cuts for the rich and corporate welfare for businesses.

  14. Margret Wadsworth says:

    Thanks to the Windfall Elimination provision, we former state employees who also worked under Social Security have our SSA benefits cut, the “logic” being that retirement benefits are not meant to bring our monthly incomes up to anything like the full SSA benefits for which we worked. For someone in an executive position, this isn’t much of a problem. For those of us who were just rank and file state employees who had also “accrued” non-PERA retirement benefits in non-PERA employment are already living on problematic decreased incomes. The Windfall Elimination provision was a bad idea from its inception. The idea of potentially cutting deeper into PERA retirement funds when too many of us are already taking significant hits due to Windfall Elimination is obscene. Some of us have total aggregate monthly incomes through PERA and SSA that are less than the total monthly income of someone receiving an Old Age Pension through the State.

    • S. Shipley says:

      and don’t forget> we not only DON’T GET our SOCIAL SECURITY THAT WE PAID INTO from working other jobs… WE ALSO DON’T GET ONE SINGLE PENNY OF OUR SPOUSE’S SOCIAL SECURITY IF THEY ARE DECEASED. BIGGEST RIP OFF EVER!!! Oh yes, I’m a retired Colorado teacher who has been substituting for 10 years to try and make ends meet!

      • Jerilyn Hall says:

        So true! I have to make up the difference between what I get from S.S. And what my Medicare payment is. I have thousands in S.S. , but only get $110.00 a month and S.S. keeps that and then bills me for the difference. So wrong!!

    • GM SANTO says:

      I agree with you wholeheartedly… remember this when candidates for the US Congress ask for your vote and support… ASK THEM WHERE’S MY SOCIAL SECURITY YOU KEEP STEALING FROM ME?!

  15. Heidi. Chambers says:

    So someone explain to me what the hell is going on? Are our pension checks going to stop? Are we losing our pension and health care? If so its time to let the fat cats take the hit, starting with this Governor and all those below him!

    • Tom says:

      Heidi,
      What the lack of state contribution to PERA means is that PERA will not last as long as it should. The state unilaterally decided it didn’t have the money to pay PERA as promised this year due to COVID expenses. Whether a democrat or republican is at fault is irrelevant–it’s a virus. Whoever would be in charge likely would have made the same decision–there was no other choice. There is no immediate effect, other than employee and retiree promises for their “shared sacrifice” are still in effect. Our partner has deserted us, and I doubt the state will ever have the money to hold up its end of the bargain in the near future. The taxpayer mantra is to starve the state.

      • Glenn says:

        When working for the State of Colorado state employees did not have a choice we had to pay into PERA. It did not matter if we were going thru financial problems we had to pay in. We were told what we would receive in return when we retired. Just before retirement and after we have been lied to, and the benefits we were told we would receive have been reduced. Truly the State of Colorado does not honor their promises.

  16. Jim Lipscomb says:

    I just sent an email to Governor Polis thanking him for including the direct distribution in his 2021 budget request based on the article above, and asking him to work to ensure that this item is included in the final state budget. Then I read the comments. Do you people not understand how the budget process works? Do you not understand that COVID and the voter-passed income tax cut will result in another significant revenue shortfall this year? We will need to work hard together to try to get the direct distribution restored for the state’s 2021 budget.

  17. Charles Raisch says:

    What I see is that the Governor is trying to include the promised dollars to the fund that we draw from. The state has lost a lot of income and needs to look at ways to balance the budget. Polis is providing leadership. I have suffered from the changes in the annual increases since 2008 because of underfunded balances. My family is receiving 28% less income each year because PERA couldn’t meet their obligations. Thanks to Hickenlooper and the legislature an effort is being made to support retirees. cut this RED BLUE crap. It all falls back to the recession brought on by poor banking practices. Covid has caused an interruption. Belly up folks, this is not RED or BLUE its because many people can’t protect others by wearing a mask and still complain that they have a right to do what they want. PERA and the ;leadership are in there fighting for you. Do what you can to help others!

    • GM SANTO says:

      I wish I could see how PERA B. S. (the board having been gutted by law changes over the years to make them mostly gubernatorial appointees) does anything but work on how far they can go to pick my pocket. I do agree it is NOT a red or blue thing… It’s simple greed by the Wall Street and 17th Street puppet masters pulling the strings of nearly all the Republicans and too many of the Democrats. If those yellow belly crooks convene under the gold dome, I would hope PERA members would devise caravans to protest against stealing from retirees… while the Denver Post and typical conservative main stream media portrays state employees as PERA-sites (boycott anyone?).

    • Denise Howard says:

      Your comment makes me believe you think it is appropriate to cut retirees wages that they earned and were promised to them. Why do you feel this way? Your attitude doesn’t seem fair to me.

  18. GM SANTO says:

    THIS IS NOT GOOD NEWS!

    PERA On The Issues (POTI, pronounced potty?), is aptly named… coming from PERA Board & Staff (PERA B.S.). These feel good stories are just spin (on the knife in every retiree’s back).

    Forget this “direct distribution” story, like we’re supposed to grovel at the feet of our master for crumbs… PERA members MUST keep voting against all tax increases and bond issues in the state of Colorado until Polis and the other Pols. get the message they need to pay up on what was already promised!

    Dr. Carolis’ above comments start to get to the heart of the matter to which I would add two observations: 1.) Maybe there’d be more money for the COLAs that were stolen from us if PERA B.S. spent less on secret investment management fees & 2.) Look at the increases in the PRE-medicare PERA-care health premiums… and for some pretty lousy plans.

    In closing, the mortality tables won’t be adjusted to show a surplus in funds when a disproportionate number of retirees (compared to seniors with decent retirement and health care plans) die from Covid… instead the Pols. (both Democrats and Republicans) will rub their hands and mutter, “Excellent.”

    The direct distribution is a day late dollar short diversion to try to distract PERA members from the pension heist that’s been going on since Ritter signed the Democrats’ Senate Bill-001 in 2010. We maybe old but we haven’t forgotten who’s done this to all of us!

  19. Roxana says:

    I hope the Governor will stand by his stance to fulfill this obligation to PERA. This is how the State of Colorado has underfunded PERA in previous downturns and then the conservative legislators use it as proof that PERA is non-sustainable. We suffered in previous downturns and State so-called fiscal “emergencies” and I can understand drastic measures in 2020 but funds from the Federal stimulus should be going to make this up for PERA. Retirees and active employees have continually carried the financial burdens for the efforts to reduce the unfunded liabilities. We should not have to lose again just so some future administration can argue we need to terminate PERA.

    • GM SANTO says:

      Right On, Roxana!

      The banks were bailed out after the Great Recession by the Democrats and retirees were robbed! The economy recovered and the Republicans pushed through a tax cut for the rich, while retirees haven’t seen reasonable COLAs in a decade!

      Now, big business gets helicopter money under the CARES Act’s Paycheck Protect Program and state pension funds (that are only in trouble because state governments steal from them) are once again fighting to only receive what has been owed them for decades!

      It’s time to call B@ll Sh#t on those who only know how to raid the pension fund and steal from retirees with bogus claims about PERA’s overly generous benefits and that it’s okay for the state to be a dead beat and stiff retirees in order to keep Colorado’s corporate welfare gravy train rolling along.

      • mike says:

        For the record, it wasn’t the Dems bailing out banks.

        “The Emergency Economic Stabilization Act of 2008, often called the “bank bailout of 2008,” was proposed by Treasury Secretary Henry Paulson, passed by the 110th United States Congress, and signed into law by President George W. Bush” — a Republican

    • Steve says:

      Roxanna, From what I remember of stimulus funding by the fed Republicans side said they rejected a stimulus package over fear it was going to be shoring up mishandled retirement accounts in individual states. I believe it was openly stated on the national news! I don’t have much trust in our current govenor due to pass experiences from 25 years ago in education. Since the 2009 housing crash, Colorado has had a hard time balancing its budget! Just look at the state buy down formula that shorted many school budgets by millions! Education is always a punch boy when it comes to cuts and its bi-partisan. We can only hope that the vaccine will help remedy things and bring us back on revenue avenues that will backfill our shortfalls and budgets. I shutter at the fact that some still would like to exterminate PERA and I have almost 31 years of paying into it!

  20. E. Edstrom says:

    Does this just mean that the $225M payment be extended an additional year in the future until it is fully finded? i.e. instead of the last payment being in 30 years the last payment will be in 31 years.

  21. Mike says:

    Because it is and always will be politics driven. Where u been?

  22. Anne Cain says:

    You are so right, Jim. We are all in this together but most of those letters sounded to my leftie brain as though they came from MAGA folks. Geez…..

  23. Loretta Cullum says:

    Really, but the SOB can have 24 hour protection for a fiber optic tree and be very instrumental in loss of jobs because of China virus while he hides in his hidey hole in Boulder while his supporters destroy Capital Building, , memorials and governors mansion..

  24. Dianna Browder Jordan says:

    Does this mean you are planning to take my retirement that I live on, away from me?
    Do I need a lawyer?

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