The PERA Board of Trustees met on Friday, Nov. 17 for its final regular meeting of 2023.
Below are highlights of some of the major topics of discussion and important actions the Board took during the meeting.
2024 Board election
The Board approved the calendar for the 2024 Board election, during which four seats will be up for election: Two in the State Division, one in the School Division, and one in the Denver Public Schools Division.
Candidacy information will be available to members of those divisions in early January, and the election will take place in May.
Member contribution interest rate
Every PERA Defined Benefit Plan account accrues interest, compounded annually. If a PERA member leaves PERA-covered employment and requests a refund of their account, they receive their contributions, the interest earned on that balance, and any applicable employer match. If that member keeps their account with PERA, the balance will continue to accrue interest and the member has multiple options upon reaching retirement eligibility, including choosing a lifetime monthly benefit.
The Board is responsible for setting the interest rate every year; it currently stands at 3 percent. The Board’s policy, updated in 2020, evaluates the interest rate as a component of members’ overall retirement benefit. After discussing the issue, Trustees voted to keep the interest rate at 3 percent for 2024.
Asset/liability study update
In September, the Board kicked off an important analysis of PERA’s investment portfolio and asset allocation strategy known as an asset/liability study. The project will help the Board determine if it needs to make any changes to PERA’s mix of investments. PERA’s strategic asset allocation is the primary driver of investment returns, and the Board adopted its current allocation following the last asset/liability study in 2019.
The Board’s investment consultant, Aon, said in the meeting that it continues to work with PERA’s investment staff to gather and analyze information. That process will continue over the next few months, with additional discussion in January.
READ MORE: Asset/Liability Study: A Guide to Building a Strategic Portfolio
PERA-related legislation
With the 2024 General Assembly around the corner, the Trustees discussed the upcoming session and potential PERA-related legislation. The conversation included two bills that lawmakers on the Pension Review Commission expect to introduce: One that aims to expand the number of PERA retirees who can work for school districts without reductions in their benefits, and one that proposes a $700 tax credit for qualifying retirees in tax years 2024 and 2025.
READ MORE: Pension Review Commission Eyes Two Bills for 2024 Legislative Session
The Board’s first meeting of 2024 will take place on Jan. 19.
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.Asset allocationAn investor’s mix of stocks, bonds, and other investments. PERA’s strategic asset allocation is set by the PERA Board of Trustees.
THE BOARD SHOULD HAVE PROPOSED LEGISLATION FOR A FAIR COLA & AND STOP THE RAID ON PERA!
Raiding PERA Destroys Civil Service & Lack of a COLA is Ageist, Racist, Sexist, Anti-labor, Illegal, & Unpatriotic!
Not paying promised benefits, like a COLA (due to requiring funding levels to be at 120% of liabilities), is theft. PERA has been looted so long, that paying anything is testament to the success of having a collective investment-based retirement fund in the first place. However, one problem persists: Not business cycles or economic downturns, but “greed.” Politicians can’t keep their hands off others’ money! Indeed, eliminating COLAs is a TAX on PERA beneficiaries (a tax illegally imposed retroactively and unilaterally upon vested members, that’s applied unequally). Don’t believe those who say there’s no money for COLAs, they ignore the state’s failure to make actuarily required contributions (ARC). The reason for any shortfalls is the state shorting ARC to keep money in the General Fund!
Long-term investing provides good retirements; which without, public service careers are unrewarding (except for senior managers and political appointees exempt from civil service pay ranges, during recessions, or a sense of fulfillment for altruistic workers); but if not for promised retirements, the state couldn’t attract or retain a reliable or competent workforce. Sadly, the state won’t pay their workers their promised deferred compensation, and instead raids PERA because, to paraphrase Willie Sutton, “That’s where the money is.”
Governor Owens flipped offering a good pension on its head by getting more senior state workers to retire earlier than previously allowed, by lowering the cost to purchase service credit for non-covered PERA work. Flying in the face of acting as a tool for recruitment and retention, PERA was used to cull the workforce. Nevertheless, it still enriched state coffers, i.e., continued to keep Social Security contributions from going to Washington, with service credit purchases rolling into PERA so the state could lower their contribution rates, and reducing state payrolls (at least initially) to create state budget savings. Likewise, Owens undoubtedly wanted to dump employees hired under Democrat administrations to divert payroll savings to his cronies, and take credit for labor savings in the state budget. However, the state neither made appropriate employer contributions for long-term liabilities associated with the service credit fire-sale, nor for a drop from forty years to thirty years for an actuarially sound period to calculate liabilities under Governmental Accounting Standards Board (GASB) changes, adopted in 2006. Around the same time PERA paid for a short-lived employer match to defined contribution (DC) plans, administered by Great West, that benefited higher paid workers, rather than rank and file employees.
Despite any so-called “fiscal emergency,” the state won’t dissolve PERA in favor of mandatory FICA contributions to the feds; or only offer DC plans immediately; or pay increased salaries to lure new hires and keep current workers. Politicians welch on paying COLAs to maintain an illusion it’s only temporary and then blame TABOR for state revenues barely covering state commitments (while funding their own pet projects). The only reason there’s no COLA is because the state won’t raise taxes (or retain some TABOR refunds), although pensions are NOT subject to TABOR restrictions. Budgets and taxes reflect priorities, so it’s really a lack of leadership. Current and future public servants will see lawmakers break employment promises to retirees, after career decisions have been made, so they’ll demand higher pay for fear of also being subject to less favorable, retroactive, and unilaterally imposed pension cuts.
Raiding PERA extends beyond robbing the elderly and wage theft, it strikes at the heart of merit based civil service by debasing the main (if not only) perk of public service. Eroding PERA will ultimately harm citizens with a less competent civil service, reduction in public services, and more taxes to pay higher salaries. Additionally, given state veterans’ hiring preference, along with the state’s lead in Affirmative Action to address work discrimination, then reducing PERA benefits is unpatriotic and discriminatory! Plus, many rank-and-file positions filled during Colorado’s “bust years” by highly qualified folks means they’ve been defrauded, although fulfilling their part of the bargain in rendering service (even after the state’s economic recovery due to PERA’s golden handcuffs).
Isn’t it time for this long running raid on PERA to end and stop circumventing TABOR by balancing the state budget on the back of retirees? Otherwise, the state risks a lawsuit to stop defrauding taxpayers (especially PERA members).
P.S. – Read the TABOR Amendment, it requires using TABOR refunds for pension shortfalls, i.e., under TABOR’s General Provisions, Sec. 1, it states, “…When annual district revenue is less than annual payments on general obligation bonds, PENSIONS, and final court judgments, (4)(a) and (7) SHALL be suspended to provide for the deficiency.” (emphasis in caps added). What this means is that TABOR doesn’t limit PERA pension benefits, and not only have retirees been illegally deprived of a fair COLA, but current workers have been subject to higher payroll contributions than necessary! TABOR refunds have been financed by raiding PERA, which is exactly the opposite of what TABOR requires.
P.P.S. – If the state remotely cared about retirees, it would pay a reasonable COLA and stop wasting money on pre-Medicare PERAcare supplements (which haven’t increased in decades, but are just payoffs to the health care and insurance industries). Better-off retirees should pay their own health care, and let Obama-care do what it’s supposed to do for the rest, but stop catering to business lobbyists instead of retirees, who yes – are also taxpayers!
Anna,
You are so correct!!! It is all smoke and mirrors with Pera telling us how much they work for the STATE, I mean the employees. I found out when I signed up for Health Insurance this year that I can go to Blue Cross and Blue Shield as a private citizen and get the exact same coverage cheaper than I can through PERA even after their $500.00 credit. The insurance company told me that PERA doesn’t put a dime into your health insurance but get a group rate where they charge you $500.00 more only to say we are giving you a deal with a $500.00 discount. I would be better off if PERA gave me the $500.00 and I got my own Health Insurance that cost me nothing because of PERA. In fact, I was told to tell everyone who is with PERA to call and you to will see the truth. I had this same issue while I worked for the state with the Department of Public Safety doing the same thing. Well in the end Governor Owens fired Troy E** and the state offered better insurance.
Now PERA is giving us a 1% increase in 2024 pulling the same stunt with the smoke and mirrors. I tell everyone to pull out their money when they leave employment and put it in an annuity that will pay you a lot better than what PERA is offering you since they have the STATES best interest at heart!!!
I wish I would have been better when I left employment………
Anna and Brad – you are spot on with your analysis.
Yes I am thoroughly disgusted how I was lied to by the State Of Colorado on my retirement. If a private company did what they did with the pension, the politicians would be all up in arms. They would say that they have to abide by the contract, and that it was just greed by the company doing that.
Thank you Anna! Said very well!
Agree with all of you!! I loved my job(s) working with students and applicants in higher ed for nearly 35 years–but PERA and the Colo Legislature Could-Care-Less!! about the many of us who DID bust our a..es and DID our best to do quality work and DID care about the people we served!!
This asinine idiotic “reach full funding by 2048 TO FUND FUTURE RETIREES” ON THE BACKS OF CURRENT RETIREES” is NOT what I/WE worked for! Let FUTURE retirees take care of their own. I worked under the promise of a retirement that would take care of ME/OURS in return for years of hard work–NOT TO FUND FUTURE RETIREES!
I’m so Sick.And.Tired. of hearing the “reach full funding for the future” CRAP by PERA–it’s become their canned A.I. answer anytime anything is said about it. They simply do not care about us. PERIOD!
Oh—and look at how they informed us about Ron Baker’s firing–NOT! (Though Good Riddance!) It was through the Denver Post and Colo Sun that the story came out. PERA does Not keep us informed about anything that can or does affect retirees, but then if something is questioned, only canned standard “pre-approved” answers are given–such as the “future funding” crap!
Very interesting that currently when someone leaves before retirement they receive the 3% interest on the money they have put in, but retires who were promised a 3% COLA to reduced to 1% after putting their time. Somehow this does not seem fair after putting 30+ years toward retirement and their loyalty.
Janet,
I appreciate what you’re saying about the cash-out interest, and I think that’s set by statute (and hence would be the fault of the politicians who have robbed us blind!). However, the defined contribution (401 & 457) plans by Empower also rob PERA members, in that those of us in Empower’s conservative Capital Preservation Funds don’t even get 2% to park money! It is criminal that PERA contracts out to an entity with a conservative fund that pays half of what a money market account pays. Retirees and conservative investors with Empower are simply being fleeced, and neither PERA Board & Staff or lawmakers care.
Perhaps move from Empower’s Capital Preservation Fund to high yielding money market. Vanguard currently has a money market at 5.3% 7-day yield.
Thanks Mack,
Yes! I’m in the process of closing out (transferring) my PERA/Empower accounts to Vanguard… But two things: 1.) Empower offers non-PERA accounts at market rates (it’s just the PERA association which robs members in the DC plans with lower rates); & 2.) I’ve heard from others that you have to watch these jokers like a hawk when you transfer (100% rollover), because they cash you out and then act like it was your fault and that you requested a redemption (that’s taxable).
North America. In the United States, the Consumer Price Index rose 6.8% between November 2020 and November 2021, spurred by price increases for gasoline, food, and housing. Higher energy costs caused the inflation to rise further in 2022, reaching 9.1% and it is not much better in 2023.
Unless your happy with your 1% we Retirees need to stand up and Fire everyone on the PERA Board and get someone who has our best interest in mind….. DO NOT kid yourself it is all smoke and mirrors with PERA!!!
Brad,
As hard as it is to defend PERA Board & Staff (PERA B.S.), the real culprits are the legislators who passed SB10-001 and SB18-200, although PERA B.S. goes along with the puppets of lobbyists. Retirees need to relentlessly contact their legislators (remaining civil but asking, “Where’s our COLA,” and ask daily if necessary!). True, the gubernatorial appointments, plus the Denver Public School apparatchiks that were foisted on the rest of us, along with very aloof judicial division representatives (that shouldn’t even have representation outside of the state division), and of course that political hack, the state Treasurer, are the PERA Board members that have worked hand-in-glove with the legislature to rob us.
Forget PERA B.S. – Just hound lawmakers that if they can make TABOR refunds, then they can pay a fair COLA, and organize a legal defense fund to sue them!
It is all smoke and mirrors with Pera telling us how much they work for the STATE, I mean the employees. I found out when I signed up for Health Insurance this year that I can go to Blue Cross and Blue Shield as a private citizen and get the exact same coverage cheaper than I can through PERA even after their $500.00 Pre-Medicare credit. The insurance company told me that PERA doesn’t put a dime into your health insurance but get is getting a group rate where they charge you $500.00 more only to say PERA is giving you a deal with a $500.00 discount. I would be better off if PERA gave me the $500.00 and I got my own Health Insurance that cost me nothing because of PERA. In fact, I was told to tell everyone who is with PERA to call and you to will see the truth.
I had this same issue while I worked for the state with the Department of Public Safety doing the same thing when Owens was governor. Well in the end Governor Owens fired the state insurance guy,Troy E**, and the state offered better insurance.
Now PERA is giving us a 1% increase in 2024 pulling the same stunt with the smoke and mirrors. I tell everyone to pull out their money when they leave employment and put it in an annuity that will pay you a lot better than what PERA is offering you since they have the STATES best interest at heart!!!
I wish I would have been better when I left employment………
Just lost a rather lengthy reply by using the “Look Up” function on my phone. 😖
Anyway, good to see PERA Retirees waking up and beginning to realize how badly we’ve scammed by Colorado State Government.
It has to be illegal to promise retirees COLAs that will protect their retirement benefits from being effectively devoured by inflation only to turn around and renege on that promise and leave their former employees almost totally unprotected.
This edition also announces 4 board seats to be elected in May. The retirees from 2010 and after must find snd help elect candidates who have a firm grasp on the COLA crisis. We need board members to actively advocate for legislation to fix the damage done by having several years of negative COLA. ( That’s correct, ANY time a fiduciary management plan FAILS to provide for keeping purchasing power on an even pace with inflation, the fiduciary responsibilities have not been met). There is ONE question to be asked…. Which candidates will base their term on re-establishing the contractual agreement under which retirees from the 3.5% “guaranteed annual increase” made their decisions to retire ?! Legislation must be put before the house and senate, and strongly supported by PERA. We ALL know that the legislature could bring PERA to “ full funding” with the stroke of pen. The taxpayers are responsible for the deferred compensation of their public employees. It is madness to take money from the pensioners to pay their own pensions!!! The 2010 taking of fully vested pension money has brought us to this point.
Adjustments probably DID need to be made, for 2010 and beyond, but you NEVER take back contractual earnings retroactively!!!
This has to stop, and the change can start with new board members being elected.
Right on!
Mr. Thorpe’s comment (above) is spot on! Not only should retirees contact Board Chair, Mr. O’brien, and let him know this Board has acted contrary to the well-being of its members and violated their fiduciary duties, but that a COLA (a realistic and fair one) needs to be promulgated by PERA to the General Assembly!
Additionally, current working members need to be alerted to what is happening to their “deferred compensation,” and find candidates that represent them (and not from so-called state employee unions under the Governor’s control and who play ball with politicians that raid PERA).
Finally, active and inactive members, plus current beneficiaries, may need to form a legal defense against current PERA policies. This may be a last resort, but if membership doesn’t want to be treated as ‘sheeple,’ instead of with the degree of consideration expected from fiduciaries. I refer readers to a fbook page (The PERA SITE) and to contact this writer at handsoffmypera- at-hotmailDOTcom.
Spread the word among PERA members to get active and save their retirement and a state merit based civil service too!
I agree!
Colorado: A Conservative Testing Ground for Policies of Mass Destruction (for Democracy)
Not since the Robber Barons, the Ludlow massacre, and when the Klan ran the state in the 1920s, have the politicians in the square state been such a menace to the general population! Read Anna’s post at the top of these comments, and then realize it’s just the tip of the iceberg.
As a CU student in the 70’s, I remember when the right wing was comprised of one professor railing against communists, pro-Nixon & pro-Vietnam War types, and the Coors Klan (most of these folks meant well, except the rich ones but most of the fossil fuel money stayed down at School of Mines and lobbied from the Petroleum Club Building); but Bruce Benson changed that; and with Governor Owens, the Neo-Con-fornication of the state began. The cocaine covered halls in Boulder, ultimately produced the ilk of Barry Poulson, Timothy Tymkovich, and John Eastman, and joined forces with the wingnuts on the Western Slope and Colorado Springs, all of which culminated with petroleum drenched Owens’ as Eliza Doolittle to Dick Wadhams and Douglas Bruce as a two-headed Prof. Higgens.
The point of this stroll down memory lane (not unlike Anna’s brief history of raiding PERA), is to ask where were the “Democrats” during all of this, as well as offer a cautionary tale (resembling a dystopian Dickensian Christmas Carol with different ending than Tiny Tim’s exhortation for universal blessings). Based on sins of both commission and omission, the DINOs are: KC Becker, Degruy-Kennedy, Hickenlooper, Kerr, Polis, Ritter, Teacher Unions cabal, etc. (complete list available upon request, actually it would be easier to name the five Democrats and one Republican that didn’t sell out public servants this century); as for how the story ends – well the destruction of a merit based civil service in Colorado may be remembered as the model for Trumps’ Project 2025 (google it), in which case raiding PERA will supersede TABOR as a being the defining failure of Colorado’s state governance (through a similar process, although not on the same scale, as Hindenburg’s appeasement to Hitler in January of 1933).
Alas, this comment will likely be pearls before swine, or wasted breath trying to scare off lambs to the slaughter, but happy holidays.