Colorado Gov. John Hickenlooper proposed his own set of reforms to shore up the $43 billion Colorado Public Employees' Retirement Association, which include contribution increases for employees and reduced cost-of-living adjustments.
The governor's proposals, released Wednesday as part of his fiscal year 2018-2019 state budget request to the Colorado General Assembly, come a little more than a month after the Denver-based pension fund released its own set of reform recommendations. All proposals require the approval of the Colorado Legislature, which next convenes in January.
Under Mr. Hickenlooper's plan, employees would contribute an additional 2% of their salary, totaling 10% for most workers, starting in January 2019, and annual cost-of-living adjustments would be capped at 1.25%, from 2% now for most retirees, said a news release from the governor's office.
Employer contribution levels would not change.
In exchange for increased employee contributions, most state employees would see their salaries increase by 3%, starting on July 1.
As of Dec. 31, Colorado PERA faced $32.2 billion in unfunded liabilities, according to its most recent annual report.
In its own set of reform recommendations in September, the pension fund proposed raising the retirement age for most new hires; capping COLAs for current and future retirees at 1.5%; extending the waiting period to receive a COLA increase for current and future retirees; increasing employer contributions by 2 percentage points and employee contributions by 2 to 3 percentage points, starting in 2020; and introducing "an automatic mechanism" by which employer and employee contributions and COLA amounts would adjust based on the pension fund's financial condition.
Colorado PERA's plan is expected to reduce the pension fund's unfunded liabilities by $4.5 billion and bring the pension plan to full funding in 30 years.