Legislation to raise contributions to the $29.5 billion Colorado Public Employees’ Retirement Association, Denver, is awaiting Gov. Bill Ritter’s signature after passing the state House today by a 36-29 vote.
Mr. Ritter has 10 days to act on the bill, which the Colorado Senate approved Feb. 1 in a 25-10 vote and the state House left unchanged.
The bill would increase contributions from school district employers by 1.5% of payroll and contributions from school district employees by 2.5% of salary. All other state employers that are members of PERA would pay another 2% of payroll, while their employees would pay an additional 2% of their salaries.
Also, the retirement age for all state employees hired after Jan. 1, 2011, other than school district workers would increase to 60 from 55. It also would require employees to complete at least 30 years of service instead of 25 before being eligible for full retirement benefits.
The new retirement age for school district employees would be raised to 58 from 50 for those hired by Dec. 31, 2016, or 55 for new hires on or after Jan. 1, 2017, and they would have to have at least 30 years of service.
All PERA members that retire at the current younger ages would receive reduced benefits. Also, cost-of-living increases would be reduced to 2% in 2001, from 3.5%, with no increase this year.
PERA’s assets fell from $41.4 billion in December 2007 to $29.5 billion in July 2009 because of the economic crisis and stock market downturn, according to a July 2009 report to the Legislative Audit Committee. As a result, PERA faces $27.5 billion in unfunded liabilities, the report stated.
Joanne Wojcik is senior editor at Business Insurance, a sister publication of Pensions & Investments.