A bill to issue pension obligations bonds for the $45 billion Colorado Public Employees' Retirement Association, Denver, is dead after it failed to clear both chambers before the legislative session ended.
HB 15-1388 was postponed indefinitely by the Senate Finance Committee on Tuesday, a day before the legislative session ended.
The measure was expected to increase PERA's funding ratio in the near term and improve upon 2010 legislation by reducing the amount of time required for PERA to reach full funding. It passed the House by a 45-19 vote on May 1.
Under the bond issuance, the funding ratios for PERA's state and schools divisions, its two largest employee groups, were expected to improve to 70% to 80%, from their current 62%. Additionally, it was expected to “reduce the amortization period in the state and school divisions by as many as five years, saving employers $4.5 billion in today's inflation-adjusted dollars,” said a statement on PERA's website.
No firm dollar amount had been established for the bonds, although a PERA spokeswoman said it could have been as high as $10 billion. The bonds would have been issued by the Colorado Housing and Finance Authority and paid for by current employer and employee contributions into PERA.
“Reform legislation enacted in 2010 (SB1) continues to work and ensures PERA remains sustainable for the long haul. The structure of the bond proposal in House Bill 15-1388 would have further strengthened the reforms implemented by SB 1 at no new cost to anyone. PERA appreciates the robust conversation on this topic that built a solid foundation for future discussion,” PERA spokeswoman Katie Kaufmanis said in an e-mail after the Senate Finance Committee vote.