I read with interest the editorial calling for a pension commission ("Pension reform panel sorely needed," P&I, May 14). Because I like what Australia has accomplished to date, I would hope the commission you call for could have a similar successful outcome.
I would urge you to read Colorado Senate Bill 200 approved by the Legislature last month. (EDITOR'S NOTE: Colorado Senate Bill 200 was signed into law on June 4.) A "guardrail" was built into it to prevent funding lapses that take the Colorado Public Employees' Retirement Association "off the road."
Called an "auto adjust," going forward it will automatically adjust both employer and employee contributions, as well as the retiree cost-of-living adjustment if the plan funding results in under/overfunding using a 30-year amortization period. The auto adjust kicks in automatically WITHOUT any legislative action required. This should help reduce the level of politics involved when legislation is required.
This is I believe the first such piece of legislature affecting public pensions in the U.S. Regardless, it should enhance the level of funding of Colorado PERA in the future.
Lynn E. Turner is a former SEC chief accountant and COPERA board member. This content represents the views of the author.)