According to an article on DenverPost.com, the funding gap in the pension plan grew by about $3 billion last year in spite of the fund posting a 14% return, beating its target 8.5%. The plan has a deficit of $12.8 billion and only has about 70% of assets needed to meet its obligations.
Market losses and increased benefits, along with pension accounting rules were cited as the reasons for the shortfall, according to DenverPost.com. Colorado PERA has considered increasing the amount of contributions employers make to the plan and have made efforts to reduce benefits, but those reductions were limited to future hires.
Colorado PERA manages about $32 billion and has more than 361,000 members.
Similar problems were reported by Minnesota’s PERA recently as legislation was passed to increase contributions by employers to its plans over the course of several years (See MN Passes Pension Bill to Get Fund Back in Line ).