The Associated Press reported that the approval by the Senate Finance Committee came after warnings that the Public Employees Retirement Association (PERA) could run out of money in 20 years if no changes are made.
The bill increases contributions from employers by 1.5%, contributions from
employees by 2.5%, and reduces cost of living increases from 3.5% to 2%. The
bill also provides a one-year cost of living “timeout”, tied to inflation, to
give the fund time to recover.
The average retirement age would be raised to 58 with 30 years of service.
The deal captured in Senate Bill 1 was brokered by Senate President Brandon Shaffer and Senate Minority Leader Josh Penry who both said they had a responsibility to make sure PERA could continue meeting its benefit obligations, according to the news service.
The measure had the backing of school executives, unions and many retirees who told lawmakers they realize the dire consequences of not reaching a compromise. Meredith Williams, PERA’s executive director, said the PERA board supports the compromise because it shares responsibility for fixing the problem, provides long-term stability, preserves a defined benefit plan, and affects each retirement group equally, the AP reported (see Colorado PERA Backs Pension Fix).
About 450,000 teachers, police officers, park rangers, and other state employees are covered by the plan.