The Colorado Public Employee Retirement Association (PERA) has underfunded liabilities of almost $10 billion, according to Coffman. Although the next 30 to 40 years should see pensioners receiving their benefits retirement, the same can not be said unless something changes, he asserted in a press release .
To do so, he has appointed an eight-member Treasurer’s Commission to Strengthen and Secure PERA, co-chaired by former Governor Dick Lamm and retired US Senator Hank Brown, according to the Pueblo Chieftain.
“Under current conditions, there is no foreseeable time when PERA will return to a fully funded status,” Coffman told the Chieftain. “To address this vital program’s long-term problems, I’ve determined that outside action has to be taken to restore the program’s financial stability, to protect the interests of the state’s taxpayers and to provide financial security to PERA’s members.”
The commission has been asked to:
- evaluate the financial, structural and legal problems involved with making changes to the program
- develop an actuarially sound proposal for bringing the program into compliance with state law mandating a maximum amortization schedule
- develop recommendations to strengthen and improve PERA’s governance structure
- develop a mechanism that gives the PERA board and the Colorado Legislature the ability to make changes to PERA as needed.
Recently, the State Auditor’s office recommended that action be taken by the association to fix the underfunding problem, according to the Chieftain. “Under PERA’s current actuarial assumptions, none of the (three PERA) divisions are expected to receive sufficient contributions and earnings to fund all the benefits that PERA is obligated to pay,” the audit said. The audit also said that PERA was violating a state law that required a maximum 40-year amortization schedule to ensure benefits can be paid, the Chieftain reported.
PERA provides retirement benefits for 170,000 state, local government and school employees.