Posted: Oct 20, 2009 8:16 PM by Andy Koen
Updated: Oct 20, 2009 8:16 PM
The state employee pension fund for has lost billions of dollars in bad investments during the economic downturn and in order to make it more stable in the future, the board of trustees is now asking workers to pay in more and push back their retirements.
Nearly half a million government employees in the state of Colorado draw a pension from or pay into the Public Employees Retirement Association (PERA) fund. Treasurer Cary Kennedy, who sits on the PERA board, says under the current economic forecast , "PERA would run out of money in about 25 years if we don't make some changes."
The changes she and the board are proposing include tying retiree payouts to inflation, increasing contributions from workers and employers, and raising the retirement age to 60 for all new hires.
"We want to make sure the fund is strong and stable for the long-term, really regardless of what happens in the market," Kennedy said.
At it's lowest point in the last 12 months, the PERA fund lost nearly 26 percent of its value. Kennedy says PERA fund managers are hampered by the fact that all changes have to be voted on by the legislature. So, to give them more flexibility, the board proposal also requests that PERA be allowed to adjust contributions and benefit payments with the market as needed.
"I think it's a very smart approach, we'll be one of the first states in the country to take this reform approach to the public pension system."
However, Kennedy and the board face a tough sell to PERA workers and retirees who would likely bring home less money during times of economic hardship as a result of the changes. They are meeting with shareholders through out the state to answer questions and gather input before the next legislative session.
There will be a meeting in Colorado Springs on Wednesday, November 4 from 6:00 - 8:00 p.m. at the Doubletree hotel, 1775 E. Cheyenne Mtn. Blvd.