PERA seeks legislation to push the next auto-adjust to 2044

By Brian Eason | The Colorado Sun

State pension officials plan to ask lawmakers to relax some provisions of Senate Bill 200 in order to provide financial relief to PERA’s members.

For the first time since the state pension’s finances cratered in the early 2000s, the Colorado Public Employees’ Retirement Association is putting together a legislative proposal to bring some relief to its beleaguered members.

At the pension board’s annual retreat in Colorado Springs earlier this month, pension officials offered a number of ideas to prevent — or at least delay — another round of automatic adjustments to the system’s finances.

If the legislature agrees, the changes could spare retirees from additional cuts to their monthly pension checks, and stave off even higher payroll deductions from public worker salaries.

PERA is also considering reducing contribution rates for local governments and the judicial branch, both of which are in much better financial shape than the system as a whole. And, if the pension’s finances continue to improve, officials are modeling what it would cost to send bonus checks to retirees in good financial years.

The moves mark a shift for PERA after decades of belt-tightening. And to some critics, they’re a sign that the retirement system is finally taking the concerns of its 725,000 members into account, rather than focusing solely on improving its balance sheet.

Avoiding an auto-adjust

The automatic adjustment provision was a key pillar of Senate Bill 200, the 2018 pension overhaul that brought PERA back from the brink of insolvency.

The measure called for higher contributions from public workers and their employers, while reducing retiree cost-of-living adjustments so much that their pension checks now grow slower than inflation. It also triggered automatic benefit cuts and contribution hikes whenever the pension’s finances strayed too far from a 30-year path to full funding.

“When we talk to our stakeholder groups, our members and the legislature, all are united in not wanting another AAP (automatic adjustment),” Andrew Roth, PERA’s executive director, told The Colorado Sun in an interview.

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