PERA’s structure remains secure
As the recently inducted president of our local CSPERA group (Colorado State Public Employees Retirement Association), I am very interested in the mistaken views about our retirement system expressed in the Journal and in eastern slope newspapers.
However much the Denver media, the Koch brothers and major investment firms would like Colorado citizens to think otherwise, PERA’s structure remains secure.
As an Re-1 teacher paying into the plan and as a retiree, I’ve kept informed about the funding status of PERA and monitored the activities of the state legislature regarding the plan. I’ve also kept up with state and national efforts to “reorganize” PERA and other state retirement plans by changing them from defined benefit plans into defined contribution plans.
PERA “provides retirement and other benefits” to most of the public employees in our state, and it does function much like Social Security. The plan was established in 1931. During their working lives, covered public employees contribute a fixed amount (8 percent) of their salaries to the fund. Depending upon agreed salary packages, their employers (state, judicial, troopers, schools, etc.) also provide a percentage (right now averaging about 11.76%).
The fund is administered by a board composed of elected PERA members, the state treasurer and political appointees. This board makes the major management decisions about the fund’s investments. I’ve been associated with PERA since 1986. In that time, except for two events in the last 11 years, the fund has remained remarkably secure.
The first event was the 9/11 attacks on the Twin Towers and the Pentagon. Because of Al Qaida, U.S. stock markets suffered large financial losses. Along with many others, I lost fully one third of my non-PERA 401K savings.
The second event was the recent financial meltdown caused by the gross wrongdoings of our American financial institutions. Gone — another third to half of many Americans’ savings along with many thousands of American homes and jobs.
Neither of these downturns in financial markets was caused by PERA. Nor were the financial losses caused by fund management malfeasance. However, the PERA fund suffered losses like everyone else.
No one expects those losses to be recovered quickly. Senate Bill 1, our legislature’s fix, provided a model for other states that want their funds to remain stable. In 2010 Democrat Brandon Shaffer and Republican Josh Penry worked together with the PERA board, municipalities, current employees and retirees in a spirit of shared sacrifice. Their bipartisan efforts resulted in SB-1 which made changes requiring higher contribution rates, freezing cost of living increases, raising retirement ages, etc. If given time to work, these changes, supported by our local retirees’ organization, will recover the losses suffered between 2007 and 2011. In fact, the fund has recovered to the point that retirees will get a modest cost of living increase this year.
In the last few years, a mass media national assault on public retirement programs has swept the country. Some of the attacks are justified as some states and municipalities either did not set up their retirement systems well or abused them much like Congress has used the Social Security fund as a personal treasury.
That is not the case with the state of Colorado or PERA.
PERA does not have a “deep history of failure.” Nor have there been “taxpayer bailouts.”
Legislated with specific laws and rules, our system runs well. Unfortunately, Colorado citizens have been influenced by well-funded organizations, many from out of the state, that are salivating for control of PERA’s pretty large pie. In the 2012 session alone, nine bills were introduced involving major changes to the organization of the fund. Many of these changes would have hurt the stability of a system that, except for two national tragedies, would never have been weakened.
For a variety of reasons, all these bills were opposed by the PERA board, most PERA participants and those legislators who were responsibly doing the business of our state.
PERA members are actively involved in strengthening the PERA retirement system. Taxpayers can get accurate information about PERA from its website: copera.org.
Janet Chanay is a retired Re-1 educator and is president of the local CSPERA group.