Colorado State Treasurer Walker Stapleton marched into town recently and wowed people with faulty information and opinions concerning the state of the Public Employees’ Retirement Association. He lamented that PERA is actuarially underfunded – an opinion by someone not qualified to evaluate the issue, and one that ignores the recent efforts by the PERA board and the Legislature (Senate Bill 1) to change the system so it will become fully funded in the future.
These actuarial opinions are professional guesses about what the performance of the fund will be over a span of 30 years. The amount of actuarial overfunding or underfunding fluctuates over time.
The PERA board recommends policies, but the Legislature has the final say. In the mid-’90s the PERA fund actually was overfunded. So what did the Legislature do? Over the objections of the PERA board, it gave the “extra” money away – in the form of early-retirement perks, reduced cost for purchasing years of service and other policies. This giveaway set the stage for an even greater underfunding when the 2008 financial crisis hit. So now, when the fund technically is underfunded (but improving), Stapleton and others are screaming bloody murder that there’s not enough money in it.
Politicians, particularly those under the sway of the infamous Koch brothers’ conservative advocacy group, Americans For Prosperity, have attacked their state retirement systems nationwide. Their overall objective is to get states out of the business of providing for their various constituencies – their employees (privatize their retirement plans), students (replace public education with a network of charter schools), even their prisoners (farm them out to privately run prisons). We should be suspicious of their motives.
Recall that PERA was created before Social Security. Also, PERA retirees receive no Social Security benefits (from their PERA-related employment). Our state politicians should be very careful when tinkering with the careers and retirements of so many residents.