PERA Under Scrutiny: Teachers Retirement Fund Faces A Shortfall… And Changes
The Colorado legislative session is underway and one of the biggest issues facing lawmakers is what to do about a shortfall in the retirement fund for teachers. The Colorado Public Employees’ Retirement Association is 58 percent funded.
PERA, an alternative to Social Security, is the sole retirement benefit for state employees and the more than 53,000 public school teachers.
Tom Tonoli, a retired Poudre School District teacher, was a past president for the Colorado School and Public Employees Retirement Association. The organization is an advocacy group that works to protect PERA benefits for retired teachers. He said part of the shortfall is due to retirees living longer. It’s an ongoing problem and it’s led his group to face a reduction in cost-of-living benefits before. They’re again open to the idea.
“The school district retirees were quite willing to change their cost of living adjustment back in 2010 from 3.5 to 2 (percent),” he said. “That was broadly accepted by our retiree group. We supported that change and we do now support a change in reduction.”
There the currently four different proposals – from Gov. John Hicklenlooper, the PERA Board of Trustees, the legislature’s Joint Budget Committee and State Treasurer Walker Stapleton – to increase the PERA fund. Three out of the four would like to reduce the cost of living adjustment (COLA) rate for retirees from 2 percent to either 1.5 percent or 1.25 percent.
Proposals also seek to increase the retirement age from 56 to 65 or 67.
Changes to PERA could also affect current teachers. Right now, they contribute 8 percent to the retirement fund. The proposals recommend increasing that amount 1 percent to 5 percent.
Colorado has a teacher shortage and one of the reasons widely stated is that they are underpaid. But Tonoli said strong PERA benefits are a plus to teachers who decide to work here.
"The low pay, I think, is balance by the retirement plan," he said. "(It's) a very dependable retirement plan. I think that's a key feature in maintaining people who move into the profession."
A bill to increase the PERA fund has not yet been submitted to the legislature, which is expected to debate changes in the coming weeks.