Reform Colorado’s PERA now to ensure solvent public pensions | Complete Colorado – Page Two.
The Public Employee Retirement Association (PERA) admits to having $23 billion in obligations for which it has insufficient assets to cover. Using a more conservative discount rate, appropriate for a public pension obligation, the unfunded liability looks more like $57 billion, or $23,000 for every Colorado household.
To be sure, these are long-term obligations due over decades. Nobody is going to come to the door tomorrow and present the state of Colorado with a bill for $57 billion. However, as Detroit has shown, the always-future nature of public pension liabilities can make it easy to ignore them until it’s too late, and they become all-too present.
Colorado’s own relatively recent history provides much the same lesson. As recently as 2000, PERA was 105 percent funded. However, a combination of aggressive investments and generous benefits led to a precipitous decline in funding. By 2010, PERA’s defined benefit plan was only 65 percent funded.
Between pension obligations and expensive electricity, thanks to various green initiatives, it’s safe to say that the cost of living in Colorado will continue to rise faster than the rate of inflation. Of course it requires commons sense to see this one coming down the road, a quality in short supply with our politicians, especially the Democrats.
