Why PERA’s Presumptions Are Faulty

by Joshua Sharf | 7:33 am, March 28, 2013

Did you recognize the faulty presumptions in PERA’s spirited defense of defined benefit plans? You have been given a false choice about why defined benefits plans are better than defined contribution plans. In a recent EdNews Colorado Voices column, Colorado PERA Executive Director Greg Smith avers that PERA’s existing defined benefit structure best serves both the teachers and [...]

Forty Years of PERA

by Joshua Sharf | 11:59 am, March 13, 2013

We’ve been here before with PERA.  Sort of.  Most people following the issue remember that in 2000, PERA was over 100% funded, and that its funding ratio has fallen steadily since then.  What they don’t know is that back in 1974, PERA was woefully under-funded, at about the same 60% funded ratio that it is [...]

Public Pensions and Real Returns

by Joshua Sharf | 10:15 am, March 4, 2013

In the discussion on public pensions, there’s been a great deal of focus on the projected rate of return.  I’ve posted on what I think is PERA’s optimistic 8% here, and on the fact that that’s actually an improvement from the 8.75% that they were projecting as recently as 2002.  That said, for pension estimates, [...]

PERA – More Retirees, Fewer Workers

by Joshua Sharf | 2:44 am, March 3, 2013

This chart is more or less self-explanatory.  Over the last 20 years, the number of workers per beneficiary within PERA has dropped from about 3.6 to just over 2.0: PERA’s CAFR includes the following disclaimer: By itself, a declining ratio of actives to retirees and beneficiaries does not pose a problem to a Division Trust [...]

Is Legislative Stinginess to Blame for PERA’s Problems?

by Joshua Sharf | 12:35 pm, January 28, 2013

One of the favorite tropes of PERA apologists runs like this: PERA was fully-funded in 2001 or so, at which point the state legislature began failing to make 100% of its Annual Required Contribution (ARC).  It was then that PERA’s funded level began to drop off.  Therefore, if the state legislature had fully-funded the ARCs, [...]

Lowering the Hill

by Joshua Sharf | 11:34 am, January 23, 2013

Ultimately, large changes will be needed to keep PERA solvent.  But little changes can have an effect, too.  Today, the state House Finance Committee will be hearing HB13-1040 from Republican Rep. Kevin Priola: Current law averages the 3 highest annual salaries of a member of the public employees’ retirement association (PERA) when calculating that member’s [...]

Democrat Sen. John Morse Follows Familiar Pattern On PERA Reform

by Joshua Sharf | 10:10 am, January 23, 2013

The state Democrats, led by State Senate President John Morse (D-Colorado Springs), are continuing their deeply unserious approach to Colorado’s massive unfunded PERA liability this session.  Incoming Speaker of the  House Mark Ferrandino (D-Denver) had already indicated as much, first by characterizing those who would seek to deal with the problem as wanting to use [...]

The Hill Gets A Very Little Less Steep – For Now

by Joshua Sharf | 10:22 pm, January 22, 2013

One of the main points of contention about PERA has been the expected rate of return.  Up to 2001, PERA used an expected rate of return of 8.75%, but lowered that to 8.5% from 2002-08, and again to 8% in 2009, where it now stands. So how has PERA done since 2001, when it stood [...]

PERA – It’s All For The Kids

by Joshua Sharf | 5:18 pm, January 20, 2013

Not all school spending is for the kids.  A lot of it is for the teachers, at the expense of the kids.  Over the last five years, even as school districts and teachers unions complain that per-student spending has been “slashed,” “cut to the bone,” or “eviscerated,” per-student spending on the PERA School Division has [...]

PERA’s Resolute Optimism, Part 2

by Joshua Sharf | 8:18 pm, December 9, 2012

In the previous post, I mentioned that PERA, in retaining its 8% expected rate of return, was persisting in an unwarranted optimism, one that is likely to end up costing the citizens of Colorado billions of dollars down the line.  Part of the evidence was that other municipal pension plans around the nation have recently [...]

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