State Treasurer Mike Coffman paused last week from his wedding plans and combat-zone preparations to offer a few words of advice to his as-yet unnamed successor: keep it simple.
With looming fights over reforming the state budget and a host of other issues, Coffman suggested that the interim treasurer focus on one issue: the financial condition of the Public Employees’ Retirement Association.
Coffman, who will get his job back in March 2006 when he returns from a second stint with the U.S. Marines in Iraq, said the retirement system is $10 billion in the hole.
“The biggest challenge by far is to support the commission to strengthen and secure PERA,” Coffman said last week on the eve of his wedding this weekend, a brief honeymoon in New York and last-minute preparations before rejoining the Marines on June 6.
Coffman said his interim replacement will be able to lean on Ben Stein, the state’s deputy treasurer, to deal with any other issues that flare up while Coffman completes his tour.
Coffman made PERA a top priority last year by creating a commission to review the system.
The hole is caused by costs that exceed the money it has on hand to pay the expected bills. PERA owes billions of dollars in retirement benefits to the state and local workers who participate in the program.
Most of those bills don’t come due for years – in many cases, decades – but Coffman says it’s the biggest financial issue on the next treasurer’s agenda.
Katie Kaufmanis, director of communications for PERA, said the retirement program does not face a crisis.
She said the retirement system has about 75 percent of its projected needs. At that level, it is on better footing than it was 30 years ago, when the retirement program held assets worth 70 percent of its projected needs, she said.
In the long run, the system fills the hole by getting better-than-average returns on its investments of workers’ retirement money.
“Not all of our unfunded liability is coming due tomorrow,” Kaufmanis said.
Earlier this year, Coffman convened a commission – headed by former Gov. Richard Lamm – to investigate ways to improve the finances of the system. The Republican treasurer is confident that Lamm, a Democrat, will conduct a thorough review. Lamm was out of the country last week and unavailable for comment.
“I think he’s more fiscally conservative than some Republicans I know,” Coffman said.
Coffman, who gets paid $68,500 annually as treasurer, quipped that his income will probably go up while serving in Iraq because he won’t be dining in fancy restaurants.
Still, Coffman might have a debt hanging over his head. Coffman and his fiancée, Cynthia Honssinger, plan a first-class trip to New York to celebrate their nuptials and “it’s probably going to take me the rest of my life to pay it off.”
Staff writer Mark P. Couch can be reached at 303-820-1794 or mcouch@denverpost.com.