Denver school board members Wednesday “reluctantly” canceled a plan to merge the Denver Public Schools Retirement System with the state’s system, citing too much ambiguity and a looming deadline.
“I’m deeply disappointed,” said board member Elaine Gantz Berman, who was one of the plan’s earliest champions. “It’s (the merger) one of those things that the board’s wanted to do for more than four years.”
Board members and Superintendent Michael Bennet, in a letter to employees, cited the state treasurer’s ad hoc commission report released in September as one of the main reasons for concern about the merger with the Public Employees’ Retirement Association.
The report suggested that public employees would need to contribute more of their pay and retire later to mend the $12.8 billion shortfall that PERA faces.
The treasurer’s report, if adopted by the legislature, will probably significantly affect PERA, and that uncertainty made board members nervous.
“No prudent business person, with these kinds of ambiguities and an incomplete agreement, would proceed with the merger at this time,” Bennet said.
In addition, the cost of the merger to DPS was “fluid,” Berman said.
The DPS retirement system covers about 13,000 active and retired employees, and PERA covers about 365,000 state and local government workers and retirees.
The idea to merge the two systems came several years ago, when DPS leaders saw it as a boon to lure suburban teachers, who may want to stay in their existing jobs because of their retirement plans. All teachers in the state, except in Denver, are covered by PERA.
For Denver resident Leo Smith, who attended the Wednesday meeting, the deal would have helped his wife, a Denver elementary school teacher.
As a PERA recipient, his wife would have received a 3.5 percent cost-of-living increase a year, instead of the current 3.25 percent. Calculated over a lifetime, he said, that was $40,000.
“I thought it was not a good comment on the PERA board or the DPS board that after five years they couldn’t resolve their differences,” he said.
About half of the DPS retirement system employees were scheduled to retire in the next year, said spokesman John MacPherson. Without the merger, the system will have to hire more people and train them to keep going, he said.
Staff writer Allison Sherry can be reached at 303-820- 1377 or asherry@denverpost.com.
