A coalition of 10 public-employee groups has broken ranks with the Colorado Public Employees Retirement Association over proposed changes to bridge a funding shortfall in the state’s largest pension plan.
The Colorado Coalition for Retirement Security, a new group representing more than 100,000 public workers in the state, said Tuesday it opposes any structure that would pay future hires lower pension benefits than current workers.
PERA, which covers 370,000 members, backs a bill that would funnel a portion of contributions from future hires to overcome an $11.3 billion shortfall.
Future hires would also receive reduced retirement benefits.
Another bill backed by Gov. Bill Owens and Treasurer Mike Coffman would do the same while pumping a portion of future pay hikes into the plan.
“Our opposition to the two- tier system is firm,” said Lynne Garramone Mason, who handles government relations for the Colorado Education Association. “It is not fair to balance PERA on the backs of new employees.”
Grandview High School coach and teacher Jody Dosher said a two-tier system would communicate to future hires a message that they are less valuable.
“It is hard enough to recruit and retain teachers,” he said. “Don’t gamble with the future.”
The opposition represents a strong head wind for the two PERA bills, which have not advanced since their introduction.
“The two-tier system was dead on arrival. It was a nonstarter,” said Miller Hudson, executive director of the Colorado Association of Public Employees.
Hudson said PERA, in a series of meetings with its members, gave the impression that everything would be OK.
“They caught us by surprise,” he said of PERA’s proposal to create a two-tier system.
PERA’s board spent last year crafting proposed changes in public meetings, spokeswoman Katie Kaufmanis said.
Discussions continue, including consideration of the two-tier system, she said.
Coalition representatives are lobbying legislators and taking part in compromise talks led by Senate President Joan Fitz-Gerald, D-Jefferson County.
But the coalition doesn’t have any plans to introduce an alternative bill, Mason said.
Owens has threatened to call a special session if PERA reforms aren’t passed. A group called Americans for Prosperity is also pursuing a ballot measure to shift future PERA hires into a defined-contribution plan, where participants would bear market risk in their retirement savings.
“We are absolutely committed to seeing the defeat of that ballot measure,” said Mark Schwane, executive director of the American Federation of State, County and Municipal Employees.
Mason argues that PERA is fundamentally sound and can be set right with moderate fixes.
“We favor a measured approach and modest adjustments,” she said.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
