Perks are out at PERA.
The Colorado Public Employees’ Retirement Association reported Tuesday that it is heeding auditors’ advice to eliminate controversial car allowances, expensive dinners and other benefits.
In a state audit last year, the association was tagged for spending too much on perks at a time when the pension fund didn’t have enough money to pay its future obligations.
PERA’s “unfunded liability” emerged as a political hot potato during the past legislative session.
Since then, state lawmakers have imposed some reforms on PERA to shore up its finances. And PERA has cured some of its lavish spending habits, according to a new audit report released Tuesday.
Meredith Williams, the executive director of PERA, said the retirement system is even phasing out its annual employee dinner.
“The annual dinner that used to be a problem is now a barbecue in my backyard that PERA doesn’t pay for,” Williams said during PERA’s annual meeting with the state auditor.
All reimbursement requests for meal costs must include itemized receipts, not just the credit-card tab, he said.
Williams joked Tuesday that PERA bookkeepers even re fuse to cover the cost of a $4.50 Diet Coke from hotel mini- bars when he travels.
At year-end 2004, the pension fund’s $33.7 billion in assets had decreased to 70.6 percent of its liabilities, the lowest point in two decades. As of year-end 2005, the pension fund reported it had $36 billion in assets – or 73.3 percent of its liabilities.
In 2000, PERA had more assets than liabilities. The ratio was 105 percent.
Some elected officials seized on the continuing shortfall as a nagging worry for the pension fund, which is banking on an annual investment return of 8.5 percent to work its way back to a stronger financial position.
“This audit continues to show PERA living on the edge with its actuarial assumptions,” state Treasurer Mike Coffman said in a prepared statement. “One misstep or another bear market could plunge the system into financial chaos.”
Based on the reforms passed during the 2006 legislative session, the state and school division, which makes up most of the retirement fund, is expected to climb to an assets-to-liability ratio of 78.4 percent by 2034 if the pension fund achieves an annual return of 8.5 percent.
In 2005, the pension fund increased its net assets by $2.3 billion, earning a 9.8 percent return on assets. The fund paid $2.1 billion in retirement, survivor and disability benefits.
Staff writer Mark P. Couch can be reached at 303-820-1794 or mcouch@denverpost.com.
