Colorado lags behind the national average in funding pensions for state employees, according to a study released Tuesday by the Pew Center on the States.
In the coming decades, Colorado faces a $50 billion bill to pay for those pension benefits but as of 2006 has set aside only $37 billion, the study reports. That funding percentage — 74 percent — falls below the national average of 85 percent, according to the report. Nationwide, states face a combined bill of $2.35 trillion to fund retiree pensions, the study found.
“Now we know the magnitude of this bill — and paying it will require an enormous investment of taxpayer dollars,” said Susan Urahn, the Pew Center’s managing director, in a statement.
Katie Kaufmanis, the spokeswoman for Colorado Public Employees Retirement Association, which manages the pensions for about 400,000 current, former and retired state workers, said the Pew report doesn’t take into account administrative and legislative changes in recent years designed to strengthen PERA.
Employers have increased their contribution to the fund, and new employees starting this year will see a different benefit structure. “So it’s not gloom and doom,” Kaufmanis said. ” We are on track to being fully funded.”
According to the Pew Center report, Colorado is doing a much better job than other states at funding state employees’ nonpension retirement benefits, such as health care, dental care and life insurance. As of last year, the state had funded 17 percent of the estimated $1.2 billion bill for those benefits. The national average is 3 percent, and numerous states hadn’t set aside any funding to cover those benefits.
Kaufmanis said that in 1985, PERA began sending a portion of the employer contribution to a health care trust fund to pay for the benefits. “We’re pre-funding health care benefits for retirees that most states aren’t doing,” Kaufmanis said.
John Ingold: 303-954-1068 or jingold@denverpost.com
