The largest merger in state history between two multibillion-dollar public retirement systems would be up to a vote in the legislature under a bill being drafted by Sen. Paula Sandoval.
In the past, mergers between Denver Public Schools Retirement System and the statewide Colorado Public Employees Retirement Association, or PERA, have failed when the parties could not come to an agreement.
This time might be different because legislators likely will make the decision in the Capitol. Sandoval is a Denver Democrat.
Board members for Denver schools’ retirement system on Monday learned about the legislation in a trustee meeting and also were told that if a merger does not occur, benefits for retirees could be cut.
“Our investment consultant has informed us that we had a negative return of 23.7 percent,” said Norm Ruggles, chief executive officer of the Denver schools retirement system. “We are looking into the ramifications of what that means. Benefit reductions would be more likely than increased contributions.”
Denver schools’ retirement system has 15,000 members and total assets of $2.48 billion. PERA has about 440,000 members and $30.2 billion in assets.
Denver Public Schools’ officials are pushing for the merger, saying the district pays $47 million more a year in retirement and pension than it would pay if it contributed at the same rate as other Colorado school districts.
That works out to be $685 more per student, said Superintendent Tom Boasberg.
“This is a fundamental injustice to Denver’s students,” he said.
Denver pays more because it funds its system at a higher level than PERA.
Also, the district’s enrollment has declined, whereas the rest of the state’s school enrollment has grown over four decades.
The ratio of employees contributing to the pension to the number of retirees collecting benefits in Denver is about 1.2-to-1.
PERA’s ratio is estimated at 2.4-to-1.
Movement of employees between Denver and other districts is another issue.
Denver teachers and principals lose their years of accrual if they move to any other district in the state, and teachers and principals from other districts must start over if they take a job in Denver.
“The wall that exists has several harmful consequences,” Boasberg said. “Ultimately, a merger would finally tear down the wall that has existed for too long between Denver and the rest of the state.”
Jeremy P. Meyer: 303-954-1367 or jpmeyer@denverpost.com
