I’m protective of our quality of life and of what makes Colorado such a great place to live, work and raise a family. I don’t see it as my job or obligation to weigh in on public pensions in general, but I do think we all have an obligation to take a hard look at our public institutions and the evidence around whether they are working for our economy.
According to a recent study, Colorado PERA, our state’s retirement plan for more than 500,000 public employees, works for Colorado’s economy.
This month, the Colorado Office of the State Auditor released a study by the independent actuarial firm of Gabriel Roeder Smith & Company (GRS) about the Colorado Public Employees’ Retirement Association (PERA) retirement plan design. GRS examined the cost effectiveness of the plan compared to an array of alternative plan designs from both the public and private sectors.
Its conclusion was simple and straight-forward: “PERA is more efficient and uses dollars more effectively than other types of plans in use today.”
The report takes a comprehensive look at not just PERA’s effectiveness for full career participants, but also examines short and medium career patterns. In the case of every plan design, public or private, PERA outperforms for every career pattern. Whether it’s for customers or employees, this is the kind of efficiency I think business leaders strive for — delivering the best product to meet the needs of those we serve for the lowest cost.
I see a couple of important take-aways from this independent analysis. First, the retirement benefit that we as a state think most appropriately compensates our public workers is already being delivered most effectively through PERA’s existing plan design. Second, because of the efficiency of the PERA plan, we have a retired public workforce that has a dignified retirement, is able to fully meet its own needs, and is an important, positive economic factor in our state.
As for the existing unfunded liabilities in the system associated with benefits already earned, the report determined that going to an alternative plan design would drive up the cost of eliminating the unfunded obligation by between $8 billion and $16 billion over the next 40 years.
For policymakers and taxpayers, the GRS report lays out clear information about the cost-effectiveness of PERA’s retirement savings plan compared to other plans. The report demonstrates that PERA is delivering our state a sufficient, efficient, cost-effective retirement plan, meeting the needs of Colorado’s teachers, highway workers, State Patrol officers, and other hard-working public workers, as well as business owners and taxpayers.
PERA is doing the right thing and doing things right for the Colorado economy.
Don Marostica was a businessman for 37 years, a high school teacher for four years, and a state representative from Loveland for three years. He also was the executive director of the Colorado Office of Economic Development and International Trade.
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