Public pension retirees to feel the pinch in Colorado
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Retirement benefits for nearly 1 in 10 Coloradans will increase just 1% in 2022, far short of what's needed to cover the rising costs of living.
Why it matters: The 631,000 members of the state's Public Employees Retirement Association are paying more for fewer benefits, the Colorado Sun reports.
- Even still, the state risks slipping off track of its goal to reach full funding by 2048, new data shows.
By the numbers: The annual contribution for PERA members will increase to 11% next year from the current 10.5%.
- On the benefits side, the cost-of-living adjustment is decreasing to 1% — the fourth rate reduction since 2010.
- It comes as the region saw inflation rise 6% in the last 12 months through October.
What's happening: The financial pinch is precipitated by PERA's $31 billion unfunded liability. The public pension is 37% short of what's needed to cover the full cost of benefits, according to an annual report issued in late October.
- PERA's actuarial consultant puts the odds at 56% that the state meets the full-funding benchmark set in state law, the Sun reports.
What to watch: Colorado lawmakers are split on how to handle the situation.
- A pension advisory group recommended legislation to inject $304 million into the system to cover a missed payment that lawmakers delayed in 2020, but top Democratic leaders are opposed.
The bottom line: "The next decade is critical to our long term," PERA executive director Ron Baker told a legislative committee. "You can't get through the next 30 (years) without getting through the next 10."
This story first appeared in the Axios Denver newsletter, designed to help readers get smarter, faster on the most consequential news unfolding in their own backyard.