Taxpayers deserve real PERA reforms

Pueblo Daily Chieftain ^ | 12/19/2009 | Michael Mannino

[businessprofessor]

The debate about reforms to the Colorado Public Employees' Retirement Association (PERA) has reached a new level after the PERA board’s recommendations known as the 2/2/2 plus plan. The plan is another temporary solution to potential long-term problems. Because of PERA’s inherent conflict of interest, it cannot provide recommendations based on new principles. Rather than focusing on the details of PERA’s plan, broad principles must be articulated by the Legislature as guidance for long-term changes. These principles are vital to maintain a competent state work force providing a desired set of services at reasonable cost to the taxpayer.

[businessprofessor]

Here is my editorial about reform of the Colorado PERA plan. PERA is one of the most generous defined benefit plans for government employees. Most of my comments would apply to many other state pension plans. These plans provide highly subsidized early retirement to career employees, a subsidy worth more than $500,000 on average to the retirees in my studies. The economic uncertainties have increased the value of the subsidy and increased the risk to the taxpayer. Colorado PERA wants taxpayers to contribute 20% to bailout the pensions. In other states, the amount is even higher with New York state employers contributing more than 30%.