Legislature Slashes Pension Benefits for Government Workers
Colorado lawmakers passed landmark legislation late Wednesday, May 9, reducing pension benefits for thousands of teachers and other government workers. But the measure also included language designed to give lawmakers more information about controversial investments that have delivered hundreds of millions of dollars in fees to Wall Street firms.
With the threat of such cuts looming, last month Senator Michael Bennet said that Colorado must consider a ballot measure to better fund the state's education system.
The narrow disclosure language in the pension bill — which still keeps fee details hidden from the general public — was added following our investigation showing that in recent years, Colorado's Public Employees Retirement Association (PERA) has paid more than $1 billion in such fees even as the pension fund has delivered returns that have significantly trailed a low-fee stock index fund.
The bill slashes cost-of-living increases and requires higher pension contributions from educators, firefighters, cops and other public-sector workers covered by PERA. The changes — opposed by the state’s largest teachers' union and approved after recent teacher protests at the Colorado State Capitol — were designed to shore up the finances of PERA, which faces a $32 billion gap between what it has promised retirees and what it has in the bank.
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