Fordham Institute Report Gets It Wrong

Namely, CO PERA is a hybrid defined benefit retirement plan. This is important because it differentiates CO PERA from other defined benefit plans. Put simply, for PERA members, the benefits paid out always exceed the contributions they put in, regardless of how long they stay in their position and in the pension system.

Here is how this works.  A PERA member may refund or rollover their contributions, plus interest, at any point after they leave PERA.  That might be after a couple of months or multiple years.  Every PERA member is eligible for:

  • Years 1 – 4 — a refund/rollover of their contributions plus interest at any point (currently 3% interest compounded annually); or
  • After Year 5 (Vested) — all of their employee contributions with interest plus a 50% match on employer contributions and interest; or
  • Retirement Eligible — a 100% match on all contributions plus interest or a lifetime monthly benefit

It’s no surprise really that an education reform policy think tank in Washington, D.C. didn’t understand how we operate in Colorado. If you’re looking for more (accurate) information on CO PERA and the benefits it offers compared to a 401(k) style plan, for example, don’t look to D.C., look right here in Colorado at the study commissioned in 2015 by the Colorado General Assembly.  That study, conducted by the independent actuarial firm Gabriel, Roeder, Smith & Company, found that regardless of age or length of service, no plan “provides a more effective level of benefits than the PERA Hybrid plan.” Read more about this study here.

The Pew Center Gets It Wrong For Colorado

On April 26, 2011, The Pew Center on the States released a report entitled “The Widening Gap: The Great Recession’s  Impact on State Pension and Retiree Health Care Costs. In this report the Pew Center equates pension funds in 2009 with a growing crisis but they forgot to mention that Colorado joined together for a bi-partisan solution in 2010.

The bottom line is the Pew data is seriously outdated and Colorado has made numerous changes since the time frame this report reviews.

PERA has a written response to the Pew study available here.

To know more about the changes Colorado has made, visit our page on Senate Bill 1.