Ritter signs PERA overhaul

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DENVER (AP) – Colorado Gov. Bill Ritter on Tuesday signed a bill that cuts state employee retiree benefits to prevent the pension system from going broke.

Ritter said the cuts are difficult but necessary. Provisions in the bill require shared sacrifice and shared solutions from public employers and employees without imposing an unfair or undue burden, he said.

The pension system covers 450,000 state workers, teachers and local government employees, as well as lawmakers.

State budget officials warned that without changes, the Public Employees Retirement Association plan would go broke in 20 years.

“This legislation will keep the PERA fund solvent and allow the system to meet its obligations to current and future retirees. We are all confronting the harsh economic realities of the worst recession since the Great Depression,” Ritter said.

Under the new law (Senate Bill 1), retirees will get no cost of living increase this year instead of the normal 3.5 percent increase, which would save PERA $80 million. Next year they would get the lesser of inflation or 2 percent and, after that, annual increases could be no higher than 2 percent.

Backers wanted to pass the bill before March, when PERA would have to issue its normal cost of living increases.

The retirement age for new employees will rise from 55 to 60, and contributions would increase for both employees and their government employers.

PERA is suffering partly because of the recession. Its assets fell from $41.4 billion in December 2007 to $29.5 billion in July 2009 although PERA estimates that it will have a 15 percent rate of return when all its investments are counted from 2009.

3 Responses to Ritter signs PERA overhaul

  1. Could the law makers take a larger cut so the individuals who actually support the state through their efforts can take a smaller or no cut? Better yet, why not eliminate PERA for lawmakers althogether?

    Nuff said,
    Christopher Colvin

    Christopher Colvin
    February 24, 2010 at 11:53 am

  2. So a ‘cut’ is going from an increase of 3.5% per year to 2%? Sounds like liberal gibberish to me!

    Rushtoldyouso!
    February 25, 2010 at 8:59 am

  3. Rushtoldyouso!: Wow! A Democrat recommends a cut in spending, and you can’t get behind it. Seems like conservatives will oppose anything suggested by anyone with a (D) behind his or her name.

    Fight Obama, fight Ritter, fight common sense because Rush told you so.

    Ellen
    February 25, 2010 at 11:20 am