US - Governor Bill Owens has has suggested a raft of changes to the Colorado Public Employees' Retirement Association (PERA) in a bid to reduce the US$11.5bn in unfunded liabilities. In his 2006 State of the State Address, Owens singled out PERA as one of his top priorities, and said the fund would not be able to reach future obligations unless changes were made immediately.
“Almost everyone agrees that reform is necessary, and most largely agree on what those reforms should look like,” said Owens.
Among the proposed reforms, Owens called for the PERA board to be reformed as an 11-member board to include four independent trustees, as well as the State Auditor and State Treasurer.
“Clearly, the new board should include members who are not part of the pension plan, and who have some investment experience,” he said,
There was also a need to modernise the pension system to reduce current and future unfunded liabilities, said Owens. This would require a separate tier for newly-hired employees that was “stable, sustainable, and less expensive to the taxpayer”, and would significantly reduce the future burden on government while at the same time attracting quality workers to state government.
“We also need to take the politically tough step of examining benefit levels for our current employees,” said Owens. “We can help make the system more sustainable by changing the age at which retirees receive full benefits and—if necessary—reducing benefits in the ‘out’ years for those furthest from retirement,” he said.
These changes should not affect those closest to retirement, but could be phased in for those who have years to go, said Owen.
The spokesperson for PERA said the board of trustees would first review legislation once it was introduced and would only then provide comment. The General Assembly's session began on Wednesday and will last until the first part of May. The board have made their own suggestions for reform, and was working to secure legislative sponsorship for the Board's package. “It is anticipated that PERA's legislation will be introduced in the next few weeks,” the spokesperson said.
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