UPDATE: The Senate Finance Committee on Tuesday unanimously passed an amended version of SB 147.  It now goes to the Appropriations Committee.

The amendment was mostly a cleanup amendment, and it added a section that claified that although some duties could be delegated to the director of the organization, the board ultimatley retains authority.

DENVER — A pair of public school teachers turned state representatives — one Republican and one Democrat — and two state senators with close ties to education, and also on opposite sides of the aisle, are asking their colleagues to reform the way Colorado’s Public Employees Retirement Association (PERA) is managed.

Senators, Byron Pelton (R-Sterling) and Chris Kolker (D-Centennial) along with Representatives Lori Garcia-Sander (R-Eaton) and Meghan Lukens (D-Steamboat Springs) are co-sponsoring Senate Bill 25-147 “Modify Board Management Public Employees Retirement Association” in their respective chambers.

While Pelton is the only sponsor who never directly worked in education himself, his wife is a teacher. Kolker was a teacher before becoming a financial planner, and his wife is a school counselor. Garcia-Sander was a teacher and administrator in Northern Colorado for her entire career before retiring a year ago, and Lukens was a teacher in Steamboat Springs until being elected to the legislature in 2022.

Cracking open PERA

Garcia-Sander said she became a co-sponsor on the bill because at the time she was asked, she was watching a former colleague struggle with getting information from PERA concerning a jump in health insurance rates that were more than three times what they were the year before.

“Her rate went from less than $100 a month to more than $300,” Garcia-Sander said. “My friend just kept asking ‘when was this notification sent?’ She got the run around by those at PERA trying to get answers.”

Public pension recipients must use the online PERA portal to get answers, and according to Garcia-Sander the site not only doesn’t have a lot of information, but is hard to navigate.

“She couldn’t get in touch with anybody,” Garcia-Sander said. “She’s wondering who was making the investments? Who was making decision on health insurance? Who’s in charge?”

The bill is scheduled to be heard at 2 p.m. in the Senate Finance Committee on Tuesday, Feb. 25.

The biggest change in the bill would make the PERA board of directors a local public body for the purposes of open meeting laws. It also would limit the terms that board members could serve to no more than two consecutive four-year terms, clarify how term limits apply in the case of vacancy, and requires the board to immediately begin conducting their meetings in public and according to all open meetings laws.

The meeting change would require the board to post and regularly maintain and update the PERA website with the following information:

• The notice with specific agenda information, if available, for the board’s next public meeting;
• The policy for and process by which a member of the public may participate in any public meeting of the board;
• A link or other means of public access to the records of past public meetings of the board; and
• The official email address of the board

Also, beginning on Jan. 1, 2026 the board would be required to post certain financial information on their website on or before the first day of the new calendar year.

Finally, it clarifies that, while the board may delegate matters of day-to-day administration of the association to the executive director or other individuals, the board must retain authority and responsibility for the overall management of the association.

PERA’s ongoing problems

PERA has long been a controversial topic in Colorado. It has not been “fully funded” for decades because of past mismanagement, poor investments, and what are known as “defined benefit” plans, which guarantee set retirement benefits regardless of how much money retirees paid into the system.

The current estimate by the PERA board for when it might be fully funded isn’t until 2048.

According to Joshua Sharf, a member of the legislature’s Pension Review Subcommittee, PERA’s 2023 investment returns were not good.

“PERA lost 13.4 percent, leaving its division trust funds 69.9 percent funded at the end of the year, yet claimed during the subcommittee meeting that it remains on track for full funding by 2048,” said Sharf, noting that in 2024 the outlook was not much brighter.

“Not only is the annual actuarial Signal Light report less optimistic than last year, an independent audit of that report using a more rigorous and realistic methodology gives even more cause for concern,” he wrote in a Complete Colorado opinion piece.

Sharf noted in his report that every few years, the state conducts an audit of the report, which makes sure that the actuary who completed the report has faithfully implemented methodology, and accurately applied assumptions and correctly calculated the results.

“It almost always results in a clean bill of health because it never questions the validity of the actuary’s approach,” Sharf said.

However, in 2024, the subcommittee decided to ask a second set of eyes on the auditing and the results were “enlightening,” continued Sharf.

The firm hired by the committee, PNYX, estimates PERA’s long-term returns at 6.71 percent, more than half a percent lower than its 7.25 percent assumption, resulting in a nearly 16 percent higher liability, and a nearly 6.5 percent higher unfunded liability.

At this rate, the odds of being fully funded by 2048 are just at 50-50, according to PNYX.

Sharf concurred with Garcia-Sander on the need for reform, adding that Kolker was on the oversight subcommittee for a while, and the transparency talk came up frequently, so he wasn’t surprised Kolker was on the bill.

“I think they want to make sure that their membership is aware of stuff and make it easier to mobilize, and have fewer hurdles for the public to cross to get information.”

Garcia-Sander added that despite arguments that PERA is not a public entity, it uses and invests public dollars, so it should be treated a public entity, and thus be accountable and available to their members.

“My friend just wanted to talk to someone about what the investments were and why her insurance was going up so high, and she couldn’t get anyone to talk to her.”