In an unusual development on the gubernatorial campaign trail last week, a Republican candidate has criticized a likely opponent for “politicizing” Colorado’s public pension program.
“You know, one of my opponents claims [PERA is] a major crisis. I don’t believe it’s a major crisis,” Republican gubernatorial candidate Victor Mitchell told Jimmy Lakey, who’s the morning host on KCOL 690-AM Friday.
“I don’t believe we should be politicizing it,” Mitchell continued. “Certainly, it has been a broken system from a standpoint that the benefits are too generous and the incentives are perverse. But I don’t believe it’s in a state of crisis.”
Colorado Treasurer Walker Stapleton, who’s expected to join the growing list of GOP gubernatorial candidates, has been highly critical of Colorado’s Public Employees Retirement Association (PERA) for years, saying, among other things, that the program’s growth forecasts are unrealistic and thereby subject the state to a potentially catastrophic unfunded liability.
In terms of news media coverage over many years, Stapleton is defined by his criticism of PERA.
Often casting himself as a rare voice of reason in a sea of nonchalance about PERA, Stapleton has even said neither the PERA board nor state judges can make fair decisions about PERA because they are part of the state retirement program.
Analysts point out that Stapleton’s attachment to the PERA issue could be a political liability, simply because a large majority of people have no idea what PERA is, and many of those who do want it built up, not torn down, because public employees rely on it, not Social Security, for their retirement.
On the substantive PERA issues, in contrast to Stapleton’s drumbeat of crisis, Mitchell argued on air that PERA should be reformed, but there’s not a lot to worry about anytime soon.
MITCHELL: “It’s certainly a problem. I mean, we have — in the big picture, the fund has about $40 billion of assets. It’s paying out about two-and-a-half billion dollars a year in benefits. So, it’s fully funded for the next 30 years even with a 0% return. Obviously, it has never returned anywhere near that. But the benefits are, bottom-line, simply just too generous. We’re paying people 75 percent of their last three years’ average wages. And that should be changed to a 10 year average instead of a three year average. In addition, we have got to create incentives where people leave the state workforce, that it doesn’t create a burden on PERA.”
PERA backers say the fund is stable and will be able to provide benefits to all its members.
A coalition called the Colorado Coalition for Retirement Security has crunched numbers showing how PERA’s stability has improved over the past decade.