Addressing Colorado’s $32 Billion Unfunded Pension Liability
This week, the Chamber and its affiliate, the Metro Denver Economic Development Corporation (Metro Denver EDC), shared a letter with Gov. John Hickenlooper and legislators outlining the principles and recommendations we believe should be strongly considered when identifying strategies to improve the financial soundness of Colorado’s defined benefit plan, the Public Employees’ Retirement Association (PERA). For an eight-month period last year, the Chamber convened a diverse group of 18 stakeholders with the goal of providing recommendations to the legislature. Through that process we learned a great deal about Colorado’s pension system and what needs to be done to address the $32 billion unfunded liability.
It is critically important to make the necessary changes that will improve the financial viability of PERA in this 2018 legislative session. Every year the legislature fails to act costs Colorado taxpayers more money.
The Chamber and Metro Denver EDC recommendations include:
- Achieving full funding for PERA by 2048 and maintaining it into the future. Fully funded plans are financially more efficient, less expensive for taxpayers and provide confidence to all stakeholders.
- Sharing the responsibility as we make the necessary fixes. Solving the unfunded liability in PERA should occur with the financial support of employers, current and future employees and retirees. No one group should bear the burden of fixing the unfunded liability.
Creating a structure and process at the legislature that is more responsive when issues, particularly financial challenges, arise for PERA. The legislature is the only entity that can change benefits and funding for PERA; therefore, we believe the legislature must improve its oversight and responsiveness when economic conditions require significant changes be made.
Reporting Legislation That’s Good for Business
The Chamber supported two bills aimed at helping businesses gain a better understanding of state rules and regulations and how they can comply instead of facing penalties.
House Bill 1237 extends a rule that requires departments to publish information about the cost-benefit analysis of rules and regulations indefinitely. It also requires state rule-making agencies to include information about the cost-benefit analysis process on their websites. Publishing the cost-benefit analysis is beneficial to employers because impacts on business, especially small business, can be evaluated with this process.
House Bill 1250 requires that each state agency conduct an analysis of noncompliance with its rules. The analysis will highlight which rules are particularly difficult for businesses to comply with and identify potential issues with the rules themselves. More data and a better understanding of how state rules and regulations impact our businesses can help inform future legislation that can ease burden to Colorado’s businesses.
New Policy Positions
The Chamber supported five bills this week:
- Income Tax Credit for Employer 529 Contributions (HB18-1217)
- Sunset Continue Cost-benefit Analysis for Rules (HB18-1237)
- Analysis to Improve Compliance with Rules by Business (HB18-1250)
- Enforce Requirements 811 Locate Underground Facilities (SB18-167)
- Marketplace Contractor Workers’ Compensation Unemployment (SB18-171)