PERA was kind enough to respond (below) to defend itself from an opinion column published in the Vail Daily HERE written by Vince Emmer, version of which is on this site HERE (minor changes may have been made to accommodate internet search engines).
Vince Emmer should have checked his facts before he wrote about the state’s largest retirement plan, the Colorado Public Employees’ Retirement Association. (Vail Valley Voices: “Tax Increases to deplete family budgets,” Oct. 22).
If he had, he might have learned that legislative changes made in 2010 to Colorado PERA resulted in PERA members and retirees – not their employers or “taxpayers” – shouldering 90 percent of the costs of returning the system to long-term sustainability.
The 478,000 members of PERA – who are taxpayers, too, of course – stepped up to ensure the retirement security of their fellow current and former public employees, including teachers, snowplow drivers, judges and state patrol officers.
The claim that Colorado PERA investments are somehow “aggressive” also ignores reality. PERA invests $40 billion in member assets based on prudent, long-term strategies where success is measured over many years.
No losses are being made up for by “shooting out the lights in the stock market,” as Mr. Emmer suggests. Sorry, that’s wrong, too. PERA has, instead, relied on solid investment strategies created under the direction of the Board of Trustees with the help of highly experienced staff and consultants. PERA’s investment strategies match its mission, with an investment horizon of decades and a focus on maintaining the stability of the fund.
PERA’s investment portfolio is broadly diversified, including a range of investment classes (not just the stock market). Since PERA adopted a benchmark for comparison purposes in April 2004, PERA’s actual investment returns have exceeded it by more than $1 billion, according to the most recent annual financial report.
Over the quarter century ending in 2008, 21 percent of money in the PERA trust funds came from employees’ own contributions, while 19 percent came from public employers who are supported by taxpayers. The rest (60 percent) comes from investing these contributions.
For every $1 that public employers in Colorado contributed to their employees’ PERA retirement, $3.64 was paid out in the form of earned benefits to retirees, who live in every county in the state. And since many retirees aren’t in the savings mode, this retirement income is spent supporting local businesses all across Colorado.
In Eagle County alone, PERA pays $8 million each year to former public servants, including, most likely, some of your neighbors and friends.
This steady stream of revenue flowing to businesses in Colorado is especially important during an economic downturn. The $3 billion paid annually to retirees statewide creates more than 20,000 jobs in Colorado and generates $180 million in tax revenue to state and local governments. Investment returns allow PERA to provide modest but reasonable benefits ($2,900 per month on average) for public servants without placing an excessive burden on taxpayers. In fact, employer contributions to pensions account for just 2.16 percent of all Colorado state and local government spending, according to 2008 U.S. Census Bureau data.
It is unfortunate that Mr. Emmer did not seek to provide factual information about Colorado PERA. That public employees and the benefits they earn have been vilified so much in public discourse of late is no excuse for ignoring the facts. I invite Mr. Emmer and all Coloradans to learn more at www.copera.org.
Carole Wright, Chair, Colorado PERA Board of Trustees
Carole Wright’s response to Vince Emmer’s Vail Daily story was published HERE in the Vail Daily on 8 Nov 2011.