Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous week. This is the news you need to know in the fight for a secure retirement.
The Colorado legislature’s IOU to the state’s public pensions is growing as retiree benefits get cut by Brian Eason. State lawmakers across the country have an obligation to fully fund their public pension systems every year, just as public employees pay into their pension with every paycheck. In Colorado, state lawmakers are attempting to rectify the skipped or partial payments for the Public Employees Retirement Association (PERA). In November, the newly created Pension Review Subcommittee, which comprises a bipartisan group of lawmakers and independent financial experts, advanced a bill that would repay $225 million the legislature borrowed from PERA in 2020 in addition to $79 million in expected investment gains. The total amount to be invested in PERA would be $304 million. “Eventually, (the lost payment) is going to have to get made up somehow,” said Karen Wick, the program manager for Secure PERA. “If the state is not doing its part, the others are going to have to do more. And that’s where it gets really challenging when we’re talking about real lives.”
Most Kentucky pension plans face billions in debts, but not the one for legislators by John Cheves. Before 2017, the Kentucky legislature underfunded their state’s pension systems for many years, often skipping or partially paying into their systems to cut taxes or fund the state’s budget. In turn, public employee pension systems are underfunded: Kentucky Employees Retirement System (KRS) is currently 18.4 percent funded, and the Teachers’ Retirement System (TRS) is 65.6 percent funded. As Cheves notes in this article for the Lexington Herald Leader, one of the state’s pension systems is overfunded—the Legislators Retirement Plan. Last week, lawmakers were briefed that their pension system is 108.9 percent funded, while their retiree health insurance plan is 362 percent funded. Established in 1980, the LRP offers a pension and health insurance to retired Kentucky legislators.
Be sure to check back in next Friday for the latest news in the fight for a secure retirement!
