Earl Wright, co-founder of the Common Sense Institute (CSI)—a subsidiary of the Koch-funded State Policy Network–wants you to believe that Colorado public employees don’t deserve their hard-earned defined-benefit pensions. Well, Mr. Wright, we’re here to tell you that you’re wrong.
The Colorado Public Employees’ Retirement Association (PERA) has weathered a lot in the last decade. Since the Great Recession of 2008, legislators in Colorado have worked tirelessly to get PERA on solid financial footing. This includes increasing employer and employee contribution rates, capping cost-of-living adjustments (COLAs) and attaching them to the system’s funded status, and extending the years of service required to receive pension benefits. In 2018, lawmakers passed Senate Bill 200, a bill that included additional sacrifices from employees, employers, and retirees as well as a promise from state lawmakers to appropriate a yearly $225 million payment to the pension system. As a direct response to the Covid-19 pandemic, the state decided to skip out on its promised contribution in 2020. However, this year’s legislative session pushed through House Bill 22-1029 and paid back the missed $225M direct contribution from 2020, plus a $155M pre-payment towards next year’s direct contribution.
This move to get PERA back on track shows state lawmakers’ efforts toward funding discipline. So why did Mr. Wright call for PERA to be shut down in his recent op-ed for The Gazette? He says the only solution to get taxpayers off the hook for public employees’ “generous” pensions is to close the system altogether. In fact, he repeatedly used the term “generous” to describe retirees’ benefits throughout his piece. However, the average pension payout in Colorado is just $35,268 per year, a figure that falls thousands of dollars short of the Economic Policy Institute’s annual cost-of-living estimate of $43,280 for Denver County. PERA participants do not contribute to nor do they receive social security, so the singular income stream from retirees’ pensions appears modest at best, and not as overly generous as Mr. Wright would have you believe. He also claims that benefits include, “maximum annual payouts reaching 100 percent of an employee’s highest average three years of salary.” While true, this statement is misleading as Mr. Wright fails to include the nuanced requirements exclusively for PERA members who have worked in the public-sector for 41 years or more and who retire over the age of 65.
While the state of Colorado can skip pension payments, public employees must continue to contribute a minimum of 8.5% of their income to their retirement with each and every paycheck. They show up to teach schoolchildren, maintain public roads, and protect the safety of the community every day. So Earl Wright and the Koch brothers might feel like essential employees don’t deserve a secure retirement, but communities in the Centennial State might disagree. Pensions help to recruit and retain staff such as teachers, police officers, public works, firefighters, and other workers who provide critical services. In Colorado, they provide an economic impact of $7.26 per dollar invested by taxpayers into the defined-benefit system. Public employees are there for you every day, let’s let them keep the benefits they deserve.