March 1, 2012
(Denver) – Rep. Daniel Kagan got into it with state Treasurer Walker Stapleton today over a Republican effort to weaken PERA, the state Public Employees’ Retirement Association.
Stapleton was testifying before the House Finance Committee in favor of HB12-1142, sponsored by Rep. Brian DelGrosso (R-Loveland). The bill would give all employees covered by PERA the right to opt out of the standard “defined benefit” pension plan and choose a “defined contribution” plan, shrinking the assets of the standard plan and reducing the rate of return on its investments.
“Would you like to see us offer a choice even if we knew that it would increase the unfunded liabilities of PERA?” asked Rep. Kagan (D-Englewood), a member of the committee.
“Sure,” Stapleton responded. He added that reducing PERA’s solvency is “not a happy consequence, but more important is giving people the choice to determine their own retirement futures.”
“I am shocked,” Rep. Kagan replied, “that you as the treasurer of the state of Colorado would say, as you just said, that to you the concept of giving the consumer choice is more important than making sure that PERA is fully funded.”
State law (CRS24-36-113) specifies that the state treasurer shall “secure the maximum rate of interest consistent with safety and liquidity.” It makes no mention of employee choice. As treasurer, Stapleton is a member of the PERA board of directors and has a fiduciary responsibility for its assets.
The bill was approved by the Finance Committee on a 7-6 party-line vote.
Earlier today, the committee gave the same narrow approval to HB12-1150, which would reduce PERA benefits for all new state employees. A third GOP bill, increasing retired state employees’ mandatory contributions to their health insurance, was withdrawn last week by its sponsor, Rep. Chris Holbert (R-Parker).