Bills from the House are making their way over to the Senate.
One bill that I’m the Senate sponsor of has been quite controversial. House Bill 1248 is the second rendition of a bill that proposes changes to the board of the state public pension plan known as the Colorado Public Employees’ Retirement Association or PERA. The board currently consists of 15 members.
Being the sponsoring legislator in the second chamber means I’m more of a spectator to the process until the bill passes the House, assuming it does. Still, it’s my practice to be very familiar with a bill’s topic before sponsoring it. I’ve done a lot of research on the topic of public pension plan board composition and good governance practices. My aim with this bill is to support this important and weighty public resource and obligation with the best possible management for current retirees as well as generations of public employees yet to retire.
The bill isn’t an indictment of the current PERA board, staff or their past decision making — instead, it looks to the future. The bill seeks to improve upon a dire situation that faces all public pension plans and states across the country. There are long term funding issues with these plans and a serious lack of public confidence, even among some of the plan members. I hear, understand and share these concerns as expressed to me by my constituents, so I’m involved with this bill.
The first version of the bill, voluntarily dropped by the House sponsor, changed the board member composition so that there wouldn’t be a majority of pension beneficiaries on the board. We received lots of feedback on that dramatic of a change and the House sponsor reworked the bill so that there’d be an increase in board members who aren’t pension beneficiaries, but there’d still be a majority who do have that perspective and are elected by the pension’s various division members.
Now, under the current version, board members who aren’t pension beneficiaries would increase from three to six members and these gubernatorial appointees must bring to the board a skill set among various financial backgrounds. The bill specifically prevents a governor from stacking a majority of the board appointees from one party.
Deepening the board’s financial skills can help provide healthy pushback on key financial assumptions proposed by management and its advisors. Reducing the number with direct personal interest should also improve the confidence of those on the outside looking in at the pension’s management.
I supported the PERA reform bill passed last year and applaud the efforts of many who worked hard on that. However, last year’s bill is stuck in litigation. Whether it’ll survive the legal challenges as a hoped-for solution to PERA’s unfunded liabilities will be unknown for years as it’ll likely go to the U.S. Supreme Court.
In the meantime, I’ve an obligation to all of my constituents to see that PERA is as well managed as possible in these turbulent economic times.