Amy Oliver, Walker Stapleton, 9/21/2011

Station: KFKA 1310 AM

Show: Amy Oliver

Guest: Walker Stapleton


Date: 9/21/2011

Topics: PERA, transparency, rate of return, unfunded liability.

Stapleton: In the 1990’s you could purchase retirement years and people could purchase up to a decade or more of retirement years at approximately a fifth of the cost of those years. Meaning that there could be people in the system right now who are in their late thirties and early forties who where financially savvy at the time, I am not faulting them, this isn’t about assigning blame, its about being transparent about the liabilities…and fixing it. These people could be retiring or checking out of the system in a couple years in their mid forties or late forties and Colorado is essentially on the hook for the next thirty five or forty years to pay these people’s retirement. And our state is not in a position to afford it…

Stapleton: By their own estimates, there is a $21 billion unfunded liability. That means that if bills were due today, they would be $21 billion short…however, that $21 billion unfunded liability is predicated on an 8 percent return assumption… If is a 6 percent return, you take the $21 billion unfunded liability and you have increased it by 50 percent. So you are talking about a liability which is more than $30 billion…

Stapleton: So the question is, should the state of Colorado, or any state for the matter, be guaranteeing stock market risk with a system that is structurally backed up by taxpayer money. I believe strongly that it should not. And I believe the assumption made by these plans need to be conservative because these plans are backfilled by taxpayer money at the end of the day.