KCOL Mornings with Jimmy Lakey, Victor Mitchell, May 17, 2017
Station: KCOL, 700 AM
Show: KCOL Mornings with Jimmy Lakey
Guests: Mitchell, Victor
Link: http://600kcol.iheart.com/onair/600-kcol-mornings-40396/
Date: May 17, 2017
Topics: PERA, Reform
We have a problem with PERA – the Public Employees’ Retirement fund. What are we going to do about that, sir?
You know one of my opponents claims it’s a major crisis. I don’t believe it’s a major crisis. It’s certainly a problem. I mean, we have — in the big picture, the fund has about $40 billion of assets. It’s paying out about two-and-a-half billion dollars a year in benefits. So, it’s fully funded for the next 30 years even with a 0% return. Obviously, it has never returned anywhere near that. But the benefits are, bottom-line, simply just too generous. We’re paying people 75% of their last three years’ average wages. And that should be changed to a 10 year average instead of a three year average. In addition, we have got to create incentives where people leave the state workforce, that it doesn’t create a burden on PERA. Right now, it has perverse incentives. We want to encourage people to go into state government, work for a few years, and then go back into the private sector. We have exactly the opposite types of incentives today. But I don’t believe PERA is in crisis. Ninety percent of the benefits that the PERA pays out stays in Colorado. About 10% of our workforce – of our beneficiaries — receive all of their retirement benefits through PERA. People that receive PERA do not receive Social Security. So, I don’t believe we should be politicizing it. Certainly, it has been a broken system from a standpoint that the benefits are too generous and the incentives are perverse. But it’s not – I don’t believe it’s in a state of crisis.
