DID THE COLORADO GENERAL ASSEMBLY ACTUALLY REQUEST THAT COLORADO PERA MAKE RECOMMENDATIONS TO ADDRESS THE DECREASE IN PERA ASSETS IN 2009?
OR, DID PERA LOBBYISTS PUT THIS LANGAUGE INTO LAW TO PROVIDE COVER FOR A PREMEDITATED BREACH OF PENSION CONTRACTS?
Admittedly, my trust in Colorado PERA has worn
Nevertheless, given: Colorado PERA’s track record in its attempt to escape its contractual obligations,
- its apparent indifference to all moral, and legal restraints,
- its disregard for an on-point Colorado Attorney General opinion,
- its disavowal of unmistakable, adverse legal authority,
- its cavalier abandonment of the rule of law,
- its creative interpretations of the term “fiduciary duty,”
- its habits of deception and demonstrated desire to mislead,
- its lack of good faith and fair dealing with PERA pensioners,
- its eagerness to “change the ground rules in the middle of the game,”
- its use of trust fund beneficiary assets to finance litigation to breach the contracts of those beneficiaries,
- its use of trust fund beneficiary assets to finance PERA propaganda, as well as political, and lobbying campaigns to breach PERA pensioner contracts,
- its unabashed manipulation of elected officials to achieve desired policy outcomes,
- its summary rejection of legal, prospective, “less drastic” alternatives to the breach of pensioner contracts (that have been adopted across the nation),
- its hypocrisy in placing a 100 percent funding threshold into pension reform legislation in light of its own past policies of underfunding the pension,
- its complicity in creation of the “problem” it now uses to justify pension contract breach,
- its ridiculous boasts of “transparency,”
- its willingness to use a position of power and trust to take earned benefits from elderly, powerless pensioners,
- its historical failure to emphatically and regularly implore the General Assembly and other PERA-affiliated employers to meet their annual required contributions,
- its disingenuous characterization of market volatility as a rationale for pension contract breach,
- its employment of the complex and confusing nature of public pension administration as a means to mislead,
- its construal of what is in essence a “crime” as something laudable . . . a “model” for other states,
- its desire to inflate away legitimate government debts through seizure of contracted COLA benefits,
- its attempt to shift the public debt onto the backs of a relatively small group of pensioners,
- its pride in having successfully breached pensioner contracts,
- its use of tactics to breach contracts that shock the conscience,
- its casual preference to welch on the public debt, and most reprehensible of all,
- its betrayal of the trust of PERA pensioners who held up their end of the bargain,
. . . given the countless misdeeds of Colorado PERA that we have documented here, I do not believe that raising legitimate questions regarding the motives of Colorado PERA’s board members and administrators is unwarranted.
2010 PERA Board: We had to breach contracts due to the market downturn.
Meredith Williams, Colorado PERA’s former Executive Director assured PERA retirees in the past that market volatility has no impact on their contracted pension benefits:
“The value of your PERA benefit is based on highest average salary and years of service (a “defined” formula) and does not fluctuate based on market performance.”
And yet again in 2010, State Treasurer and PERA Board member (at the time) Cary Kennedy tells us that SB 10-001 was enacted as a result of market volatility:
“Responding to this unprecedented drop, some states, including Colorado, took steps to shore up the solvency of their pension funds.”
The Colorado PERA Board claims credit for SB 10-001 as well as for the “100 percent” actuarial funded ratio threshold in SB 10-001:
Colorado PERA, “The Colorado PERA Board’s recommendation largely became SB 10-001.”
From the PERA website:
“The work of the Colorado PERA Board culminated in the crafting of Senate Bill 10-001 (SB 10-001.) The Colorado PERA Board supported the recommended bipartisan changes to the bill by Senate President Brandon Shaffer and Senator Josh Penry since the changes still accomplished the Colorado PERA Board’s goal of reaching 100 percent funding levels for each of Colorado PERA’s divisions in 30 years.”
Again, will the members of the PERA Board please explain how the decision to place a 100 percent actuarial funded ratio in SB 10-001 was reached in light of the PERA Board’s historical policy of capping the actuarial funded ratio of the PERA Trust Funds at a 90 percent level? Did no board member take note of the hypocritical nature of this recommendation? It has historically been Board policy to maintain a degree of PERA pension underfunding (10 percent), and yet it is now Board policy to breach retiree contracts to the point that a 100 percent actuarial funded ratio is achieved. As we have seen, the 1999 George K. Baum study performed under the auspices of Colorado PERA (it’s on PERA letterhead) for State Treasurer Mike Coffman asks:
“Why does PERA appear to have a policy to keep a 10% unfunded liability?”
Colorado PERA’s propaganda has emphasized that the Colorado Legislature requested that the PERA Board of Directors make recommendations to shore up the PERA trust funds. I ask if this Colorado PERA assertion is an attempt to mislead.
Colorado PERA went so far as to emphasize the General Assembly’s “legislative mandate” in a Response Brief submitted to the Denver District Court:
“By LEGISLATIVE MANDATE the PERA Board extensively studied the underfunding and consulted with its members . . . before proposing a solution to the General Assembly.”
I ask: Did Colorado PERA plant this request language into SB 09-282 at the end of the 2009 legislative session in order to lend a patina of legitimacy to what was in fact a premeditated attempt to breach pension COLA contractual obligations?
Recall Senator Lundberg’s statement on the Senate floor during the SB 10-001 debate: “This bill is a deal that was cut before this body met.”
Was Colorado PERA’s ostensible, impartial examination of pension reform options in 2009 in reality an elaborate ruse constructed by PERA lobbyists to add legitimacy to a process with a predetermined conclusion? To falsely portray a preordained conclusion to breach pension COLA contracts as the result of an extensive, deliberative process?
We should know the answers to these questions. (If Colorado PERA is such a “transparent” organization as it boasts, why do we not know the answer to these questions?)
I wonder, did the request for a PERA study actually come from the Colorado General Assembly? Was this request the product of SB 10-001 co-prime sponsor Senator Josh Penry’s mind? Did he conceive this idea to request PERA recommendations? Or, was this idea planted in the Penry brain by PERA’s lobbyists?
After all, if you intend make extreme recommendations . . . that the State of Colorado, and PERA-affiliated employers breach their contractual pension obligations, would it not be useful to later claim that the state Legislature requested that bold recommendations be made?
That such recommendations should be sufficiently extreme to restore the PERA trust funds to a 100 percent actuarial funded ratio? (In spite of the fact that the PERA Trust Funds had visited this lofty 100 percent perch only twice in its 81-year history? And, that the PERA Board had historically sought to cap the PERA Trust Fund AFR at a 90 percent level?)
Would that not provide useful cover? ”They told us to make the recommendation!”
Where was the scheme to breach PERA contracts actually born? Will we ever know?
Does the genesis of SB 10-001′s COLA theft provisions lie in the minds of a pension administrator? Or, in the hopeful heart of a self-interested lobbyist?
Did the PERA Board of Trustees conceive the idea to take contracted COLA benefits? If so, which PERA board member gets the credit? Or, was the idea to breach pension COLA contractual obligations brought to the PERA Board by an outside organization? A public sector union lobbyist perhaps?
Well, it should be possible to discover the answer.
In 2009, the Colorado General Assembly enacted legislation (SB 09-282) to merge Denver Public Schools with Colorado PERA (specifically, to merge the assets and liabilities of Denver Public Schools into Colorado PERA.)
A provision of SB 09-282 required that the PERA Board of Trustees submit recommendations to the Colorado General Assembly regarding methods of responding to the decrease in the value of the association’s assets on or before November 1, 2009.
Here’s the language in the bill:
24-51-211, C.R.S. (2) ON OR BEFORE NOVEMBER 1, 2009, THE BOARD SHALL SUBMIT SPECIFIC, COMPREHENSIVE RECOMMENDATIONS TO THE GENERAL ASSEMBLY REGARDING POSSIBLE METHODS TO RESPOND TO THE DECREASE IN THE VALUE OF THE ASSOCIATION’S ASSETS, INCLUDING REAL ESTATE, PRIVATE EQUITY, AND OTHER INVESTMENTS, TO DECREASE THE AMORTIZATION PERIOD OF EACH DIVISION OF THE ASSOCIATION AND TO ENSURE THAT EACH DIVISION OF THE ASSOCIATION WILL BECOME AND REMAIN FULLY FUNDED.
Note that this language asks for “possible methods” to respond to the decrease in the value of PERA’s assets. The General Assembly did not ask that the PERA Board dictate a plan that would breach PERA’s contractual pension obligations. Implicit in the request from the General Assembly was the fact that the requested “possible methods” would be constitutional.
On April 21, 2009, Senator Penry, the co-prime sponsor of SB 10-001 amended SB 09-282 on the floor of the Senate.
His prepared amendment to the bill required the PERA Board to make recommendations to the Legislature regarding “possible methods” to respond to the decrease in the value of PERA’s assets. His amendment required that this report be provided to the Legislature by September 1, 2009. Two days later, Senator Sandoval amended the bill (SB 09-282) to move the deadline for submission of the report from September 1, 2009 to November 1, 2009. (The PERA Board wanted more time? It looks like the PERA Board may claim some ownership in the statutory language requiring the “study.”)
Questions for Senator Penry: Did you originate the idea to require the PERA Board to make recommendations to the General Assembly regarding possible methods to respond to the decrease in PERA assets of your own accord? Or, did you offer this amendment on behalf of a PERA lobbyist? Another lobbyist? Another legislative member?
The drafter of SB 09-282 was a lawyer from the General Assembly’s Office of Legislative Legal Services. Her name is Nicole Myers.
Questions for Ms. Myers: Who asked you to draft the amendment requesting that the General Assembly make recommendations regarding methods to respond to the decrease in PERA assets? A lobbyist? A PERA lobbyist? Did a PERA lobbyist make this request on behalf of Senator Penry? Did a PERA lobbyist provide a draft of their desired language in this regard? Please check your records.
It would be interesting if, after years of emphasizing that the Colorado General Assembly requested that the PERA Board of Trustees make recommendations to address the decrease in PERA assets, it turned out that it was in fact PERA’s lobbyists who actually put this language into SB 09-282. It would be interesting to learn if this language was placed in SB 09-282 in order to provide cover for a premeditated attempt to breach PERA retiree contracts.
Questions for Senator Sandoval: Did you decide to move the deadline for the PERA Board to report out by two months of your own accord? Or, was this a request from Colorado PERA lobbyists?
It would be worth listening to the recordings of hearings on SB 09-282 by the House and Senate Finance committees. (For that matter, it would be worth listening to all of the committee discussion from 2009 on PERA bills adopted or postponed indefinitely that year.)
Here are a few excerpts from a summary of the Senate Finance Committee hearing on SB 09-282 on April 14, 2009:
Mr. Williams responded to questions about the contribution rates for the retirement plans. He stated that the PERA Board is committed to presenting a proposal to the General Assembly that addresses retirement benefit issues for Colorado PERA.”
Ms. Kennedy continued discussing the timing of when to bring the DPS system into PERA’s plan. She also responded to questions about the management of the current pension systems and retirement benefits. Discussion ensued about solvency issues.”
This fact jumps out:
On April 14 at 3:28 PM, Meredith Williams (Colorado PERA’s Executive Director at the time) testified to the Senate Finance Committee that “the PERA Board is committed to presenting a proposal to the General Assembly that addresses retirement benefit issues for Colorado PERA.”
Meredith Williams made this statement one week BEFORE the requirement to report to the General Assembly was even in the bill.
That requirement was placed in the bill on the Senate floor one week after Meredith William’s testimony (on April 21, 2009.)
I suppose that listening to the tape of this bill hearing before the Senate Finance Committee on April 14, 2009 might provide some insights.
Alternatively, we could put the question to Senator Penry, or bill drafter Nicole Myers, or Senator Sandoval.