Last week, the Colorado General Assembly added 31 brand-new lawmakers, Democrats and Republicans, to the legislative roster. Unquestionably, these new state legislators should have unfettered access to information published by the General Assembly relating to the major issues it faces. Moreover, as citizens of Colorado we should have confidence that information produced by the General Assembly will never be censored, or suppressed for political purposes. The Legislature includes members and represents Coloradans of all political persuasions. As you shall see, my confidence in the impartiality of the Colorado General Assembly as an organization has suffered lately.
Some background. In 2010, the Colorado Legislature adopted a bill to reform the largest public pension in the state, Colorado PERA. The bill that put these reforms into law was Senate Bill 10-001. This particular piece of legislation is among the most controversial measures enacted by the Colorado General Assembly in its history, and is currently the subject of litigation. Enactment of the bill resulted in an immediate lawsuit by Colorado PERA retirees against the State of Colorado and the pension administrator Colorado PERA for breach of contract.
Subsequent to the enactment of SB 10-001, staff attorneys at the General Assembly published a memorandum explaining the legislation and providing important background information relating to Colorado PERA’s financial condition. This 2010 memorandum provides a comprehensive overview of the bill, SB 10-001, and places the funded ratio of the Colorado PERA trust funds in an historical perspective. The memorandum presents funded ratio statistics (provided by Colorado PERA) for the 40-year period previous to the breach of PERA pension contracts in 2010. (At the end of this article I will elaborate on the importance of seeing PERA’s financial condition from an historical perspective.)
Since 2010, Colorado PERA retirees have relied on this memorandum to explain the impact of the measure, SB 10-001, on their contracted retirement benefits. Until recently, this document was readily available on the website of the Colorado General Assembly. Now, it can be located only through a Google search. Rather than being suppressed, this memorandum should be carefully studied by all new members of the Legislature. Thirty-one new members of the Legislature will remain ignorant of one of the most pressing matters facing the State of Colorado due to the suppression of this critical information.
Why is the censorship of this information alarming to Colorado PERA retirees? It is important because many PERA retirees consider this 2010 memorandum a “smoking gun” document. The memorandum reveals that, at the time of the Colorado General Assembly’s breach of contract in SB 10-001, the actuarial funded ratio of the Colorado PERA trust funds was a mere 8 percent lower than the average PERA funded ratio over the prior 40-year period . . . certainly not a “crisis.”
The memo demonstrates that no “actuarial emergency” existed that would justify the state’s breach of PERA public pension contracts in 2010. Further, the memorandum is important since it is the only easily available source of this critical information. The memorandum assists PERA retirees in making their case that the Legislature’s breach of public pension contracts in 2010 was not actuarially or legally necessary.
Has this 2010 Colorado Legislative Counsel memorandum “Colorado PERA 2010 Reform Legislation and Historical Funded Status” been buried by the Colorado Legislature due to its relevance to the PERA retiree lawsuit? or for political purposes? The fact that ready access to a memorandum addressing some of the most controversial legislation ever adopted by the General Assembly has been eliminated (to the legal advantage of the State of Colorado) really does not pass the “smell test.”
What are the policies of the Colorado General Assembly relating to suppression of its own publications? What are its policies relating to the suppression of information published by the Colorado Legislative Branch after this information has entered the public domain? Did a state legislator, the attorney who wrote the memorandum, or perhaps a state administrator order suppression of the document? Is such activity acceptable in Colorado?
The following page (see link) on the General Assembly’s website purports to provide the Legislature’s publications relating to the pension administrator Colorado PERA, and yet the memorandum addressing the most important PERA legislation adopted by the Legislature since the creation of Colorado PERA 81 years ago, SB 10-001, is inexplicably missing. The one source from which Colorado PERA members, retirees and employers can see Colorado PERA’s funded ratio in an historical perspective in nowhere to be found. The single legislative publication that comprehensively reviews one of the most significant and controversial acts of the Colorado General Assembly in decades has disappeared.
From the General Assembly’s website:
“This page provides information regarding the general organization and operations of state government, capital construction, and the Public Employees’ Retirement Association (PERA).”
Take a look at this page. The memorandum has vanished.
The 2010 PERA memorandum is not to be found in any location on the website of the Colorado General Assembly. The website’s search function is of no assistance in locating the document.
In my opinion, some person wishes to deny ready access to this information to members of the Colorado Legislature, PERA members, retirees and employers.
Also, particularly damning is the fact that the comprehensive 2010 memorandum addressing SB 10-001 has apparently been replaced by a “scrubbed” PERA memorandum in which the information regarding Colorado PERA’s historical funded ratio has been deleted. The “scrubbed” document is available on the website of the Colorado General Assembly here:
I will now explain in greater detail why the missing 2010 PERA memorandum is important to Colorado PERA retirees. Page 3 of the 2010 memorandum includes a graph which plots Colorado PERA’s “actuarial funded ratio” (AFR) over the last 40 years. At the end of 2008, the combined AFR of the PERA trust funds stood at 69.8 percent. Since the defendants in the case Justus v. State (Colorado PERA and the State of Colorado) argue that their breach of public pension contracts was “actuarially necessary,” it is critical that Colorado courts see the PERA trust fund’s 2008 AFR of 69.8% in an historical perspective. During the 40-year period, 1970 to 2009, the PERA “actuarial funded ratio” ranged from a low of 54.5 percent in 1973 to a high of 105.2 percent in 2000. The average actuarial funded ratio over this 40-year period is 78 percent. The 2010 PERA memorandum reveals that, at the end of 2008, the PERA actuarial funded ratio of 69.8% was mere 8.2% lower than the average PERA actuarial funded ratio over the 40-year period. At the end of 2008, PERA’s actuarial funded ratio of 69.8 percent was 10.2 percent below an 80 percent actuarial funded ratio, considered “well-funded” by the firm Fitch Ratings, and 0.2 percent below the level considered “adequately funded” by Fitch Ratings. In a 2011 Fitch Ratings report, Fitch notes that a 70% actuarial funded ratio for public defined benefit pensions is considered an “adequate” actuarial funded ratio.
Here’s a link to the report:
Essentially, the Colorado General Assembly is seeking to breach its contractual public pension obligations at a point in time when its pension administrator, Colorado PERA, was adequately funded according to Fitch Ratings. Further, during an eleven-year span, from 1970 to 1981, Colorado PERA’s actuarial funded ratio was actually lower than it was at the end of 2008, and yet there was no PERA campaign during those eleven years to take vested, earned, accrued, contracted PERA retiree pension benefits. At the time of the breach of retiree pension contracts in SB 10-001, the difference between the Colorado PERA actuarial funded ratio and Wilshire Associates average actuarial funded ratio for 57 state retirement systems was 3.1 percent. Should pension contracts for all of these 57 public pension plans be breached at this funded level? According to Colorado PERA and many state legislators, the answer appears to be “yes.”
Is it not curious that a legislative document, public information, that bolsters an argument contrary to the financial interests of the State of Colorado has conveniently disappeared from the website of the Colorado General Assembly? Is it simply happenstance that ready public access to information on the General Assembly’s website of critical importance to the plaintiffs, Colorado PERA retirees, has been eliminated? This possibility strains credulity.
In 2010, SB 10-001 did not pass out of the Legislature unanimously. Many members of the Colorado General Assembly believed that this legislation breached fully-vested PERA retiree pension contracts. State legislators who oppose SB 10-001 should not be denied access to legislative publications relating to the bill simply because it may serve the purposes of a few members of the Legislature.
The Colorado Independent Ethics Commission “has jurisdiction over all State executive and legislative branch elected officials and employees, and local officials and employees . . .”.
Although the 2010 Colorado PERA SB 10-001 memorandum has apparently been removed from the website of the Colorado General Assembly it can still (fortunately) be located via a Google search (for how long?) See this link: