March 09, 2015 10:15 AM UTC

Crowder Smacked By Retirees For Anti-PERA Vote

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• by: Colorado Pols

As the Pueblo Chieftain’s Ryan Severance reports, Sen. Larry Crowder is under fire from constituents after voting with fellow Republicans to make undesired changes to the Colorado Public Employees Retirement Association (PERA):

State Sen. Larry Crowder, R-Alamosa, said Saturday that he voted for Senate Bill 80 because he is concerned about the future of the Public Employees’ Retirement Association and being able to maintain it and believes this piece of legislation would help strengthen and save it.

“We can go along and say there’s no problem, we can put our head in the sand and say there’s no problem or we can take a stand for PERA,” Crowder said. “In my opinion, what we are attempting to do is save PERA, not destroy it, but doing nothing I think destroys it.”

SB80 is a measure that passed the Senate last month with all 18 Republican senators voting for it and all 17 Democrats opposing.

SB80 would let PERA members choose a defined contribution plan, such as a 401(k) plan, instead of the traditional defined benefit pension plan. Currently, only a small group of state employees such as state legislators can enroll in the defined contribution plans. Crowder said only state employees hired after May 2, 2009, would be affected by the bill.

Colorado’s PERA trust fund has already been reformed at the expense of public employees. 2010’s Senate Bill 1 reduced the amount contributed by the state to the PERA fund and increased the contribution of employees. As a result, PERA is on a long term course to be fully funded within 40 years. Republicans led by Treasurer Walker Stapleton have consistently “concern trolled” PERA’s solvency, even as the fund has outperformed its benchmarks in recent years. Stapleton’s remarks in August of 2013 were a good example:

PERA’s strong return on investment last year, nearly 13 percent, made up for the anticipated shortfall in revenue and actually reduced the unfunded liability by $800 million.

Those predictions assume an average 8 percent return on investments.

Stapleton said that number is unattainable in the new reality of the stock market.

We hope Stapleton is picking investments at his other job as a financial manager better than he speculates about PERA’s returns, because the stock market has surged upward since he said this–and PERA has returned an average of 9.4% over the last 30 years.

So what does Crowder mean by this “destroying PERA” stuff? Back to the Chieftain:

The vast majority of people who attended the meeting were PERA members opposed to SB80, citing they only want PERA to be a defined benefit and not a defined contribution.

“I planned for it, I used the rules that were given to me to plan for my retirement and that was exactly what I did,” said Carole Partin, a retired Pueblo City Schools (D60) middle school teacher. “Part of that plan is I’m going to have this much money every month from my retirement so if that dries up or if that even gets cut it affects my life greatly because that was the plan I made for me and my family.”

Senate Bill 15-080 would “allow” most PERA employees to choose a defined contribution plan instead of defined benefit. Defined benefit retirement plans have largely disappeared from the private sector, having been replaced by 401(k) defined contribution plans that cost employers less and shift the investment risk to retirees. In practice there’s little incentive for Colorado public employees to choose defined contribution plans, so this legislation instituting them “optionally” is widely perceived to be a slippery slope to mandating them in the future.

In addition to the many teachers and other public employees in Crowder’s district, the major prison complexes in Canon City and Florence lie just to the north of SD-35. Employees and retirees from the corrections system are a potent political force in this region–and gave Republicans like Keith Swerdfeger a good reason to vote against legislation to weaken PERA benefits.

Larry Crowder, a Democratic Senate target in 2016, might come to regret voting the other way.