Earlier in June, PERA Interim Executive Director Ron Baker sent a letter to Colorado’s Congressional delegation asking that they withhold support from potential legislation that could undermine public pension recovery efforts and recent pension reforms in Colorado and around the country.

Over the past eight years, Rep. Devin Nunes (R-CA) has introduced legislation known as the Public Employee Pension Transparency Act (“PEPTA”). Rep. Nunes recently asked each member of Congress through a “Dear Colleague” letter to co-sponsor similar PEPTA legislation this session.

In his letter, Baker outlines a number of reasons why PEPTA is concerning for public pension plans in general and for Colorado PERA specifically.

• The legislation would require public employee plans, including PERA, to report their pension liabilities and assets using an assumption that their investments will only earn the U.S. Treasury bonds interest rate. PERA’s $49 billion trust fund is a diversified portfolio of stocks, bonds, real estate, private equity and other assets. Historically, these investments have earned a rate in excess of the legislation’s artificial benchmark. Any states and local governments associated with public plans that did not comply with this requirement would be stripped of their ability to issue federally tax-exempt bonds.
• PEPTA is based on an assumption that many state and local retirement plans are headed toward insolvency and don’t share meaningful information about their financial condition. Each year, PERA produces a Comprehensive Annual Financial Report, a voluminous data source available online. Further, PERA reports to three (soon to be four) legislative oversight committees during the interim session and the regular legislative session.

The letter also notes that PEPTA would not lower taxpayer costs, increase transparency, expand accountability, or improve understanding of state and local government retirement plans.

PERA staff will continue to monitor the progress of PEPTA and other federal legislation that could impact public pension plans or PERA members. PERA’s letter to Colorado’s Congressional Delegation is available here.