Retirement insights from a Colorado PERA perspective

A distant view shows a mountainous landscape with sloping peaks, green trees in the foreground, and a cloudy sky above.

On January 11, the Colorado General Assembly will convene to begin a new legislative session. This will be the 141st time the state House and state Senate will meet in the state’s history, but as an old Capitol adage says: Legislative sessions are like snowflakes because no two are exactly the same. One hundred legislators—35 senators and 65 representatives—will meet for 120 days to introduce, debate, and vote on hundreds of bills.



As with any pending session, legislators and special interest groups have already outlined many of their goals. Unlike the gridlock we sometimes see in the halls of Congress, Colorado’s legislators will likely find significant common ground on the majority of the bills they will introduce. Here are a few of the issues legislators, media, and other stakeholders have identified as key going into the session:



The Budget



Colorado’s roughly $28.5 billion budget won’t be debated until later in the session, but the budget bill, known as the Long Bill, has already begun its process. Late last year, Governor Hickenlooper presented his office’s budget goals to members of the Legislature. This proposal is often seen as a starting point for the six members of the Joint Budget Committee (JBC) to consider when they begin to craft their own version of the budget—the one lawmakers will consider, debate, amend, and ultimately vote on during the session.



This year’s budget is already going to be a challenge for the General Assembly. Due to revenue forecasts and constitutional requirements, legislators are faced with <a href="https://content.copera.org/2017-legislative-session-preview/">a roughly $500 million shortfall</a> for the 2017-2018 fiscal year. Where the money will come from in order to close the expected gap will be the subject of a great deal of discussion and creative thinking. Last year, JBC members were able to close a smaller gap and the budget was passed into law with support from both sides of the aisle.



Will the <a href="http://denver.cbslocal.com/2016/04/19/colorado-budget-debate-taxes-refunds/">budget issue brought up</a> for the past few years—the reclassification of the Hospital Provider Fee into an enterprise in order to free up roughly $750 million from limits mandated by the Taxpayers’ Bill of Rights—come up again? Senate Minority Leader Lucia Guzmán (D-Denver) has indicated she would like to revisit the issue, but the incoming Senate President Kevin Grantham (R-Cañon City) has said the move is <a href="http://www.coloradoindependent.com/163248/hospital-provider-fee-dead-2017-transportation">“off the table.”</a>



Transportation



An area where legislators from the two parties are <a href="http://gazette.com/everyone-agrees-colorado-transportation-is-the-top-priority-but-how-is-the-fix-accomplished/article/1593929">hoping to find common ground</a> is increasing funding for roads, bridges, and transit. One of the possible solutions being proposed is the potential for more than $3 billion in bonds to be sold, with the proceeds being used to fund several currently unfunded transportation projects. The so-called “TRANs bonds” bill <a href="http://www.bizjournals.com/denver/blog/capitol_business/2015/04/exclusive-bill-to-raise-3-5-billion-for-highway.html">was introduced</a> in the 2015 legislative session, but lawmakers were unable to find consensus on the proposal and the bill died in the session’s final weeks. The bill was considered again in 2016 and met the same fate. Late last year, an <a href="http://www.cohousegop.com/approval-of-trans-bond-bill-moves-3-5-billion-in-transportation-funding-closer-to-reality/">interim transportation committee</a> gave its initial support for the proposal, but it was <a href="http://www.coloradosenate.org/single-post/2016/10/14/GUZMAN-STATEMENT-RE-TRANS-BONDS-PROPOSAL">unable to gain enough support</a> from leadership in both parties for a bill to coalesce prior to the start of the session.



Another transportation funding proposal that seems to have gained<a href="http://www.bizjournals.com/denver/news/2017/01/05/colorado-legislative-leaders-want-cooperation-but.html"> some initial bipartisan support</a> is a referred measure to raise the state sales tax with the proceeds directed toward projects like widening Interstate 25 between Monument and Castle Rock. A Colorado State Trooper’s tragic death on that stretch of highway last year brought renewed focus to the project.



Education



Some of the most contentious and complicated policy areas legislators will debate in 2017 will be education funding and compliance with a new federal education law passed in 2016.



School finance became one of the most thoroughly debated issues in the state in 2010, when the Great Recession forced lawmakers to make changes to the school funding formula in order to keep Colorado’s budget balanced. The so-called “negative factor,” which allowed lawmakers to fund schools at a level below the amount mandated by <a href="https://www.copera.org/2017-legislative-session-preview" class="broken_link">Amendment 23</a> (a constitutional provision passed by voters in 2000 that mandated the state to increase per-pupil funding for schools every year) has grown to roughly $800 million, and will likely grow more in 2017 <a href="https://twitter.com/ChalkbeatCO/status/818477686083362818">according to legislators</a>. Whether 2017 will be the year when this issue finally breaks through is unclear; although an informal group of lawmakers from both parties, led by JBC members Rep. Bob Rankin (R-Carbondale) and Rep. Millie Hamner (D-Dillon), have been working together over the last year to find a framework for a future solution.



Another important education issue will be how to comply with the Every Student Succeeds Act passed by Congress and <a href="http://www.nytimes.com/2015/12/11/us/politics/president-obama-signs-into-law-a-rewrite-of-no-child-left-behind.html?_r=0">signed into law</a> by President Obama last year. The new law replaces the Bush Administration-era No Child Left Behind legislation that was set to expire. A bipartisan <a href="https://www.copera.org/2017-legislative-session-preview" class="broken_link">interim committee</a> met last year to come up with a plan, and both education committees will be working to finalize their plans during the session.



Health Care



One of the biggest unknowns going into this session is how health care law will be changed by President-elect Trump’s incoming Administration and the GOP majority in Congress. With the <a href="http://www.reuters.com/article/us-usa-obamacare-mcconnell-idUSKBN14S0UT">likelihood of major changes or repeal</a> of the Affordable Care Act (ACA), Colorado legislators will be tasked with implementing any changes or overhauls of the law. That includes the expansion of Medicaid authorized by the ACA, which Colorado lawmakers approved in 2013. Roughly <a href="https://www.copera.org/2017-legislative-session-preview" class="broken_link">1.2 million Coloradans were beneficiaries</a> of Medicaid in 2015, so there will be lots of attention paid to any changes made federally and at the state level.



Construction Defects Reform



The issue of reforming the laws governing liabilities for homebuilders and legal recourse for homebuyers is once again headed for debate at the Capitol. Although leaders in both parties have identified the issue as a top priority for several sessions, the actual solutions <a href="http://www.bizjournals.com/denver/blog/capitol_business/2016/05/construction-defects-reform-talks-collapse-in.html">have fizzled</a>—either in committee or during negotiations prior to the bill’s introduction.



Incoming House Speaker Rep. Crisanta Duran (D-Denver) has been working closely with Sen. Grantham on the issue, and both have indicated the measure has legs this year. Duran specifically told audience members at a legislative preview event sponsored by the Denver Metro Chamber of Commerce that she looks forward to a “collaborative and productive” relationship with the Senate majority on a number of issues, including construction defects.



PERA



As of the writing of this blog post, there have not been any bills introduced related to PERA. But stay tuned because we have heard rumors of PERA-related bills for 2017. In the meantime, be sure to know <a href="http://leg.colorado.gov/find-my-legislator">who represents you in the Colorado General Assembly</a>.

2017 Legislative Session Preview

A digest of timely information and insight about finance, investing, and retirement.



<a href="http://www.bloomberg.com/news/articles/2016-11-10/your-retirement-under-president-trump" class="broken_link">Your retirement under President Trump</a>&nbsp;|&nbsp;<a href="http://www.bloomberg.com" class="broken_link">Bloomberg</a>



As a candidate, Donald Trump barely mentioned America’s retirement crisis. As president, he will have enormous power over the issue, bolstered by Republican control of the U.S. Senate and House of Representatives. From Social Security to rules impacting financial advisors to new proposals to reform 401(k)s, there are many ways Trump’s presidency could influence your retirement.



<a href="https://www.statnews.com/2016/11/11/retirement-aging-options/">I knew it was responsible to plan for my old age. So why did I keep crying?</a>&nbsp;|&nbsp;<a href="http://www.statnews.com">STAT</a>



A woman of a certain age, fearful of growing old and dying alone, had taken every ounce of courage to acknowledge that she wouldn’t be able to live on her own forever. But it was the responsible thing to do.



<a href="http://www.nytimes.com/2016/11/12/your-money/retirement-savings-problem-politicians-can-help.html">We have a retirement savings problem. Politicians can help.</a>&nbsp;|&nbsp;<a href="http://www.nytimes.com">The New York Times</a>



It should be easier to save for retirement. But about half of all Americans who work in the private sector do not have access to an employer-based retirement plan like a 401(k). Federal legislation to increase those numbers has not amounted to much. A requirement that employers siphon money out of every employee’s paycheck and put it into a retirement savings plan (unless the worker opts out) would both promote self-reliance and create a foundation for a safety net.



<a href="http://www.bloomberg.com/news/articles/2016-11-01/women-you-risk-a-ragged-retirement-if-you-re-counting-on-the-averages" class="broken_link">You risk a ragged retirement if you’re counting on these numbers</a>&nbsp;|&nbsp;<a href="http://www.bloomberg.com" class="broken_link">Bloomberg</a>



If you’re relying blindly on hallowed personal finance averages – planning for 40 years of work, saving 15 percent of salary – you could be in for a rocky retirement. Retirement advice is made to be tailored to our needs and the times. People often sit down to figure out how much they will need and assume they’ll spend 40 years in the workforce, from age 25 to age 65, more or less. That’s an outdated assumption, and women in particular need to look out.



<a href="http://www.wsj.com/articles/why-your-401-k-fees-arent-lower-1478488380">Why your 401(k) fees aren’t lower</a>&nbsp;|&nbsp;<a href="http://www.wsj.com">The Wall Street Journal</a>



With investing, avoiding mistakes often wins the day. If you cut fees to the bone, avoid complicated products and stick to a basic asset allocation through thick and thin, you’ll do better than most. Happily, it’s getting easier to take that simple approach. But low fees aren’t commonly associated with the go-to investment vehicle for millions of Americans – the 401(k) retirement plan. Indeed, 401(k)s and their menus of funds are so complex that employees investing in them incur administrative, record-keeping and adviser fees. [Read about <a href="https://www.copera.org/retirement-roundup-retirement-president-trump" class="broken_link">PERA’s low-cost supplemental savings 401(k) and 457 plans</a>.]



<a href="http://squaredawayblog.bc.edu/squared-away/wyoming-retirement-education-on-point/">Wyoming retirement education on point</a>&nbsp;|&nbsp;<a href="http://squaredawayblog.bc.edu/">Squared Away Blog</a>



Wyoming government has brought some 535 employees of the state’s executive, legislative and judicial branches into its retirement savings plan since July 2015 under a new policy of automatically enrolling each new hire. They are free to withdraw from the plan at any time, but only 15 of the 535 have done so. This technique, borrowed from behavioral economics, addresses the inertia that prevents many people from ever signing up to save in their employer’s plan. So why wait for them to join? Instead, Wyoming uses inertia to benefit state workers: when people are automatically enrolled, research shows, they tend to stay put and save. [Read more about <a href="https://www.copera.org/nobel-prize-puts-spotlight-on-behavioral-economics-retirement-plan-policy" class="broken_link">behavioral finance</a> and how inertia can help – or hurt – your retirement savings.]

Retirement Roundup: Your retirement under President Trump

2016 Colorado Ballot Issues

“Colorado lawmakers finish session with little progress on top issues.” &#8211;&nbsp;The Denver Post



“The 2016 Colorado legislative session may go down in history as the year of little change.” &#8211; Colorado Springs Gazette



“Divided Colorado Legislature wraps year of scant agreement.” &#8211; Fort Collins Coloradoan



The Second Regular Session of the Seventieth Colorado General Assembly has concluded, and as reported around the state, this session may be known more for what wasn’t passed, than what it accomplished.



Two bills on investment mandates



There were <a href="https://content.copera.org/2016-legislative-session-wrap-up/">two bills</a> introduced that affect PERA:



<ul>
<li>HB 16-1207: PERA Investments in Renewable Energy Companies – would have required PERA to invest at least one percent of new moneys each year in renewable energy companies.
<ul>
<li>PERA opposed</li>



<li>Bill defeated (11-0 in House Finance Committee)</li>



<li>Notable: Rep. Van Winkle (R-Highlands Ranch) stated in committee meeting that the bill “misses the mark in confusing whose money it is; it doesn’t belong to us to pursue a social agenda, it belongs to PERA members.”</li>
</ul>
</li>



<li>HB 16-1284: Concerning Divestment by PERA From Companies That Have Economic Prohibitions Against the State of Israel – requires PERA to divest from all companies that have economic prohibitions against Israel.
<ul>
<li>PERA opposed</li>



<li>Bill passed (54-10-1 in House; 25-9 in Senate; signed by Governor)</li>



<li>Notable: While the PERA Board voted to oppose this legislation, there was strong support behind it and <a href="http://www.jpost.com/Israel-News/At-the-state-level-US-legislators-tackle-BDS-head-on-453701" target="_blank" rel="noreferrer noopener">political headwinds</a> were too strong to stop it. Given the inevitability of this bill’s passage, PERA worked with the sponsors to ensure the bill’s requirements would be manageable to implement.</li>
</ul>
</li>
</ul>



What we learned this session



The need for education remains; only a handful of legislators who voted on <a href="https://www.copera.org/puerto-rico-and-pensions" class="broken_link">SB 1</a> in 2010 will still be in office when the next session begins in January 2017. And there are still audiences we haven’t reached with our messages of positive <a href="https://www.copera.org/pera-works-colorado" class="broken_link">economic impact</a> and the <a href="https://www.copera.org/retirement-roundup-best-places-retire" class="broken_link">independent studies</a> validating that PERA is more efficient and uses dollars more effectively than any other type of retirement plan.



What’s coming next



<ul>
<li>The 2015 <a href="https://content.copera.org/2016-legislative-session-wrap-up/" target="_blank" rel="noreferrer noopener">CAFR</a> is scheduled to be released by the PERA Board of Trustees on June 21.</li>



<li>We will continue to <a href="https://www.copera.org/peratour-resources" class="broken_link">monitor</a> proposed federal legislation and Colorado ballot initiatives of interest to our membership. (If you aren’t receiving the biweekly PERA on the Issues newsletter, please subscribe <a href="https://www.copera.org/pera-oversight-continues-between-legislative-sessions" target="_blank" rel="noreferrer noopener" class="broken_link">here</a>.)</li>



<li>PERA staff will once again travel the state this summer and meet with business and community groups, legislators, and Ambassadors. (Learn how you can become an Ambassador advocate for PERA <a href="https://www.copera.org/2016-legislative-session-begins-will-pera-be-discussed" target="_blank" rel="noreferrer noopener" class="broken_link">here</a>.)</li>
</ul>



Thank you



Your involvement and willingness to speak up on behalf of Colorado PERA is an essential part of our effort to protect the retirement security of Colorado’s largest workforce and to remain one of Colorado’s best investments.



<a href="https://peraontheissues.com/wp-content/uploads/2016/05/LegWrapUp-5-16-1.pdf">2016 Legislation Impacting Colorado PERA</a>

2016 Legislative Session Wrap-Up

Proposed federal transparency legislation (PEPTA) would confuse the facts.



Rep. Devin Nunes of California has reintroduced legislation (<a href="https://www.copera.org/proposed-legislation-would-confuse-the-facts" target="_blank" rel="noreferrer noopener" class="broken_link">H.R. 4822</a>) requiring public pension funds such as Colorado PERA to produce a separate set of financial reports. This would be in addition to all of the financial reporting and compliance such pension funds already provide to local, state, and federal governments and agencies.



For any public pension fund that did not provide this second set of financial reports, the proposed legislation would disallow issuing tax-exempt bonds. Most of PERA’s 500 affiliated employers issue bonds as a way to finance necessary capital projects, so this provision in federal legislation could curtail important bond-financed projects like roads and school construction.



This legislation, known as PEPTA or the Public Employee Pension Transparency Act, has been introduced several times recently, including by Rep. Nunes in 2010 and again in 2013. Similar provisions were also included in the Puerto Rico Assistance Act of 2015, despite the fact that they were not germane to the underlying financial concerns in Puerto Rico. (See <a href="https://www.copera.org/proposed-legislation-would-confuse-the-facts" class="broken_link">Puerto Rico and Pensions</a> on <a href="https://peraontheissues.com">PERA on the Issues</a>,&nbsp;for more information.)



PERA opposes this legislation and we urge you to use our <a href="https://www.copera.org/proposed-legislation-would-confuse-the-facts" target="_blank" rel="noreferrer noopener" class="broken_link">advocacy center</a> to contact your members of Congress and ask them to say &#8216;no&#8217; to PEPTA by declining to sign on as a co-sponsor.



More specifically, PEPTA would:



<ul>
<li>Burden state and local government pension plans, including Colorado PERA, by requiring an additional set of financial reports in addition to what is already required, such as standards set forth by the PERA Board of Trustees (Board) and the Government Accounting Standards Board (GASB). (<a href="https://www.copera.org/proposed-legislation-would-confuse-the-facts" class="broken_link">Read more</a> about how pension rules adopted by GASB have already enhanced pension disclosure.)</li>



<li>Require public pension plans to overstate their future liabilities by dictating that the second set of financials measure future liabilities using a rate of return linked to interest earned on Federal Treasury bonds. Such a low interest rate would make pension liabilities appear to be larger than even many of the most conservative actuarial forecasts. (Currently, the rate of return as dictated by the legislation is less than 3 percent, while the PERA Board, after considering information from investment and actuarial advisers, has set the current assumed rate of return <a href="https://www.copera.org/investments/investment-faqs" target="_blank" rel="noreferrer noopener">at 7.5 percent</a>.) Two sets of drastically different financial statements would also confuse the public, failing to provide any clarity or transparency with regard to public pension accounting.</li>



<li>Impose inappropriate, costly, and burdensome federal mandates while restricting state and local governments that cannot meet the requirements of the legislation from issuing federally tax-exempt bonds. This would divert taxpayer resources from other priorities, add red tape onto state and local governments, and overreach into the business functions of state and local pension plans that are neither funded nor operated by the federal government.</li>
</ul>



Over the last six years, PERA has taken significant steps to strengthen its long-term sustainability. <a href="https://www.copera.org/puerto-rico-and-pensions" class="broken_link">Landmark legislation passed in 2010 (SB 1)</a> required sacrifice from members, retirees, and employers in order to return PERA to long-term sustainability. The result? A $15 billion reduction of the unfunded liability to date. The proposed legislation would do nothing to improve the funded status of the plan, and would instead burden both taxpayers and pension plan administrators like PERA.



Already, PERA is subject to numerous comprehensive oversight and reporting requirements, including the significant pension disclosure standards recently required by GASB. Since January 2015, PERA has been the subject of <a href="https://www.copera.org/retirement-roundup-best-places-retire" class="broken_link">three independent studies</a> and in December 2015, PERA provided the Colorado General Assembly with a five-year report on the <a href="https://www.copera.org/puerto-rico-and-pensions" class="broken_link">impacts of SB 1</a>. Like many pension plans for public employees, PERA continues to be transparent and innovative, looking for ways to enhance what is already a strong and sustainable retirement plan for Colorado’s public workforce.



<a href="https://content.copera.org/proposed-legislation-would-confuse-the-facts/" target="_blank" rel="noreferrer noopener">Contact</a> your members of Congress now and ask them to oppose PEPTA legislation by choosing not to be a co-sponsor.



More information:&nbsp;<a href="https://peraontheissues.com/wp-content/uploads/2016/03/No-PEPTA-Letter-to-Congressman-Polis_031616-1.pdf">PERA Letter to Congressional Delegation</a>&nbsp;| <a href="https://peraontheissues.com/wp-content/uploads/2016/03/FiscalFacts2016-1.pdf">State and Local Fiscal Facts: 2016</a>

Proposed Legislation Would Confuse the Facts

Public retirement associations join elected officials, state and local governments to oppose pension requirements within Puerto Rico Assistance Act.



A broad coalition including public pension advocates, state and local government associations, employer groups, and elected officials has come out against proposed federal legislation, the <a href="https://www.copera.org/puerto-rico-and-pensions" target="_blank" rel="noreferrer noopener" class="broken_link">Puerto Rico Assistance Act of 2015</a> (S. 2381), because of a heavy burden the Act would place on public pensions.



Though the Act is primarily focused on unique concerns affecting Puerto Rico, it contains provisions that would impose a federal mandate on state and local government retirement systems that is not warranted and has not been requested.



The provisions included within the Act that would impact retirement systems “are conflicting, administratively burdensome and costly,” the coalition wrote to Senate Majority Leader Mitch McConnell.



Further, the groups wrote, “the provisions are not germane to the underlying legislation, nor do they protect benefits, save costs or improve retirement system funding.”



As the letter from the coalition explains, state and local government pensions have taken significant steps to strengthen their pensions and be sustainable over a long-term time horizon.



“Since 2009, every state has made changes to pension benefit levels, contribution rate structures, or both,” the letter says.



Read the <a href="https://peraontheissues.com/wp-content/uploads/2016/02/PPN-Letter-to-McConnell-on-S-2381-1.pdf" target="_blank" rel="noreferrer noopener">coalition’s letter</a> and review a fiscal fact sheet about state and local governments.



See also <a href="https://www.copera.org/puerto-rico-and-pensions" class="broken_link">Five Years After the Great Recession, PERA Continues Progress Toward Full Funding</a> to learn more about changes implemented by Colorado PERA since 2010.

Puerto Rico and Pensions?

A summary of proposed legislation affecting Colorado PERA. Check back often for new bills and updated status reports. Last updated: March 21, 2016.



<a href="http://www.leg.state.co.us/clics/clics2016a/csl.nsf/fsbillcont3/2C7764EA7A19783F87257F2400650443?Open&amp;file=1207_01.pdf" target="_blank" rel="noreferrer noopener">House Bill 16-1207</a>



PERA Investments in Renewable Energy Companies



HB 16-1207 requires that PERA, beginning January 1, 2017, and in each calendar year thereafter, ensure that, of the moneys that are not already invested by PERA, at least one percent of such moneys are invested in renewable energy companies. If PERA is unable to invest one percent of such moneys in renewable energy companies in any calendar year, PERA would be required to explain why it was unable to satisfy the requirement in the Comprehensive Annual Financial Report.



Sponsor: Rep. Paul Rosenthal (D-Denver)



Status: The bill was defeated in the <a href="https://content.copera.org/2016-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">House Finance Committee</a>&nbsp;(11-0) on February 24.



PERA Board position: Oppose



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<a href="http://www.leg.state.co.us/CLICS/CLICS2016A/csl.nsf/fsbillcont3/FFEE6B72C4AB699C87257F240063F4A6?Open&amp;file=1284_01.pdf" target="_blank" rel="noreferrer noopener">House Bill 16-1284</a>



Concerning Divestment by PERA From Companies That Have Economic Prohibitions Against the State of Israel



HB 16-1284 would require PERA to make its best efforts to identify all companies that have economic prohibitions against Israel, assemble those identified companies into a list of restricted companies by&nbsp;January 1, 2017, and to review the list of companies on a bi-annual basis. This bill is structured similar to the statute regarding <a href="https://www.copera.org/investments/divestment" target="_blank" rel="noreferrer noopener">PERA’s Sudan Divestment</a> requirements, and would require divestment of companies on the restricted list.



Sponsors: Representatives Dan Nordberg (R-Colorado Springs), Dominick Moreno (D-Commerce City), Lang Sias (R-Arvada), Lois Court (D-Denver), Brian DelGrosso (R-Loveland), Crisanta Duran (D-Denver), Justin Everett (R-Littleton), Alec Garnett (D-Denver), Daniel Kagan (D-Cherry Hills Village), Gordon Klingenschmitt (R-Colorado Springs), Tracy Kraft-Tharp (D-Arvada), Polly Lawrence (R-Littleton), Paul Lundeen (R-Monument), Dan Pabon (D-Denver), Brittany Pettersen (D-Lakewood), Angela Williams (D-Denver); and Senators Owen Hill (R-Colorado Springs), Leroy Garcia (D-Pueblo), Bill Cadman (R-Colorado Springs), Mark Scheffel (R-Parker), Larry Crowder (R-Alamosa), Kevin Grantham (R-Canon City), Chris Holbert (R-Parker), Michael Johnston (D-Denver), Jerry Sonnenberg (R-Sterling)



Status: Passed House Business Affairs and Labor Committee (13-0) on February 23, and Passed Third&nbsp;Reading in the House (54-10-1) on February 26. Passed&nbsp;Senate Finance Committee (5-0) on March 3, and passed Third&nbsp;Reading in the Senate (25-9-0) on March 9. Signed by the Governor on March 18.



PERA Board position:&nbsp;Oppose



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Previous legislative session summaries:



<a href="https://peraontheissues.com/wp-content/uploads/2016/02/legwrapup5-15_1-1.pdf" target="_blank" rel="noreferrer noopener">2015 Legislative Session</a>



<a href="https://peraontheissues.com/wp-content/uploads/2016/02/LegWrapUp5-14-1.pdf" target="_blank" rel="noreferrer noopener">2014 Legislative Session</a>

2016 Proposed Legislation Status

The Second Regular Session of the Seventieth Colorado General Assembly will convene on January 13, 2016.



Democracy is the foundation of our republican form of government. The input of citizens doesn’t stop at the ballot box, though. Understanding who your legislators are and how to contact them effectively can make you a truly active participant in the civic process.



PERA can help you become involved in the legislative process. Your voice matters to your elected officials, so don’t be afraid to speak out when they are considering bills that might help or harm retirement security for public employees. PERA’s new <a href="https://www.copera.org/proposed-legislation-would-confuse-the-facts" target="_blank" rel="noreferrer noopener" class="broken_link">advocacy center</a> makes it easy to find who your legislators are, and send them an email, call them, or even tweet at them.



Simple rules for contacting legislators



When contacting elected officials, always remember these simple rules for effective advocacy:



<ol>
<li>Be civil. Even when you don’t agree with your legislator, it’s important to voice those disagreements in a friendly, courteous manner. Elected officials are people, too.</li>



<li>Mention that you are a constituent. Legislators do care what people from all over the state think about an issue, but they pay closest attention to messages from people who live in their district.</li>



<li>Be original. Don’t cut and paste or use talking points. Legislators get thousands of emails every session, and when they get the same form email over and over again it can water down the message. Tell your own unique story. Where do you – or did you – work? For how long? What would happen to you if this bill became a law?</li>



<li>Thank them for their time. Whether you are meeting directly with a legislator, or just tweeting out a message to vote yes or no on a bill, it’s good practice to thank the legislator for listening to your concerns. Because the General Assembly is in session for just 120 days, legislators are often swamped with messages about dozens of bills, so thank your Senator or Representative for taking the time to listen to you.</li>
</ol>



The legislative process



The Colorado General Assembly meets from January until May to consider proposed legislation. Each introduced bill is assigned to a committee by either the Speaker of the House or the President of the Senate, and given a date to be heard. At a committee hearing, members can propose amendments to a bill to be voted on by their fellow committee members. Each bill is then put to a vote, and either passes on to another committee or the full legislative body, or is postponed indefinitely—meaning the bill is officially dead for the session.



Bills that pass through committees go to the full chamber. Members of the House or Senate are given the opportunity to debate the merits of the legislation, and offer any amendments. If a majority of members in the original chamber vote to support a bill, it starts all over again in the other chamber. Any disagreements between the two chambers on a bill are resolved in a conference committee. Once a bill passes both chambers of the General Assembly, it is then sent to the Governor to be signed, vetoed, or passed into law without a signature.



Visit the Colorado General Assembly <a href="http://www.leg.state.co.us/clics/cslFrontPages.nsf/HomeSplash?OpenForm">website</a> to search for current legislation.



When it comes to contacting your elected officials about a particular piece of legislation, it’s important to remember that the timing of your message is almost as important as its content. Committee hearings are the first opportunity citizens have to weigh-in on legislation. Before, during (and even after) a bill is heard, citizens can provide their input via phone calls, email, or testimony during the committee hearing. Citizens can also make a difference before bills are voted on in the full chamber. Finally, citizens have the opportunity to reach out to the Governor to give their say on whether a bill should be signed or vetoed.



Become an <a href="https://www.copera.org/2016-legislative-session-begins-will-pera-be-discussed" class="broken_link">Ambassador</a>



If you want to get even more involved, consider becoming a PERA Ambassador. Ambassadors are PERA’s volunteer advocates who form a statewide network of dedicated individuals communicating the value of PERA to the people in their communities. <a href="https://www.copera.org/2016-legislative-session-begins-will-pera-be-discussed" target="_blank" rel="noreferrer noopener" class="broken_link">Find out more about the Ambassador program</a>, and be sure to subscribe to the PERA on the Issues <a href="https://www.copera.org/pera-oversight-continues-between-legislative-sessions" target="_blank" rel="noreferrer noopener" class="broken_link">newsletter</a>.

2016 Legislative Session Begins – Will PERA Be Discussed?

On October 1, the <a href="http://www.ssab.gov" target="_blank" rel="noreferrer noopener">Social Security Advisory Board</a> (SSA Board) released a position paper describing a proposal to modernize the formula used to calculate Social Security benefits, “<a href="https://www.copera.org/correcting-the-math-on-the-windfall-elimination-provision" target="_blank" rel="noreferrer noopener" class="broken_link">The Windfall Elimination Provision: It’s Time to Correct the Math</a>.”



In the paper, the SSA Board recommends that beginning in 2017, Congress change the current <a href="http://www.ssa.gov/pubs/EN-05-10045.pdf" target="_blank" rel="noreferrer noopener">Windfall Elimination Provision</a> (WEP) formula to one that uses actual earnings data. The report states that data-based approach would be more fair for all workers and could be communicated to affected employees in a way that is more straightforward and easier to understand.



The position paper criticizes the current WEP formula, arguing that “it does not work as it should for people who work part of their careers in jobs not covered by Social Security.”



In 2017, Congress will have access to 35 years of data on earnings from covered and non-covered employment since WEP was implemented in 1983. A new formula could be applied to benefits of all retired worker and disabled worker beneficiaries newly eligible for benefits after December 2016.



Under this approach, a replacement rate would be calculated using both covered and non-covered earnings. Two workers with the same earnings, one from work that is all covered by Social Security and one from work that is only partially covered by Social Security, would have identical replacement rates of covered earnings, which is a fair outcome.



Representatives Kevin Brady (R-TX) and Richard Neal (D-MA) co-sponsored <a href="https://www.copera.org/best-of-pera-on-the-issues-2018" class="broken_link">Congressional legislation introduced earlier this year</a> that uses a proportional “Public Servant Fairness Formula” for beneficiaries with non-covered employment.



The Social Security Advisory Board recommends implementation of the new proportional formula. “Congress should change the WEP so that replacement rates are based on total earnings, regardless of whether they are from covered or non-covered employment,” the position paper states. “The process will appear to be and, in fact, will be more fair.”



The Social Security Advisory Board was created in 1994 when Congress passed legislation establishing the Social Security Administration as an independent agency. The seven-member bipartisan board advises the President, the Congress, and the Commissioner of Social Security on matters related to the Social Security and Supplemental Security Income (SSI) programs.



The SSA Board plans to release a future paper discussing the <a href="https://www.socialsecurity.gov/pubs/EN-05-10007.pdf" target="_blank" rel="noreferrer noopener">Government Pension Offset</a>.



PERA encourages members and retirees to let their elected officials at the federal level know how the WEP and GPO have or will impact them.



Read more about the proposed <a href="https://www.copera.org/best-of-pera-on-the-issues-2018" class="broken_link">WEP legislation</a> on PERA on the Issues.

Correcting the Math on the Windfall Elimination Provision

Our world has become increasingly complex and the big issues we face have no simple solutions. That’s especially true when it comes to the topic of retirement security. With all the news and commentary on the sustainability of public retirement plans, how are we able to discern the facts?



As typical consumers, most of us compare the features and prices of the products we purchase before letting go of our hard-earned dollars. But do we comparison shop and evaluate the “features” of the information we receive every day? Here are a few tips (and some caveats) on how to be a smart consumer of information.



Don’t believe everything you read or hear



We’ve probably heard this from our parents, but we need to practice it. Just because something is on the Internet, on TV or radio, or in the newspaper doesn’t mean it’s valid. This is especially true now that it’s relatively easy for anyone to have their “news” published online.



Consider the source



Here’s another bit of advice we all need to heed. Where was the information originally published? As the media industry has consolidated over the last decade, a lot of content printed in local newspapers and aired on evening news programs is originally from somewhere else. What do you know about the source? Who owns the original content? Keep in mind that the source of the information is a business after all, and as such, they are selling you a product. Is it something you want to buy?



Compare different “channels” for competing views on the issue



Whether you’re watching TV, listening to the radio, reading a newspaper in print, or reviewing information on your tablet or smart phone, you may want to see what others are saying about the topic. You might be surprised at how differently the subject is covered by different media outlets. The Internet makes this very easy to do, but always remember the first caveat: Don’t believe everything you read or hear.



Do your research



One of the more recent trends in media is for foundations, “think tanks,” and advocacy organizations to publish “news.” Again, here’s where the Internet is useful. Find out where a particular group gets its funding and ask similar questions of the funders. Do you share their world view? Do you know any of the people who sit on the board? Do they have an agenda? What are they selling?



Use perspective



As humans, we are highly motivated by our emotions. Advertisers, entertainers, and politicians know this. Is the information you are consuming pushing your hot buttons? If so, and you’ve considered the source, compared differing viewpoints, and done your research, it may be time to step away and put the information aside for a while. Or it could be time to become even more engaged with an issue, sharing your own opinion with friends and family, through social media or even a letter to the editor. Just be sure to reflect the perspective you’ve gained by thoughtfully evaluating the information at hand.



Become a critical thinker



If you adopt these practices, you will have all the tools you need to be a smart consumer of information. By thinking critically about complex issues including retirement security and the sustainability of public retirement plans, you will be better informed and better positioned to help others see your side of the story.



Consider becoming a PERA Ambassador



One of the benefits of being a <a href="https://www.copera.org/2016-legislative-session-begins-will-pera-be-discussed" class="broken_link">PERA Ambassador</a> is being among the first to hear directly from PERA on issues affecting our members. Ambassadors receive timely legislative updates, participate in exclusive telephone conferences with PERA executives, and have an opportunity to represent PERA in communities across the state. Our 800 ambassadors play a critical role in PERA’s strategy to communicate the value of PERA to Colorado, from submitting Letters to the Editor to meeting with legislators and other community leaders. Learn more about getting involved to represent PERA locally and being an informed consumer – and communicator – of PERA information.

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