The State Legislature’s Joint Budget Committee reaffirmed its commitment to retirement security for public employees by denying a request to reduce contributions to PERA.
In an effort to reduce State spending and balance the budget, Governor Jared Polis had included in his budget proposal a plan to temporarily reduce contributions from employers in PERA’s State Division by 1%.
The Joint Budget Committee (JBC) met on February 4 to consider that and other proposals. After hearing hours of testimony on many competing interests, JBC members voted to deny the Governor’s request. With the vote, the Committee shows the Legislature remains committed to ensuring stable, reliable funding for PERA and a secure retirement for the hundreds of thousands of PERA members who have served our State.
There’s still a lot of legislative work that has to happen before the JBC finalizes its budget in the spring, and PERA On The Issues will continue to monitor the process throughout the session.
JBC moves to draft other PERA proposals
The JBC also voted to draft two legislative proposals that PERA developed to strengthen the Defined Benefit Plan’s financial position and reduce the likelihood of triggering automatic adjustments under the Automatic Adjustment Provision of 2018’s Senate Bill 200.
Those proposals are:
- Give PERA flexibility to allocate the State’s annual $225 million direct distribution to whichever division trust funds would most help minimize the likelihood of triggering automatic adjustments.
- Redirect a portion of employers’ health care trust fund contributions to help pay off pension liabilities.
Lawmakers have not yet formally introduced a bill to include either proposal.
Additional legislative activity
Work continues on other PERA-related bills that are making their way through the General Assembly.
On February 9, the House Finance Committee voted to postpone indefinitely House Bill 1062, which would have removed the state income tax deduction cap on income from pensions and other annuities. That means the bill will not move forward this session.
Three other PERA-related bills remain under consideration, including House Bill 1026, which passed the House Finance Committee and is now with the House Appropriations Committee. That bill would make two changes: Allow for limited purchases of service credit for periods of unemployment, and require all PERA employers to offer the PERAPlus 401(k) and 457 Plans to their employees.
