Reality: The state’s public pension finances, while improved by both 2010’s Senate Bill 1 and unusually strong investment returns, remain precarious and worrisome for PERA members.
While Senate Bill 1 was a step toward long-term sustainability, it significantly increased the financial burden on public entities like school districts, straining the rest of their budgets. Public employer contribution rates are substantially higher than they’ve ever been before and that reduces funds available for public services.
To illustrate, Colorado Springs District 11 budgeted $95 million for teacher salaries in 2013-14. Given current contribution rates (17.45%), the district must pay $16.6 million into the pension fund on their behalf. This high payment rate means lower teacher salaries, higher school fees for families, and/or fewer books and supplies in the classroom.
If, instead, the state and its school districts implemented a smarter retirement structure, the district could hire 207 more teachers or give each of the 2,000 district teachers a $3,315 per year raise, while still providing retirement benefits to district employees.