Reality: The large unfunded liability and uncertain financial future of Colorado’s retirement system expose PERA members, state and local governments, and other taxpayers to significant risks.
As can be seen in the chart to the right, the state has underfunded PERA over the last several years resulting in the unfunded pension liability growing to $25.8 billion. This shortfall in pension funding is greater than double the state’s yearly revenue. This poses a significant risk to PERA members’ retirement security and the state’s overall fiscal health.
In addition, any plan that requires decades to pay off the state’s billions of dollars in unfunded pension liability creates the risk of future underfunding by policymakers who may face the temptation of putting off future PERA payments to cover other short-term needs.