Republican-Led Pension Rescue Signed Into Law
DENVER — Monday’s signing into law of Senate Bill-200 — a bipartisan public pension rescue plan that Republicans made a top priority for the 2018 session — marked the capstone of an extraordinarily productive and successful legislative session for Senate Republicans, who began the year promising big things and delivered on virtually every one of them, despite the challenges presented by having to operate in a politically divided Statehouse.
Few at the outset gave a pension reform measure co-sponsored by Republican Senators Jack Tate (R-Centennial) and Kevin Priola (R-Henderson) much chance of success, given how deeply vested many Democrats and special interests are in maintaining the financially unsustainable but politically popular status quo. But by sticking to their guns and consistently making the case for why painful but necessary action on shoring-up the financially troubled pension fund could no longer be delayed or deferred, Republicans eventually won over enough Democrats to get SB-200 over the finish line.
Tate called the bill’s signing a ‘bipartisan victory,” which it was. But the most game-changing elements in the bill simply wouldn’t be there if Republicans hadn’t put the issue on the front burner, declared pension reform a top legislative priority this session, and goaded or convinced reluctant Democrats to go along. Tate singled-out State Treasurer Walker Stapleton for “helping to create a sense of urgency that brings us here today,” and thanked Senate President Kevin J. Grantham (R-Canon City) and Majority Leader Holbert (R-Parker) “for the trust and confidence they placed in me.”
Tate summarized the aim of the pension rescue plan as follows: “We had to stop digging the hole while we are trying to fill it,” said Tate, “and avoid kicking the can down the road to a future generation.” SB-200 accomplishes the goal, explained Tate, by establishing a new retirement plan design for new employees, amortizing the debt service over 30 years, including automatic adjustments as a hedge against future fluctuations in cashflows and including provisions that will improve PERA’s transparency and oversight.
The bill’s prime co-sponsor, Kevin Priola (R-Henderson), expressed confidence that this PERA fix will succeed where previous reform efforts failed. “I believe that SB-200 will work where the 2010 fix failed,” Priola said after the signing. “The most important benefit of SB -200 is that it maintains the state’s good credit rating and will save taxpayers money in the coming decade. I’m proud of our bi-partisan work to restore PERA’s solvency.”
The primary beneficiaries of restoring and protecting the financial health of PERA are its current and future retirees, because financial solvency is the only sure guarantee that those future benefits will be there,” said Tate. And taxpayers will benefit because the state’s bond rating won’t continue to suffer as a result of mounting unfunded pension obligations. The financial exposure of taxpayers will be minimized, in case of a future liquidity crisis.
While SB-200 marks a major step forward in terms of restoring PERA’s long-term solvency, Tate cautioned that keeping the fund on a steady trajectory toward self-sustainability “will require continuous tending in the years to come.”