What Will SB1 Cost You?

This static example shows what a retiree with a $1,000 monthly benefit will lose in the future under Senate Bill 1. If your gross monthly benefit is $3,000, multiply all dollar amounts by 3, etc. For an interactive spreadsheet of your own, e-mail a request to saveperacola@gmail.com. Remember, the 2.0% is a maximum. The amount could be lower for three years after PERA experiences a negative investment return.

If you are a DPS division retiree, click here.
If you are a PERA retiree from any other division, click here.

19 Responses to What Will SB1 Cost You?

  1. Pat says:

    My spouse has a retirement benefit coming from COPERA and I participated in a private employer (Fortune 500 copmany) pension plan. In comparing the COPERA vs the private pension, a few things jumped out: 1) COLA vs no COLA and 2) Pension Multiplier of 2.6 vs 1.7 and 3) backing of pension payments.

    We both feel very fortunate to have pensions – a real blessing and a benefit quickly disappearing for younger workers.

    But when I started to compare the two, it really struck me how generous the COPERA benefits are compared to private pensions (and there are very few out there). The combination of the COLA benefit and the higher pension multiplier translates to a 50-100% improvement in pension benefits offered by PERA vs our private pension.

    Then there is the issue of who is backing the pension payments. Private pensions are covered by PGBC insurance, but for those who have experienced this (i.e. some friends at United Airlines), they will tell you the PGBC coverage in company bankruptcy was a fraction of what they expected.

    The point of all of this is that COPERA pension benefits are really quite good when compared to what is out there. The question is, can they continue to offer this into the future.

    • Kevin says:

      I understand what Pat is saying, but it is that type of argument that reveals why the middle class is losing ground so quickly in America. So I’d like to make some points to refute Pat’s reasoning:
      A. This is not a battle between government & non-government employees. My heart goes out to anyone who lost their pension or had their pensions severely reduced. That’s not right for any hard-working citizen to have their pension cut once they’ve already retired.
      B. PERA pensions are funded by the employees…PERIOD. A portion of that comes DIRECTLY out of the employees’ monthly paycheck. Yes the employers pay into the system, but that is always at the cost of employee salary increases. So, in the end, it comes out of the PERA employees pocket. So PERA is funded by employee contributions, not some faceless government entity.
      C. To say that taking the promised COLA benefit of a PERA recipient is somehow justified because another group of retirees got their pensions pilfered is counter-productive. I guarantee you, while these hard-working middle-class workers (both PERA & other pensioners) are getting their retirement funds pilfered, the top 5% of earners are constantly seeing their wages, fringe benefits and retirement incomes go up … drastically.
      D. The PERA system was solvent and thriving for decades. Then we had a couple recessions and the funds took a (temporary) hit. SB1 made MANY adjustments to deal with this. Some of them may prove to be a good idea. But it’s NEVER fair or prudent to drastically cut someone’s retirement benefits once they’ve already retired. That’s absolutely no different than if I owe a $350,000 mortgage and then I get my wages cut and tell the lender, “Oops. Now I can only pay you $150,000. I hope that’s okay.” No court in the land would back you on that type of a deal. If you have a contract, you must honor it. The state of CO had a contract w/ it’s PERA retirees that stated that once you retire, your benefits cannot be changed. If they unilaterally come in and change those benefits, they are breaking the contract … plain & simple. Plus, recessions end & the markets return. It’s poor policy to base fiscal decisions only on the bad times. There was a 3.5% ceiling on what PERA retirees could make, even when the market was making above 20%. The same should hold true for the low end of a retiree’s COLA. When the market hits some bad months, if a retiree is promised (contractually) that their benefits include a 3.5% COLA, then that contract should be honored and their COLA should not go below 3.5%. Otherwise you get a severe ratcheting effect that requires hard-working middle income earners to go below the poverty level in their senior years.

  2. Maria Cristina Aguilera says:

    I also want to thank you for keeping up the fight! Because my PERA pension isn’t keeping up with rising living expenses I am now having to work part-time, which I’m actually enjoying, but it really rubs me the wrong way that our Democratic governor is trying to strip us of our benefits!

  3. John Kiljan says:

    Get out your wallets. PERA plans to delay restoring vested COLA’s as long as possible.

    In case you missed it, in PERA’s latest Retiree Report, Meredith Williams is quoted as saying, “. . . the legislature was well within its legal authority to enact the changes included in the package. PERA’s attorneys will vigorously argue this in court. We anticipate that the final resolution to the lawsuit will occur in the Colorado Supreme Court and may take up to five years.”

    And why not drag it out as long as possible? Billions of dollars are at stake here and if PERA loses, it can still win a lot. It is looking like the courts will not order catch-up payments for those lost five years.

    Even better for PERA, it is the retirees who will be funding the legal costs of PERA’s appeals. Meanwhile, the cost of the defending against PERA’s appeals will have to come from individual contributions to organizations like SavePERACola.com.

    –John Kiljan

    • saveperacola says:

      You state that “It is looking like the courts will not order catch-up payments for those lost five years.” We are unaware of any basis for this statement, as Judge Hyatt has so far only issued one ruling…on dismissal of claims. It is way too early to speculate on any eventual settlement or court award. Supporters of Save PERA COLA, and their legal team, are a tenacious group who will not be swayed by the prospect of a lengthy court case.

  4. Richard says:

    Perhaps instead of stripping everyone’s yearly increase (and by the way I think people could swallow a 2% increase to help out in the short run but in actuality we are getting 0% increase) PERA should think about capping the amount someone can retire with. These $100,000+ yearly pensions leaves a bad taste in everyones mouth (except those of you receiving them).

    • Martha says:

      Not only are we getting 0% increase, our health insurance coverage (for which I am very grateful) has gone up again so we are rapidly going in the hole! The increases, as promised to me (us) when I(we) retired, were the only way I (we) could stay even with the increases in just the daily living expenses. I am outraged at what has been done to us!

    • Thomas says:

      Richard: It appears that you believe all retirees are not equal. I, for one, believe each retiree should recieve exactly what was promised at the time of retirement regardless of the amount. Retirees did not set the policies under which each retired, so hope you re-think your comment and support all retirees in this legal battle. We are all in this battle together regardless of the actual benefits recieved.

  5. Gary says:

    First of all , I THANK YOU , for defending our rights as retirees and future retirees and trying to uphold the State & Federal constitutions . I can’t understand how some of the individuals in this section think we are abusing the system . Should we not win this lawsuit what are they going to do when they retire and the state goes back on their word again because NOW it would be lawful . Can they not read between the lines and see that THEY are next. I worked for the State of Colorado , not PERA ! The State is obligated to fund its system to give us a retirement we both agreed upon.. When they haven’t put one dime in our coffers (PERA) for eight years I believe we have a serious credibility issue with the State.. I recently read in the Post that they have not paid their share of medicaid for three years. Some doctors are not taking medicaid patients because they are not receiving payment for services. I sincerely believe that more people should support this lawsuit and contribute accordingly or roll-over and let the State have its way with your purse & billfold.. As a final thought I find it incredible that the state can offer all these “grants” when they say the tax coffers are empty and they can’t pay our retirement and fail to keep their word and the law regarding our benefits that they promised to all of us .. YOU NEED TO LISTEN VERY CAREFULLY TO THE WORD OF A POLITICIAN ! Anyway , some of them !!!

  6. Young Coloradan says:

    I understand that you feel cheated by the State for not fulfilling its contractual obligations. That being said, as a young taxpayer, I would ask what you possibly hope to gain by winning this lawsuit? Are you really willing to run PERA into the ground (bankrupt) in order to maintain your 1.5% additional COLA? Because that is the choice that you are making… Perhaps you don’t realize that the State is quite literally bankrupt?

    You’ll only have yourselves to blame when there is no more money left, and the State is left to choose between funding PERA and paying for active teachers. I’ll leave you to guess who will win that battle.

    • saveperacola says:

      By law the state of Colorado and its “instrumentality” PERA cannot go bankrupt as some municipalities have done. There are alternatives to abrogating contracts such as targeting a stable 80% funding level (the industry norm) rather than 100%, selling pension bonds in order to have the state pay its full share of employer contributions, and amortizing the debt over 40 years rather than 30. PERA has created a level of anxiety in its members in order to sell its package of cuts to all of them. Your “Hobson’s choice” of either funding PERA or paying active teachers is not a realistic scenario. You and others must ask yourself this question: “Do you believe the Colorado and U.S. Constitutions must be upheld?” If not, then other contracts will be ignored and greater peril is forthcoming this nation than a retirees’ lawsuit.

    • Thomas says:

      Perhaps you have missed the elephant in the room. I have believed for a long time that the eligible retirement age should be similar to social security which is now 67 years old for someone retiring today. By changing the date on which retirement can be drawn to match social securtiy I feel that most of the funding problems would be solved and the taxpayers would be on equal footing with state retirement plans.

  7. Steve Schroeder says:

    As a current state employee I have to say 3.5 down to 2%, big deal. You received every salary survey over the course of your career, every step increase, and every COLA. You bought years when the idiot Owens’ administration was giving them away and still you hold your hand out and cry for more.

    Current employees don’t have steps at all. Have a never funded Pay for Performance system, see Idiot Owens again. We have not seen a COLA in 3 years and are not likely to for at least two more, plus a 2.5% reduction of the state contribution to PERA. Money out of my pocket into yours.

    Now you ask me to carry you unharmed until you die. Is there anything else current state employees can sacrifice to make you more comfortable? My god you are looking at a 1.5% reduction in your COLA how can you bear it.

    • saveperacola says:

      Thank you, Steve, for eloquently pointing out exactly how state (and other) employees are and have been underpaid. We endured that too. We do not agree that we’re asking you to carry us–that’s the state’s responsibility to pay its legal contracts in full.

  8. taxpayer says:

    i really feel for you guys but times are tough and these outlandish pensions are unreasonable and unsustainable. everyone in the private sector has taken a big hit and you will to or they simply will run out of money, plain and simple. I would love to fund you lavish retirement but with the economic slowdown its just not it the cards. sorry

    • saveperacola says:

      We disagree that a $2850 (average) monthly pension that was funded by employee and employer contributions plus investmet returns is lavish. Rather, it was earned as deferred compensation and contractually must be paid. In a defined benefit pension such as PERA’s, which is an instrumentality of the state, the pension fund managers make the investment decisions and accept the risks and rewards on behalf of the state. In a private sector 401K fund, the individual employee makes investment decisions and personally accepts the risks and rewards. This is a crucial difference many overlook.

  9. Sara Borst says:

    I will happily notify leadership of two retirement organizations, the Colorado State Patrol and the University of Colorado retired staff employees, that it is crucial for retirees to visit this website for an honest look at what each of us has to lose, not only now, but beyond the current losses defined in Senate Bill 10-001. We must support this effort to restore our VESTED 3.5 COLA benefits.

  10. Dennis Burr says:

    Thank you for fighting the fight for all of us!! Historically, the cost of goods and services increase annually. The COlA was established specifically to assist retirees on a fixed income. We no longer have earing power, but we continue to have increased annual cost of living obligations. I am willing to do my part by sacrificing the COLA for 2010 but thereafter we must retain the annual COLA at 3.5% as established in our retirement benefits package as promised when hired. Surely there must be some sanity out there in political-ville. Please correct this injustice to the fixed income people who have served this great State!

  11. Nancy Higgins says:

    We are both retiree’s under PERA and thank you so much for helping us retain our Cost of living benefit.

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