PERA’s benefit calculation method spurs debate at Capitol

A bill that would change the way retirement benefits are calculated for those who join the Public Employees Retirement Association (PERA) after Jan. 1, 2013, was given preliminary approval by the Colorado State House after a lengthy and partisan debate Friday.

Currently, benefits are calculated using the highest average salary from three years, but House Bill 12-1150 would increase the number of years used for the calculation to seven.

Last week’s debate lasted about an hour. Republicans argued the change is needed to ensure PERA’s future financial stability, while Democrats maintain the changes are unnecessary because of a 2010 law that revamped PERA.

Republicans say the bill would prevent “spiking” by employees who are paid high salaries later in their careers; Democrats say the bill punishes the average employee in order to potentially change the law for a few.

The bill awaits final approval in the House before it heads to the Democratic-controlled Senate, where it is expected to face a tough battle.

HB12-1150 is the first of several PERA bills to make it to a floor vote. Most of the bills have died in committee. Two bills are pending: HB 12-1142 would allow PERA members to enroll in the defined contribution plan instead of the defined benefit plan. Currently only new state and some new university employees may choose between the plans. HB 12-1179 would change the composition of PERA’s Board of Trustees.