Tuesday, April 21, 2009


There is a bill going through the legislature this year that will force the Denver Public School Retirement System (DPSRS) to merge with Colorado’s Public Employee Retirement Association (PERA).

In the past, the legislation that has been passed just encouraged the two groups to merge. The last such legislation passed in 2008, but the two entities couldn’t come to an agreement on a merger, so this year the legislation just directs them to merge and designs the merger.

I guess the Colorado General Assembly knows best.

The hearing for the bill came through Finance Committee, lasted three hours, and had no testimony against the bill.

As a side bar, it is not at all uncommon for bills in finance to only have testimony in favor. A study a few years ago found that 95% of those testifying in Finance supported the bills. I think that’s a classic example of concentrated vs diffused interests. The concentrated interests always show up, after all, that’s how they get paid.

The fix is in on the bill and it is going to pass, but I voted against it.

I am positive that before ten more years go by, the taxpayers of the State of Colorado are going to have to pick up the tab for the unfunded liability that DPSRS has. It may not even be that long. The liability that the state already has for PERA is bad enough; adding to it is folly.

The other significant attraction for DPSRS is the ability to shift the blame for any future benefit cuts to those dirty rascals at the Capitol. It became apparent during the testimony that this is a significant benefit being sought by the folks from DPS. They know that benefits will have to be cut; they want to be able to blame someone else for it. “There are strength in numbers,” one witness said during testimony. I guess so.

At some point the Piper is going to have to be paid for these defined benefit retirement plans. Guess who gets to pay the Piper?

For the record, I signed up under the defined contribution plan that the State offers.

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