The Colorado House passed an amended version of a pension bill slated to resolve the state’s $32 billion deficit.
In a 10-3 vote, the bill, Senate Bill 200, passed in the House Finance Committee Monday evening.
As per the measure, the state will pay an annual $225 million into the pension system, with the cost-of-living increases for retirees declining from 2% to 1.25%. The retirement age will also be lowered from 65 to 60.
An adjustment mechanism which affects contributions and benefits has also been retained to stop the pension from falling into despair again.
A Senate version of the legislation proposed an additional 3% of public employee paychecks to go toward shoring up the pension system. The House committee removed that clause, instead opting the money come from the state budget each year. The annual budget funds will come out of future salary increases or other state budget money.
The bill comes at a time where the $49 billion Public Employees’ Retirement Association’s unfunded liability has the potential to lower the state’s bond ratings and take funding from the general budget that would otherwise go to transportation and education.
Although the debate lasted more than four hours, lawmakers aren’t thrilled with the results.
“Everyone isn’t happy,” said bill co-sponsor and finance committee Chairman Dan Pabon, a Democrat. “In fact, I think there’s enough testimony you heard to see everyone’s a little unhappy and that’s how you know we might have found the right balance.”
According to the Durango Herald, Republican Kevin Van Winkle said assuming the economy and state budget would be able to afford putting that much funding into the system per year—let alone during a recession—was like “looking at the economy through rose-colored glasses.”
Another change made to the measure was giving future employees the option to move their benefits out of their current plan to a 401(k)-style retirement plan, as House leaders did not find the alteration necessary for fixing the troubled pension system.
According to The Durango Herald, the bill’s next step is for a conference committee to work out a compromise for both chambers to vote on before the General Assembly adjourns on May 9.