Governor signs compromise on state pension fix |

Governor signs compromise on state pension fix

DENVER – Gov. Bill Owens signed a compromise Thursday that will cover a projected $11 billion shortfall in the state pension plan.Lawmakers agreed to change the makeup of the 16-member board, shrinking it by one member, to 15. Members of the Public Employees Retirement Association will make 11 appointments, the governor would make three, and the state treasurer would be a permanent member.The proposal will allow newly hired employees in higher education to choose either a new defined-contribution plan or the traditional defined-benefit plan.Defined-contribution plans allow workers to decide how their retirement money is invested but do not guarantee how much their pensions will pay. They generally cost employers less to fund than defined-benefit plans, which have fixed pension payments.Currently, only state government employees have the option of a defined-contribution plan.Public employees agreed to give up a portion of their raises over the next six years to help keep the plan solvent.State officials became concerned after the economy soured in 2001, hurting the plan’s investment portfolio.Edie Sonn, spokeswoman for the Colorado Coalition on Retirement Security, said the new law will protect PERA’s 68,000 retirees and 175,000 active workers in state and local governments”What it means for state employees is that their retirement is secure,” Sonn said.

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