Colorado House Democrats on Monday offered a counterproposal to a Republican plan to shore up the state pension that would largely shield public workers from the immediate costs of reform.
The changes offered in the House Finance Committee by the Democrats and would eliminate a proposed employee contribution hike and replace it with a $225 million taxpayer contribution that would increase annually with payroll. It would also eliminate a GOP plan to offer more public workers the option to enroll in a defined contribution plan, similar to a private sector 401(k).
But in a somewhat surprising concession to conservatives, the opening proposal from top Democrats would retain cuts to retiree benefits approved by the GOP-led Senate, which were deeper than cuts endorsed by the state's pension board.
The changes proposed to Senate Bill 200 won over the support of teachers and other public employee unions, but are sure to face opposition from conservatives, some of whom have insisted they will not pay off Public Employees' Retirement Association's debts with additional taxpayer dollars.
Because of the ideological split in Colorado's legislature, it will take a bipartisan compromise for any pension changes to become law. Senate Republicans voted for a budget package that included a $225 million earmark for the association, suggesting it could pass by a majority in both chambers if lawmakers can find common ground on other points of disagreement, such as the 401(k)-style option.
Dozens of public workers, retirees and interest groups spoke at Monday's committee hearing on a day where hundreds of teachers flocked to the state Capitol to protest low pay and proposed cuts to benefits.
Margaret Bobb, a science teacher at East High School in Denver, said she favored eliminating the proposed defined contribution option because it would provide a less secure retirement for any future employees who choose it. She said she chose a teaching career and d she accepted lower pay than other jobs in exchange for a guaranteed pension in retirement.
But while a number of current public employees and the unions that represent them said they would accept cuts to retirement benefits, several retirees said limiting cost of living increases to 1.25 percent annually was unacceptable.
"How in good conscience can the legislature ask retirees to receive benefits (that grow) below the inflation rate?" asked Larry Robbins, a retired public worker.
Retirees with the pensions now receive 2 percent annual raises, down from the 3 percent they received before the last pension overhaul in 2010. The national consumer price index has averaged about 2 percent inflation since 2000, according to the Bureau of Labor Statistics.
Like prior plans offered by Senate Republicans and the state pension board, the proposed changes would seek to pay off the estimated $32 billion in unfunded benefits within 30 years. The bill would also automatically adjust benefits and contributions if the system's finances veer significantly off course.