Monday May 4 update

The bill to merge the Denver Public Schools Retirement System into the state Public Employees’ Retirement Association was approved by a 51-14 House vote Monday morning.

Since there were no House amendments, the bill now goes to the governor.

Text of Friday May 1 story follows

The proposed merger of the Denver Public Schools Retirement System into the statewide Public Employees’ Retirement Association received preliminary House approval late Friday morning.

Some Republicans expressed concern that the merger will leave taxpayers statewide on the hook for under funded big-city pensions, and that perhaps the larger problems of PERA should be addressed first.

The bill contains guarantees that DPS will remain solely responsible for the $800 million on debt it acquired in the past to strengthen its pension system.

The recession has severely dented the reserves of both PERA and DPS. PERA officials are preparing an analysis of the system for presentation to lawmakers next fall, along with recommendations for reform. Many experts believe the current system is “unsustainable” and that contribution increases, benefit cuts and other major changes have to be made in public employee pensions.

Denver is the only school district in the state with its own pension plan; employees of all other districts belong to a schools section within PERA. They’ve been several abortive attempts to merge the plans, driven by the problem that the separation makes it unattractive for many Denver teachers to move to other districts or for mid-career teachers to move into DPS, because benefits can’t be transferred.

DPS leaders feel that makes it even harder for them to get good teachers into struggling schools.

The Denver plan is better funded than the state plan, but Denver spends a relatively high amount per teacher on pensions.

The key element of SB 09-282 brings Denver retirees and teachers into PERA as a separate unit. An important amendment added in the Senate Finance Committee specifies that neither DPS nor PERA will be liable for the other’s prior liabilities.

In addition to providing pension portability for teachers who move in and out of DPS, supports say the merger will provide operating efficiencies, give DPS retirees a better health plan and benefit from bringing non-teaching DPS workers into the system.