Thousands of University of Colorado staff are bracing for the effects of an overhaul to the state‘s pension system that and Gov. John Hickenlooper signed into law Monday.
The bill cuts retirement benefits, raises employee and employer contributions and allocates $225 million a year in tax dollars to the Public Employees Retirement Association, or PERA. It raises the retirement age for future employees to 64 — from 60 for state workers and 58 for teachers — and lowers annual cost-of-living increases.
It also institutes a mechanism to if the pension‘s finances veer off course, and to allow future public workers to opt out of the pension and join a defined contribution plan, similar to a 401(k).
The changes were designed to stabilize and save the state‘s underfunded pension system. Proponents say the changes will restore PERA to full funding within 30 years and help the state avoid a possible credit downgrade, but critics argue they could strain some state employees, including the more than 5,000 PERA employees at CU Boulder, and retirees.
Dragan Mejic has been a CU instrument shop supervisor for more than 16 years. He works in a shop in the basement of the Jennie Smoly Caruthers Biotechnology Building on the CU Boulder east campus. There, among milling machines and precision welding tools, he works with graduate students on grant-funded research projects, helping them build specialized instruments and tools needed for their projects.
Mejic also is an executive board member of the Colorado Wins labor union and a candidate for the PERA Board of Trustees.
“It‘s a lot of mixed feelings about it,” Mejic said of himself and other staff at CU Boulder. “On the one hand, there‘s a sense of relief that the process has run its course. The fact that we had a split legislature agree to put additional money from the general fund directly into PERA was, really, the giant carrot that made all the rest of the changes palatable.”
The changes to PERA, he said, were not as bad for employees as they could have been.
Alan Slinkard, a CU project specialist in facilities management, said staff “breathed a sigh of relief” because the paycheck deductions were not as high as originally proposed and will be phased-in beginning next year, over a period of three years, so they have time to prepare their budgets.
However, Mejic said he worries most about those low-paid employees who are already struggling to make ends meet.
“I remember when I was first hired here 16 years ago,” Mejic said. “It was a struggle to get by on the bottom of the pay scale for even a position such as mine. I think about the people who are in much lower-paid positions, and I just don‘t really know how they survive in a state that is such an expensive place to live.”
Mejic said he loves his job, his coworkers and his department. He feels fulfilled, and he credits a dedicated group of professors for always acting as an advocate for him.
Still, he commutes from Brighton to work in the Boulder instrument shop. Some of the staff he knows who live in Boulder live in university-assisted housing, he said. Most commute from outside city limits.
Without the work of Colorado‘s unions — strategizing, lobbying and testifying at the Capitol — he thinks the changes would‘ve dug deeper into employees‘ pockets.
“Most of the time, we are fighting to just defend and hang onto what we have,” Mejic said. “There are really no big advances or big wins on the horizon for us. That‘s how it feels. But despite how small our state employees union is, I‘m proud of how effective we‘ve been and the things we‘ve been able to accomplish.”
The co-chairs of the CU Staff Council said much the same of the PERA changes and the anxiety they‘ve sensed on campus.
“We‘re very worried about retirees being inflated into poverty,” co-chair John Kelly said. “… We‘re looking at a potentially unsustainable way where people have to start preparing for poverty in their 70s, 80s and 90s.”
Co-chair Mirinda Scott added that staff have questioned whether the changes are the best way to address problems with PERA.
“There is a question in people‘s minds whether or not this is truly the best solution, but it seems like the only foreseeable solution,” Scott said. “There isn‘t a good option.”
‘We needed to do something‘
CU Staff Council last week hosted a town hall to explain the PERA changes to staff. Several dozen people attended, and another 100 or so watched online — a high turnout for such a town hall, Slinkard said.
PERA interim executive director Ron Baker and CU system chief financial officer Todd Saliman last Tuesday presented and answered questions to the group in a room in the Visual Arts Complex.
“We needed to do something,” Baker said to the assembled group. He later added, “We went down this process eight years ago, when we were in the financial crisis. We put a program together, and we thought that would put us on the path to full funding in 30 years. Well, things shifted.”
Saliman said PERA was a top priority for the CU system throughout the legislative session. He said that although CU did not have many lines in the sand, it worked to fix PERA and minimize the effects on employers and employees.
He applauded the effort, which he noted involved compromise and ultimately gained bipartisan support and support from some labor unions — the most notable exception being the Colorado Education Association, the state‘s largest teacher union, which .
“I hope we never have to come back and do this again,” Saliman said. “Hopefully this will be the last time.”