by Nicole Myers
The Police Officers’ and Firefighters’ Pension Reform Commission met once during the 2012 interim for an annual briefing from the Fire and Police Pension Association (FPPA) and to consider one bill recommended by the FPPA Board of Directors for introduction during the 2013 legislative session.
The Commission, composed of five Senators appointed by the President of the Senate and 10 Representatives appointed by the Speaker of the House of Representatives, is charged with studying and developing proposed legislation relating to funding of police officers’ and firefighters’ pensions in Colorado and the benefits administered by those pension plans. (Section 31-31-1001 (2), C.R.S.)
Dan Slack, Chief Executive Officer of the FPPA, and Kevin Lindahl, General Counsel of the FPPA, testified before the Commission. After giving a brief history of the FPPA’s statewide pension fund and describing the general duties and composition of the Board, Mr. Slack discussed the investment returns of the FPPA’s statewide defined benefit and statewide death and disability plans. He explained that based on recommendations from an actuarial experience study of the FPPA members, the Board recently reduced the assumed rate of return on investments from 8.0% to 7.5% and revised its post-retirement mortality tables to reflect the increased longevity of its retirees. In addition, Mr. Slack reported that the Board has discussed the need to reassess the cost of living adjustment for retired FPPA members and whether to increase FPPA member contributions.
Mr. Slack discussed the impact of the economic downturn on the pension funds administered by the FPPA. Despite a 29.4% decline on investment performance, as of January 1, 2012, the actuarial funded ratio of the statewide defined benefit plan is 96.4% and the actuarial funded ratio of the statewide death and disability plan is 114.6%. Mr. Slack concluded his presentation with a brief overview of the old hire plans and the state’s contributions to the old hire plans, which will continue through the 2018-19 state fiscal year.
Mr. Lindahl discussed, and the Commission approved, the Board’s proposed bill. The bill states that if an employer that is otherwise required to enroll its members under the statewide defined benefit plan or the statewide death and disability plan fails to properly do so, neither the FPPA nor the defined benefit system trust fund or death and disability trust fund, as applicable, is obligated or liable for any purpose to any person or employer arising from such failure.
Minutes, the FPPA’s annual report, the bill draft, and other materials from the Commission’s meeting are available HERE.