Posted: Aug 17, 2010 6:35 AM by Bea Karnes, News First 5
Updated: Aug 17, 2010 6:50 AM
Colorado's state pension fund is back on track toward solvency after state lawmakers became the first in the nation to cut retiree benefits to prevent its pension system from going broke.
Thomas Cavanaugh, an actuary for Cavanaugh Macdonald Consulting, told lawmakers Monday that they would have to spend 40 percent of state payroll if the system had gone bankrupt.
Under the new law, retirees got no cost of living increase this year instead of the normal 3.5 percent increase. Next year, they would get the lesser of inflation or 2 percent and, after that, annual increases could be no higher than 2 percent.
The pension system covers 450,000 state workers, teachers and local government employees, as well as lawmakers.