State

Jul 3, 2011 1:54 PM by AP Posted by James H Egbert

State pension projections too optimistic

DENVER (AP) - Some economists say Colorado's pension plan used unrealistically high investment returns when it projected it would be fully funded in 30 years.

The Denver Post reported Sunday the Public Employees Retirement Association assumes an 8 percent investment return. The newspaper quoted economists and financial advisers as saying 6.5 percent to 7.5 percent is more realistic.

The system covers 450,000 teachers, state and local government workers and lawmakers. It cut back last year amid warnings it would go broke in 20 years.

Retirees got no cost of living increase last year and future increases were capped at 2 percent. The retirement age for new employees rose from 55 to 60, and workers and government employers were required to contribute more.

The system's executive director says she's confident it will rebound.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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