Well, now that the 2012 campaign season is (finally!) over, I hope that everyone’s blood pressure is lowering and returning to normal. But I hope we all know that even though the Presidential debates and campaign ads won’t be lambasting our every nerve in the media for a while, the behind-the-scenes governmental efforts are never really “done” at any level.
Colorado’s legislative session doesn’t officially convene until January 09, 2012, but Terry Campbell, your lobbyist for the ACSPP, is still providing his industrial knowledge, countless hours of research, and effective communication to gain momentum and respect among legislators in our fine state. Especially through out the ever-changing political and economic climate around us, we will continue to keep you informed and up to date during the next session as best we can, because upcoming legislation involves topics that directly affect you. So as always, we welcome you to start the conversation: please visit, like, comment, and discuss on our Facebook page to see the latest.
ACSPP Directors & Staff
Now without further ado…
Lobbyist Report November 7th, 2012:
We have received the details of the Governor’s budget request as it applies to the salary survey and merit pay increases for Troopers. The blended percentage rate for Trooper increases will be 24.6%. The minimum range rate will be moving to 5,143.00 and is resulting in Troopers at the lowest pay level receiving a monthly salary increase of just over $976.00 to meet the new range minimum. We are continuing to look at merit pay increases and the current details are that a Trooper with a performance rating of 2 will also receive a minimum of $93.00 per month in merit pay. It’s important to remember that these increases are limited this year by the 6% HUTF growth limit for the department’s budget. This will leave more work to do in the next budget cycle to get members’ salaries back to the market standards.
On November 5th, 2012, the PERA Board of Trustees met to complete an actuarial assumptions workshop. This year’s evaluation of the actuarial assumptions focused on the assumed rate of return of the retirement trust fund. The workshop was designed to give the Board of Trustees the latest and greatest information from the experts in the actuarial field.
Several hours of presentations were made to the Board regarding the latest actuarial experience studies, capitol market assumptions, analysis and catalog of historical economic data. In addition, the board studied a new dynamic modeling that is based upon historical and forecasted asset returns.
Most large institutional investors like PERA do these types of evaluations every three to five years. One of the conclusions reached in this workshop was, “If we review assumptions every year it’s like jerking the wheel every 100 yards to try to keep in the middle of the road.” (Cavanaugh Macdonald Consulting, LLC.) But because of the political environment and critics of Colorado PERA, the Board of Trustees and staff feel they need to invest their time doing their due-diligence. This exercise has proven to be valuable in providing solid information to all interested parties that PERA has made very conservative and reasonable assumptions. The recommendation for the assumed rate of return by all of the national experts still remains at the 8%. Conclusions were that all the demographic and economic assumptions used in the annual valuation, and for projections, are long term in nature and should not be overly influenced by short term expectations. The focus is on funding, and that is a long term focus. Buck Consultants concluded, “The current discount rate of 8.0% remains reasonable.”
The board is expected to decide this month if there is a need to change from the current rate of 8%. It does not appear, if you consider the advice of these national firms, that it will be difficult to justify any change to the rate of return assumption.
We are working hard on getting a handle on the lay of the land and will be contacting new legislators. It will be important to make sure we establish good working relationships with our new representatives. We may be calling on you, our members, for help in your area with this task. More to come.
Thanks for your continued support!
It’s an honor working on your behalf,