DENVER (AP) — Colorado’s troubled public pension has been pulled back from the fiscal brink.
That was the key takeaway from Friday’s pension board meeting, the first since state lawmakers approved a sweeping rescue package in May that cut retirement benefits and increased contributions to shore up the fund.READ MORE: Evacuations Ordered For Sylvan Lake State Park Visitors, Some Eagle County Residents Due To Wildfire
This time a year ago, Colorado’s pension was among the worst funded in the country, sporting an unfunded debt of more than $32 billion and a 40 percent chance of running out of money to pay benefits, according to the board’s financial advisers.
The board on Friday released its annual financial report, which shows the fund’s fiscal stability has improved dramatically, although it will still take decades to pay off the debt owed to current and future retirees.
The unfunded debt fell to $28.8 billion — and would have fallen further had it not been for a surge in retirements last year. Thanks to a strong stock market, the pension also made 18.11 percent on its investments in 2017, more than doubling its 7.25 percent target.
The pension is now projected to fully fund the benefits owed to retirees within 30 years, a target long recommended by pension advisers across the country.READ MORE: How Cycling 29,029 Vertical Feet During 24-Hour Summer Solstice Ride Is Helping Fight Homelessness
While the pension’s long-term finances have stabilized, concerns remain.
This week, Fitch Ratings issued an advisory noting that Colorado and virtually all other major public pensions are banking on investment returns well above “the 6 percent level that Fitch views as reasonable.” If Colorado’s pension averaged 6 percent annual returns, it still wouldn’t be expected run out of money, but it would take 50 years to pay off its debt, according to the pension’s actuaries.
Another rating agency, S&P Global Ratings, improved the state’s credit outlook in light of the reforms, but it expressed concern that state lawmakers would continue to fund the pension adequately. The reforms call for the state to contribute an additional $225 million a year to the pension, but a future legislature could cut or eliminate that payment any time it chooses.
By BRIAN EASON, Associated PressMORE NEWS: Growing Wildfires Trigger Air Quality Alert Including Vail, Glenwood Springs, Craig And Meeker
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