Colorado Pension Bond Proposal Falls Apart in Senate

The Securing Contributions for Retirement Earnings (SCORE) Act – the bill that would have authorized Colorado to issue $10 billion in pension obligation bonds – hit a dead end in the state Senate on Wednesday after easily passing the House.

Some lawmakers thought the bill was moving too fast to properly evaluate the risk involved.

More from the Denver Business Journal:

A bill that supporters say would have reduced the $23 billion unfunded liability of Colorado’s Public Employees Retirement Association by issuing pension obligation bonds died Tuesday morning in the Senate Finance Committee.

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Under the proposal, employer and employee contributions into PERA would be used to pay for bonds in a financing program that is described like refinancing a house at a lower interest rate.

But the bill had a set of complex covenants attached to it, said Ben Valore-Caplan, a former member of the PERA who resigned last month over his concerns about the bill.

Throughout the debate in the House, there was hardly a mention of the covenants, which were complex and could have triggered a potential default situation, thereby kicking Colorado out of the capital market, he said.

SCORE, which was House Bill 15-1388, faced an uphill battle in the Senate when one of the co-sponsors backed out. Sen. Chris Holbert, R-Douglas County, said the bill was too much to digest so late in the session.

“If pension obligation bonds can be used to reduce the time frame in which the state’s pension program can be fully funded, and or reduce liabilities to the taxpayers of Colorado, then backers of this proposal should build support in the interim and bring this idea back next year,” he said.

The bill – officially called House Bill 15-1388 – can be read here.

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