Colorado Treasurer says open data the key to pension solutions

In 2011, Colorado State Treasurer Walker Stapleton asked for access to data regarding his state’s pension fund; as a member of the pension board, he had seen first-hand how unhealthy the system was, and he wanted access to the “financial DNA” of the system—data on the top 20% of beneficiaries, their annual benefits, age of retirement, former job and last 5 years of salary.

His request for the data was denied, so he filed a lawsuit to get it.

Stapleton still hasn’t seen that data, but three years later, he’s still trying to get it. Now his lawsuit sits in the state’s Supreme Court awaiting oral arguments and he’s closer than ever to learning more about the Colorado retirement system, which is only 63% funded.

Stapleton sat down today with Bloomberg to discuss Colorado’s pension system:

Q: You have said that the Colorado Public Employees’ Retirement Association’s return assumption is unrealistic. In November, it lowered the rate to 7.5 percent from 8 percent. Should it be cut further?

A: Absolutely. There’s more opportunity to go lower. States that have conservative assumptions as their rates of return have assumptions in the sixes, and as a result their plans are quote unquote healthy or better-funded than our plan is. Colorado has consistently ranked in the bottom 20 percent of funding ratios for state public-pension programs.

Q: What changes do you recommend to reduce the pension liability?

A: Retirement age is one of the things that we need to look at. We also need to look at increased contribution levels from new employees and current employees in the system for the defined benefits they’ve been getting. If they’re not willing to have increased contribution levels or the retirement age adjusted, then potentially they could have the option of joining a defined-contribution plan.

Stapleton says in the same interview that transparency in retirement systems is the key to making them healthier—obtaining the data about payouts is the only way to construct a plan to reduce the unfunded liabilities that weigh the system down.

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