Developing Story: PERA Selling Assets?

In the past, I’ve commented about the difference between cumulative returns and average returns, especially when there’s an outgoing cash flow to meet obligations.  I have learned that Walker Stapleton is claiming that PERA, Colorado’s Public Employees Retirement Association, which has fallen to 50% funded, is now selling assets to meet obligations.  Evidently, PERA administrators have been making this statement off the record to during briefings.

That’s right: our public pension may have been reduced to eating its seed corn.

Mr. Stapleton, whose campaign for State Treasurer will certainly make PERA administration a centerpiece issue, has filed a Colorado Open Records Act (CORA) request to see exactly what assets are being sold.  PERA is already having trouble meeting its asset allocation targets.  Rebalancing is one thing; shrinking the pie is another altogether.

Gov. Ritter’s reckless accumulation of unfireable new state employees, at salaries that average 6% above the private sector, has only made this situation worse in the long run, while doing nothing to keep the Ponzi scheme going in the short run.