Pensioners Might Get Extra Pay Request Before City Council Could Give One-Time Help

By Daniel J Chacon

For 75-year-old Perfidia Reyes, retirement is nothing like she imagined.

The former Denver city employee can no longer travel or go out. Shopping for groceries is arduous. And if she’s really in a pinch, she said she’ll work part-time.

Her pension started at $400 a month, and “it’s been stuck at $547.14 for the past, I couldn’t tell you how long,” Reyes said.

According to Denver officials, retired city employees such as Reyes have gone five years without a cost-of-living increase in their monthly pension checks.

But a small reprieve could be in the works.

The city’s retirement board is asking the City Council to approve an ordinance that would enable the board to give retirees a one- time payment this year. The amount hasn’t been determined, but the extra cash couldn’t come at a better time.

“As you would expect, we’re getting more and more calls from retirees saying, ‘Gas is $4 a gallon. We would appreciate an increase in our benefits,’ ” said Steve Hutt, executive director of the Denver Employees Retirement Plan.

With food prices also going up, the one-time payment “may help the squeeze a little bit,” said Councilwoman Jeanne Faatz.

“We are all just so concerned about the retirees and their losing purchasing power that I very much appreciate the retirement board looking for some solutions,” she said. “I don’t want them to see this as the entire solution because, obviously, when you have a retirement system, you need it for long-term growth in order to stay up with inflation.”

Unlike the Public Employees’ Retirement Association and other pensions, Denver’s retirement plan doesn’t guarantee a cost-of- living increase, Hutt said.

“Ours is wholly up to the retirement board,” he said. “But it’s an all-or-nothing sort of thing, and so for the last five years, the retirees have gotten no increase at all.”

Denver’s retirement plan is in much better shape than others across the country. Its funded ratio, a measure of assets vs. liabilities, is more than 98 percent.

Hutt said the retirement board and the city are working to get the plan 100 percent funded, and there hasn’t been enough money left over to pay for a cost-of-living adjustment in recent years.

“Our priority is making sure that we have money to guarantee every benefit that’s already been promised,” he said. “If there’s additional funding available, then that’s what makes the money available for any increase.”

Of the more than 18,000 former and current city employees covered by the approximately $2 billion plan, about 6,000 are retirees.

Hutt said he believes retirees are hurting financially, especially people who retired a long time ago. Benefits are calculated according to final salaries, which were much lower years ago.

The proposed one-time payment, which would come out of the retirement fund, is a “good temporary measure,” Hutt said.

“Is it as great as a traditional (cost-of-living adjustment) that lasts for the rest of their lives?” he said. “No. But on the other hand, we haven’t been able to do anything at all for the last five years, so we see it as something that will be – at least for 2008 – helpful.”

Originally published by Daniel J. Chacon, Rocky Mountain News.

(c) 2008 Rocky Mountain News. Provided by ProQuest Information and Learning. All rights Reserved.