An independent study released this week provided good news for Colorado’s public pension system – a little too good for skeptical Republican lawmakers.

The study determined that the Colorado Public Employees Retirement Association’s benefit model is more efficient and cost-effective than other types of public and private retirement plans.

And a move toward a different benefit system for public employees would cost the state up to $15.9 billion, the 211-page report reads.

“There is no alternative better than PERA for providing retirement income,” said Leslie Thompson, senior consultant for Denver-based Gabriel, Roeder, Smith and Co., the consultant and actuary firm that authored the study.

Thompson presented the study to the Legislature’s Audit Committee Monday. The study was mandated through legislation enacted last year that sought to examine the costs and other logistics associated with a potential PERA restructuring.

PERA, which covers half a million state workers, including teachers, is considered a hybrid plan. It contains features of both a defined benefit plan, which creates promised annuity at retirement, and a defined contribution plan, such as a 401(k) benefit, where the employer and employee make contributions toward a retirement account on a regular basis.

Discussions over the solvency of PERA are a perennial debate at the Capitol. Republicans have questioned whether the system and its unfunded liability to taxpayers is sustainable over the long haul.

But the study found that the PERA’s benefit system “is more efficient and uses dollars more efficiently than the other types of plans in use today.” The study measured the effectiveness of the PERA plan to those of several public and private alternatives.

The report also found that if lawmakers chose to move the state to an alternative plan, costs “may not be the greatest consideration either for or against a change in the plan.”

“The decision to change from the PERA hybrid plan to another type of plan would be due to a change in the state’s compensation policy, not because the same benefits could be achieved at a lower cost,” the study reads.

Greg Smith, PERA’s executive director, said in a conference call with reporters that he hopes the study will provide the Legislature with the information it needs to make the proper decisions surrounding the state’s public pension system.

“What this report does is allow policy makers to see the efficiency of the plan that we have in place for purposes of going forward in providing retirement security for our public workforce,” Smith said.

Committee Republicans were left uneasy over the study’s findings. They insist the PERA system – which does have pension obligations that are currently not fully funded – must be retooled.

Republicans, including state Treasurer Walker Stapleton, point to some estimates that indicate that the system contains $26 billion in unfunded liability.

The report does find an “existing unfunded accrued liability,” but the study also serves as a reminder that vested PERA members cannot be kicked out of the current system, because they have legal rights to the benefits they signed up for.

Sen. Chris Holbert, R-Parker, said he was stunned that the report primarily painted a rosy picture of the PERA system.

“I found them to be unbelievably positive,” Holbert said of the findings. “Usually, we have some findings where we need improvement. In my time on the legislative audit committee, I don’t remember a report that was absent of those kinds of measures.”

“Either there’s nothing to be concerned about or there are things that seem to be missing in the report. And I don’t know the answer to that.”

Holbert worries that PERA solvency will rely on government growth.

“I think that folks who may live in more conservative communities like mine struggle with that,” Holbert said. “We don’t necessarily want to see government continue to grow and have liabilities on taxpayers.”

Rep. Lori Saine, R-Dacono, said the study did little to quell concerns “that this is ultimately going to fall on the taxpayer.”

“It’s unlike a private pension plan, where you do have some natural caps where the company is only going to assume so much risk, and the employee is only going to assume so much risk,” she said. “Here, we’ve got everybody assuming the risk.”

But Sen. Lucia Guzman, D-Denver, who chairs the audit committee, said the study’s findings left her optimistic about the solvency of the benefit system. She also worried about the cost of changing the system to a different model.

“Moving it or transitioning it from what we have right now into more of a private sector option, at least what I heard today, is not the right way to go,” she said. “It sounds like it would cost us too much, that the benefits of our employees would be less in the future, so I’m very concerned about that.”

“I think this (study) really does give a huge amount of merit to keeping our plan and sustaining the plan that we have.”

– Twitter: @VicVela1