A bill overhauling Colorado’s public employee pension emerged in the Legislature on Wednesday, showing political will for meaningful change.

Obstacle: the teacher’s union.

The Public Employees’ Retirement Association was only 64.7 percent funded in 2010, when the Legislature enacted reforms to stabilize it. Eight years later, the pension’s assets equal only 58.1 percent of liabilities.

Main sponsors of this year’s bipartisan bill are House Majority Leader K.C. Becker, D-Boulder, and Sen. Jack Tate, R-Centennial. As explained by Erica Meltzer in Chalkbeat Colorado, the bill calls for:

– Employee contributions to increase by 3 percentage points over the next two years

– Taxpayer contributions to increase by 2 percentage points during the same period

– Cost-of-living raises to decrease from 2 percent to 1.25 percent

– Increased retirement age for employees age 46 or younger, and all new members

– A new legislative oversight committee

– A mechanism to allow automatic adjustments of benefits and contributions if needed for financial stability of the fund

The bill creates a defined-contribution plan for employees hired after Jan. 1, 2020, which is the part the teachers union hates.

A defined contribution plan would leave future teachers, and other public employees, with retirement prospects more similar to those of their private sector peers.

A defined benefits plan guarantees retirement income based on a formula determined by the size of a retiree’s salary and number of years on the job. Beneficiaries enjoy contractual guarantees of incomes that are not subject to market crashes, recessions, or even a depression.

The private sector abandoned defined benefits plans for defined contribution 401(k) accounts long ago. Benefits paid by a defined contribution plan depend on deposits made to each account and returns earned in the stock and bond markets. The accounts offer no guarantees of minimum incomes.

“PERA’s defined retirement benefits, so rare now in the private sector, help teachers tolerate low wages,” said the Chalkbeat article, explaining the teachers union’s opposition.

The argument has merit, but does not solve the problem of defined-benefit plans creating liabilities disconnected from market reality. These pensions are troubled all over the country.

A better solution to low wages for teachers would be higher wages for teachers – while they are working. It makes little sense to shortchange teachers during their working years, forcing future workers and taxpayers to fund guaranteed passive incomes that are unmoored from economic reality.

The Gazette editorial board has repeatedly asked school board members and taxpayers to consider paying wages that better reflect the important work provided by teachers. On average, their incomes are a disgrace in relation to the credentials and dedication required to prepare children to sustain and improve our future.

The PERA bill, in general, appears a responsible mix of adjustments to stabilize the fund and secure its future. Linking benefits to market conditions, for future members, is common sense. Teachers should have pensions similar to those of their private-sector peers. Along with higher incomes.