A panel of lawmakers charged with crafting legislation governing pensions for police, firefighters and state employees on Tuesday unanimously approved a trio of bills ahead of the coming legislative session. 

The first bill of the trio to be approved by the Pension Review Commission seeks to combine a pair of retirement plans administered by the Fire and Police Pension Association.  

The FPPA in 2020 convened a task force to study the future viability of the Statewide Hybrid Plan, one of the retirement plans it offered. Due to the small size of the plan, the task force in April returned suggestions to merge its assets and liabilities with those of the Statewide Defined Benefit Plan to create a new plan. 

The bill approved by lawmakers reflects the recommendations of the task force. The bill’s fiscal analysis estimates costs for local governments “will increase for phased-in employer contribution rate increases,“ though the analysis doesn’t have an estimate on what that increase would look like. 

The second bill seeks to send some $33.2 million to FPPA to provide funding for the state’s obligation to the organization’s Statewide Death and Disability Trust Fund.  

Benefits from that fund go towards supporting so-called “old hires,” FPPA members that were hired before Jan. 1, 1997. State funding for the FFPA fund was discontinued in 1997 based on the actuarial assumption the final $39 million payment fully funded the plan. 

However, a current actuarial analysis by FPPA’s actuarial firm show the fund is short by the amount of money the bill allocates. 

“As it turns out, looking back at 1997 and the actual studies that were done then, the funding that we received from the state was insufficient to fund the full cost of providing benefits for that group of people,” said Kevin Lindahl, FPPA’s general counsel and deputy executive director. “We are here today to ask you to fund the amount of shortfall that we have in the plan due to that issue.”

The last the three bills would make a payment of more than $300 million to the Public Employees’ Retirement Association, the pension plan for state employees that was suspended as lawmakers sought to make budget cuts at the onset of the COVID-19 pandemic last year. 

Under 2018 legislation, annual payments to PERA are due on July 1 until its unfunded liabilities are paid, which was estimated to be around 30 years. House Bill 1379, passed in June 2020, suspended those payments as the state stared down COVID-induced lockdowns and the economic fallout that accompanied them. 

More than a year later, lawmakers are ready to restore that cut. 

“To the extent that we have a significant unfunded liability facing our state, our state’s credit rating takes a hit,” said Rep. Shannon Bird, the Westminster Democrat who chairs the panel. “To the extent our state’s credit rating doesn’t look as good as, that increases our borrowing costs so that makes things more expensive for us as a state

“To the extent we can pay down our own unfunded liability, we strengthen our state’s credit rating and things become less costly. Also, paying down this liability helps protect our general fund for the long term.”

The bill would on July 1, 2022 send PERA the $225 million that was cut in 2020, plus an additional $78.6 million to cover the estimated investment gains that money would have accrued. 

After presentations from FPPA on both bills, as well as one from Bird and Henderson Republican Sen. Kevin Priola on the third measure, the panel vote unanimously to approve all three.

The legislation moves on to the Legislative Council, the panel that vets the legal implications and other factors before bills can be introduced.

That panel is scheduled to meet in mid-November to review legislation approved by interim committees, which are groups of legislators assigned to meet during the off-session periods to study, propose and craft bills.