PERA's mix of assets needs to change

After attending the Boulder campus PERA presentation in which proposed legislative changes were explained, I came away with some disturbing thoughts. By reducing benefits to accommodate poor market performance, we end up with a defined contribution plan masquerading as a defined benefit plan. When the benefit guarantee is removed, the difference between the two vanishes. When the risk becomes mine, I should be entitled to make my own investment decisions. Brooding upon my pension conjures uninvited images of Ponzi schemes and gambling casinos.

I believe the PERA trust fund should invest mostly, if not exclusively, in bonds, as proposed by G. Bennett Stewart III in his June 2003 Harvard Business Review article, Pension Roulette. Meanwhile, PERA's latest reported fixed income and cash/cash-equivalent investments stand at less than 30 percent. We are all paying the price for such hubris. The Social Security trust fund invests 100 percent in fixed-income securities; because PERA is a Social Security substitute, ought we not take counsel? I hope the Colorado legislature considers this before adopting any changes because it alters the metrics of the entire program.

Fixing the funding shortfall by simply decreasing benefits and increasing contributions without also correcting the asset mix might improve the odds, but it still amounts to a roll of the dice. And, as we see, the house doesn't pay on bets that it loses. You and I do.

Barry Northrop
Accounting and Business Support, University of Colorado at Boulder

State must allocate more funding for higher ed

I am concerned about CU's fiscal policy and the initiatives that are under way to deal with the crisis. We have read about a number of proposals from the president's office about fiscal flexibility (exemption from public oversight), increasing tuition and increasing out-of-state and foreign student enrollment because they pay more.

Why have we not heard one word from CU lobbying about restoring state funding to higher ed? Why is Colorado, with one of the highest median incomes in the country, dead last in higher ed funding? This is embarrassing and a public shame. I understand that we're in a recession, but so is the rest of the country. Yet 49 other states are managing to provide more than the 3 percent of funding Colorado currently allocates to higher education.

We are in real danger of losing affordable public higher education in Colorado at a time when our kids need an education more than ever. A college education is not a luxury anymore, it's a basic need to function in today's world. Colorado's kids deserve better than this.

Dragan Mejic
Engineering College staff, University of Colorado at Boulder

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