A Democratic lawmaker says he plans to introduce legislation next year to limit the bonuses that the Colorado Public Employees’ Retirement Association pays to its investment staff.
The proposal comes in response to The Colorado Sun’s investigation last week that found PERA has paid its investment staff millions of dollars in performance bonuses in recent years — including $10.2 million in payouts following the stock market’s disastrous 2022. That year, the pension lost $9.8 billion on its portfolio, but PERA still beat many of the benchmarks used to measure its investment team’s performance.
When bonuses went out the following year, nine investment officials received more than $400,000 each in annual incentive payments that are supposed to reward good performance, The Sun found.
PERA officials have defended their compensation practices, saying they need to offer the incentives to compete with private sector firms for talent.
In interviews last week, state lawmakers who oversee PERA told The Sun they aren’t opposed to incentive pay. But the timing and the size of the payouts showed they were right to be concerned when they passed Senate Bill 147 in 2025 requiring more transparency about PERA’s finances and employee compensation.
“I don’t want to see anybody making $1 million when they’re losing money,” said Sen. Chris Kolker, a Democrat from Centennial who sponsored the transparency measure.
Kolker said he expects to introduce a bill next year to prevent PERA from paying bonuses when the pension’s investments deliver negative returns — even if employees beat the index funds they use as a measuring stick.
Kolker, a personal financial adviser and investment manager, said he previously raised concerns about the pension’s investment losses in 2022. But PERA officials defended their performance, arguing that the investment staff had beat their benchmarks. “They just kept blowing me off on this, is how I felt,” he said.
Bad investment years can have real financial consequences for PERA members, he noted. “When PERA shows a loss consistently, we have to put more money in or we have to raise contributions or we have to reduce the inflation adjustment (for retirees),” Kolker said. “If you’re losing money, you’re not entitled to a bonus.”
In a statement, PERA declined to comment on the proposal.
“PERA does not comment on potential legislation that may be introduced in future legislative sessions,” Patrick von Keyserling, a spokesperson for the retirement system, wrote in an email. “PERA reviews and takes a formal position on pension-related bills once introduced.”
Sen. Byron Pelton, a Republican from Sterling who cosponsored the transparency bill, stopped short of proposing specific guardrails on how PERA pays its staff. “I think we need to sit down and have a discussion with PERA again.”
“The perception of this is not good for PERA,” Pelton said. “We just want to make sure that it’s all justified, transparent, all the way across.”
Oversight committee on hiatus
The first disclosures under the law came out at the end of last year. They showed that the pension had paid nearly $10 million in investment bonuses in 2025, with four employees earning more than $500,000 each in incentives alone.
But the report made few waves at the state Capitol. Many of the legislature’s committees, including the Pension Review Commission and its PERA-focused subcommittee, were on hiatus to save money amid a state budget crunch, and lawmakers never discussed the incentives publicly.
The two pension oversight committees — created as part of the 2018 pension reforms to keep tabs on PERA’s finances — aren’t scheduled to meet again any time soon. They and most other legislative committees won’t meet over the interim.
Kolker chaired the Pension Review Subcommittee in 2024, the last time it met. He said he would push to meet about the bonuses when the legislature reconvenes in 2027.
State Rep. Rebekah Stewart, a Lakewood Democrat who chairs the Pension Review Commission, said she was “concerned” by The Sun’s reporting, but she confirmed the commission wouldn’t meet this year due to budget cuts.
“Many hardworking PERA members and retirees are stretching their dollars further,” she wrote in a text message. “Our top priority is that PERA invests its members’ dollars wisely, performs well and meets its goals in a cost-effective way.”
Renewed scrutiny on contributions
The money PERA spends on bonuses has little impact on its overall funding. In a board meeting last year, Executive Director Andrew Roth likened it to adding “grains of sand” to the pension’s $29 billion unfunded debt.
But the same can’t be said for PERA’s impact on public services. The state and school districts have to contribute more than 21% of each employee’s salary to the pension, most of which goes to pay down its unfunded debt to retirees. That’s more than double what public employers had to contribute in the early 2000s, when PERA was fully funded.
In recent years, pressure has been slowly building for the legislature to revisit the 2018 deal that increased contributions and cut retiree benefits. But there’s no easy solution.
Retirees want their cost of living raises restored, but doing so without increasing PERA’s unfunded debt means government agencies and workers would have to contribute more. Meanwhile, many of today’s workers and public employers say they already contribute too much for a pension that is far less valuable than it used to be.
Kolker said state lawmakers can’t continue ignoring PERA’s role in the state’s budget problems.
“When we say that we’re underfunding schools and we’re struggling, we need to look at PERA as being a huge expense that we’re paying that nobody wants to talk about,” Kolker said. “I’ve been trying to start talking to our members and say we have to look at reducing these contributions — which is a political nonstarter.”
Kolker insists he doesn’t want to harm the pension’s finances. But, he says, the state went too far in requiring that PERA be 100% funded by 2048.
“Right now we can’t reduce these contributions until we’re 103% funded — which we’ve only been once in our history,” he said.
Gov. Jared Polis last year proposed temporarily cutting pension contributions in order to free up money to spend on employee raises.
The Joint Budget Committee rejected the idea, arguing that reducing PERA’s funding today will just lead to greater costs down the road. And everyone could pay the price unless the state rewrites the 2018 pension law. If PERA’s funding slips too much, state law automatically triggers additional contribution hikes and benefit cuts to prevent another crisis.