The Missing Piece of Colorado’s Pension Crisis: Rethinking Retirement on Labor Day
Labor Day, the federal holiday dedicated to honoring the dignity of work, is a fitting time to take a fresh look at Colorado’s pension problems and offer a new perspective.
This June, news outlets were in an uproar when Colorado Public Employees Retirement Association (PERA) CEO Gregory Smith praised a paltry 1.5 percent return on 2015 investments as “good” news. With 500,000 Coloradans depending on PERA for their retirement, the $28 billion gap between assets and what is promised to retirees has hard-working men and women simmering.
The fear and frustration is understandable. But to face this challenge, we need more than clever accounting tactics or scapegoating nervous fund managers. We need a better story about ageing, retirement, and the purpose of our work.
Three simple truths can help.
1. We’re not getting any younger, but we are living longer. The Denver Office on Aging forecasts that by 2035 the number of Coloradans older than 60 will swell from one-in-six today to one-in-four. Actually, the entire developed world is aging – and living longer, too. In 1900, most didn’t live past 50. Today, American life expectancy is 78. For the first time in world history, Americans who retire at 65 must think about how they will spend 10-20 years of leisure time.
2. The idea of retiring at age 65 needs retiring. In the late 1800s, Otto Von Bismark established a retirement age of 70 for disabled German workers – even though life expectancy was only 47. During the Great Depression, Franklin Delano Roosevelt feared that unemployment among youth could create conditions like those under Hitler and Mussolini. So his administration offered pensions to older workers to incent retirement and open jobs for younger workers. The Social Security Act was passed in 1935 and set the retirement age at 65 (when life expectancy was still only 63).
You can see the problem. Today we encourage productive, able, bright citizens in their 60s to stop working and start collecting a pension. This is misaligned with a Boomer generation that’s often more interested in meaningful contribution than sipping piña coladas on a cruise ship – and expensive.
3. We should honor the contributions of public employees at any age. To solve the pension crises, we need to decide between two stories about our work.
One story says work is about toiling for 35-plus years until retirement, when you take it easy, play golf and enjoy long trips to Arizona. After all those disagreeable years of labor, you deserve a vacation—for two decades.
The other story is that work is about creative service and making a satisfying contribution to our world. In the words of English writer Dorothy Sayers, “Work should be the full expression of the worker’s faculties, the thing in which he finds spiritual, mental and bodily satisfaction.”
Gary VanderArk is a not-so-retired physician living in south Denver. In his late 70s, he continues to teach medical students, serve on nearly a dozen nonprofit boards, and bike 20 miles a day. You’d think the founder of Doctors Care, a nonprofit that has helped thousands of Colorado’s medically underserved, might finally hang it up and retire. When I asked him why, he said with a broad grin, “I believe it’s more blessed to give than to receive. I’m enjoying myself too much to stop.”
What if we stopped encouraging retirement in our 60s, and began to publicly praise the contributions of snow plow drivers, police officers, and educators who serve with excellence well into their 70s, as some do?
It would mean more men and women might “long enjoy the work of their hands,” as the Hebrew prophet Isaiah once said. The desirable side effect is people pay into PERA for longer and draw fewer benefits, thus helping resolve Colorado PERA’s funding crisis.
We could start this Labor Day by finding a public employee at a backyard cookout and thanking her for serving.
Photo Credit: Retire