Board News
October 12, 2005
Denver Board Of Education "Reluctantly" Terminates Merger Proposal With Public Employees Retirement Association
The Denver Board of Education unanimously approved a resolution during a special meeting this morning that "reluctantly" terminates the proposed merger of the Denver Public Schools Retirement System and the Public Employees Retirement Association of Colorado.
The resolution cited several major outstanding issues including no final terms for an agreement, no agreed upon actuarial methodology for determining the costs of the merger, and uncertainty as to how the state legislature will respond to concerns about PERA raised by an ad hoc state commission earlier this year.
"Time has run out and it does make sense to end negotiations," said Board of Education president Les Woodward. The terms of the merger legislation permitted any party to terminate the merger by giving notice to the others by Saturday, Oct. 15.
Board president Woodward encouraged the district to continue to pursue a merger because it is "critical" in the long run for employees to have retirement benefits that are portable between Denver Public Schools and other school districts. "This is unfinished business from my point of view," he said.
Currently, employees of Denver Public Schools are the only public school district employees in the state who are not covered by PERA but by their own defined benefit plan, the Denver Public Schools Retirement System.
Superintendent Michael Bennet said he agreed with the Board's decision. "No prudent business person, with these kinds of ambiguities and an incomplete agreement would proceed with the merger at this time," he said.
"This should not be the end" of merger work, concurred Board member Michelle Moss. "But we need to be confident that this is in the best interests of teachers and all employees."
Board member Theresa Pena said the district should reconsider the merger after the state legislature addresses concerns about the state retirement system that were raised in an evaluation by the State Treasurer's ad hoc Commission to Strengthen and Secure PERA. The resolution approved by the DPS Board of Education noted that if the commission's recommendations are adopted by the state legislature that they would "significantly impact the PERA Plan and the cost benefit analysis of the merger as presently contemplated."
Work on the merger has been in earnest for three years. Twice the state legislature has approved legislation that would enable the merger. The first merger agreement was signed in April 2004 and a second round of legislation was approved in May 2005.
Superintendent Bennet thanked all staff members who had worked on details of the merger but said the right decision was made.
The full text of the Board of Education's resolution follows:
RESOLUTION NO. 2952
October 12, 2005
WHEREAS the Board of Education has determined that merger of the Denver Public Schools Retirement System (DPSRS) with the Public Employees' Retirement Association of Colorado (PERA) would be in the best interests of District students, staff and the community because it would promote portability of benefits between and among other Colorado school districts; and
WHEREAS in the past three years, the Board of Education has worked cooperatively with members of the staff and the Board of Trustees for the DPSRS and staff of PERA to achieve that goal, and such efforts resulted in the passage of SB 05: 171 and SB 03: 250; and
WHEREAS despite the efforts of all of the parties, no party has signed a merger agreement because the terms of an agreement have not been finalized, including but not limited to, the parties have not finalized the actuarial methodology that will be used to determine the costs of the merger; and
WHEREAS the Board has reviewed recommendations made by the State Treasurer's ad hoc Commission to Strengthen and Secure PERA in its report of September 14, 2005, which if adopted by the legislature would significantly impact the PERA Plan and the cost benefit analysis of the merger as presently contemplated; and
WHEREAS the merger legislation permits any party to terminate the merger by giving notice to the other parties on or before October 15, 2005, if a merger agreement has not been executed by all of the parties on or before October 1, 2005.
NOW THEREFORE,
The Board of Education for School District No. 1 reluctantly determines that it cannot approve the signing of a merger agreement at this time and does hereby terminate the merger pursuant to C.R.S. 22-64-220 (4) (a) and directs the Superintendent to provide written notice to the other parties.
For information, contact the DPS Communications Office at 720-423-3414.