Colorado PERA boardroom.

DALLAS - Colorado still faces pressure to meet its $17.3 billion of pension liabilities, despite legislation that gives the state more flexibility on cost of living adjustments, according to a March 12 report from Moody's Investors Service.

The Centennial State's net pension liabilities represent 93% of state revenues and rank 16th highest among the states, analyst Thomas Aaron noted.

The state General Assembly passed legislation in 2010 that allowed the state to make adjustments in a number of benefits through the Colorado Public Employees Retirement System, including cost of living adjustments. That law was ruled constitutional by the state Supreme Court in October 2014.

"The reforms substantially reduced PERA's aggregate unfunded liability, first reflected in the actuarial valuation for fiscal-year ended 2009," Aaron said. "But in subsequent years, unfunded liabilities have generally continued to grow."

Legislation signed by Gov. John Hickenlooper in 2014 that calls for studying alternate retirement system options and private sector comparisons, however, signals there could be additional state action.

The law requires participating governments to increase their contributions through 2018. However, even with these additional contributions, costs are continuing to be deferred to later years and unfunded liabilities continue to rise, Aaron said.

Colorado's ratio of active employees to retirees is more favorable than some states, the report says, allowing more time to build plan assets over employee careers.

"However, this demographic cushion is eroding, with the ratio of actives to retirees decreasing annually over the past decade," the report said.

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Corrected March 16, 2015 at 11:50AM: An earlier version had the wrong date of the Moody's report.