The future of Pinnacol Assurance is moving away from the governor’s office and the legislature, with a new ballot initiative aiming to privatize the insurer and use the proceeds to expand job training across Colorado.

Colorado Succeeds, a coalition of business leaders focused on education, will file a ballot measure on Monday to allow Pinnacol, the quasi-government workers’ compensation insurer, to go private effective in 2027.

Colorado Succeeds CEO Scott LaBand told Colorado Politics that his members, business leaders across the state, are looking for workforce development.

“We’re all about all Coloradans being educated to their greatest potential and all companies having that local, home-grown talent that they need to thrive,” he said.

Colorado Succeeds has been providing scholarships, along with foundations, for short-term credential training. Its leaders said it has had a significant impact on employees and employers.

The group wants a way to stabilize it through public investment, LaBand said, noting that this kind of training is often underfunded.

When it looked at Pinnacol, the group concluded it’s a Colorado legacy asset that is about the workforce, LaBand said. Pinnacol’s community work is similar to Colorado Succeeds’ efforts, and “we saw an opportunity for a once-in-a-generation windfall for the state” in workforce development, he said.

LaBand said the group approached Pinnacol with the idea, which was received positively, he said.

“This is the most exciting opportunity I’ve ever seen to create something that has staying power, will meaningfully impact individuals’ lives and ensure the economy moves forward,” LaBand said.

The ballot measure also includes accountability measures, he added.

The measure’s principal proposal is to allow Pinnacol to go private effective July 1, 2027.

As envisioned, $150 million of the money will go to community colleges, local district and area technical schools to fund a grant program to be known as the “Skilled Workers and Trades Fund” for in-demand jobs, such as plumbers, electricians, and nurses. It would also fund capital equipment improvements. 

Additionally, the premium taxes that Pinnacol pays to the state general fund would be routed to the grant program to fund staffing and ensure sustainability.

LaBand estimated that it would cost about $10 million per year. The $150 million would be drawn down at about 5% per year, resulting in an annual payout of about $17.5 million. About 10% will go toward administrative costs and data collection. That leaves enough to fund 5,000 scholarships per year at $3,000 each.

The learning partners are ecstatic about that, LaBand said.

While the ballot measure doesn’t set a dollar amount, it allows Pinnacol to separate its employees from the Public Employees’ Retirement Association (PERA), the state pension plan.

PERA has valued Pinnacol’s exit, under which Pinnacol would pay $302 million for its employees’ pension share. Pinnacol previously claimed that was too rich for its liking.

The valuation from PERA is based on a discount rate, which pension plans use to estimate the present value of future pensions. PERA proposes a 5.25% rate; Pinnacol prefers 7.25%, which would result in a lower cost to exit PERA, potentially by $150 million.

Pinnacol CEO John O’Donnell told Colorado Politics PERA will get the $302 million, given that Pinnacol will be able to privatize under the ballot measure for far less than the deal proposed by the governor.

Pinnacol’s board has not yet taken an official position on the ballot measure and is reviewing the legal documents tied to the proposal, he said.

That said, with Pinnacol engaged in workforce development, “we feel this is a really good fit for us, potentially, and are encouraged by the opportunity.”

“We’re tasked with doing what’s in the best interest of our members, policyholders, and the workers of Colorado,” O’Donnell said. “Our workers’ compensation system is funded by the premiums paid by our members, and if we can get more training in these different vocations, that tends to improve the safety, reduce injuries, and result in lower workers’ compensation costs. That’s a win for them.”

The ballot measure takes a very different approach to Pinnacol privatization than the governor has proposed over the past year.

Gov. Jared Polis, in his 2026-27 budget proposal, included privatization in hopes of the state gaining about $400 million from the deal, which would, in part, pay for the 2026 homestead property tax exemption for seniors and disabled veterans ($193 million). 

In a statement to Colorado Politics, a spokesman said the governor has not seen the ballot language and will review it if it makes the ballot.

“The governor agrees that Pinnacol, for long-term sustainability, needs to be converted to a private entity. We feel that the legislature has an opportunity to address this issue this legislative session,” the spokesperson said.

There’s another idea: Pinnacol could be sold to the highest bidder. That deal could be worth up to $800 million to the state, although Pinnacol has said it is not legal. Polis told reporters he isn’t opposed to the idea but is not advocating for it.

In a November statement, the company said the state doesn’t own Pinnacol, so the state can’t offer the insurance company for sale.

Pinnacol “mostly separated from the state in 2002, when the state directed Pinnacol to operate as an independent mutual insurance company under the ownership of its members,” the company said. 

The company added that Pinnacol intends to maintain “its financial strength and capital to meet the needs of our members, while remaining under the ownership of our members. This commitment is non-negotiable.”

Pinnacol has been seeking privatization for years. Going private would allow it to offer its insurance products beyond the state’s borders to Colorado companies with employees in other states.

Twenty-five states, including Colorado, have laws prohibiting a political subdivision, such as Pinnacol, from being licensed as an insurance carrier in their state.

Pinnacol officials said a year ago that half of Colorado employers have employees outside Colorado, and given that it cannot offer insurance to those out-of-state workers, those companies — as many as 95% — are going elsewhere. That leaves Pinnacol with more high-risk companies, which carry higher premiums and, over the long term, reduce the services it can offer as its market share continues to drop, according to company sources.

While Pinnacol remains the largest provider of workers’ compensation insurance in Colorado, it is losing market share, now below 50%, the company said last year.