The basic formula for a full service, single-life retirement benefit in the PERA Defined Benefit (DB) Plan is: your highest average salary x 2.5% x your years of service = your monthly lifetime benefit amount. 

If a member dies before retirement with at least one year of earned service credit, the member’s qualified survivors may receive a survivor benefit. In many cases, survivors will receive an ongoing monthly benefit. 

Colorado state law, C.R.S. § 24-51-101(42)(a) and PERA Rule 1.20F define the salary that is subject to PERA contributions. 

Most members and employers contribute to PERA's hybrid defined benefit plan, which is a substitute for Social Security for most members, and provides a monthly lifetime income in retirement (based on their age, highest average salary, and service credit) with the option to provide a surviving benefit to one person. 

Some members have the option to choose to between the PERA Defined Benefit (DB) Plan and the PERA Defined Contribution (DC) Plan. This option to choose is called PERAChoice. The PERA DC Plan is similar to a 401(k) plan in the private sector, with both the employee and employer making contributions from each paycheck to fund the member’s investment account. 

Which plan is a better fit for you is a personal choice, and depends on your retirement goals and preferences. We encourage you to explore the various resources on this website, such as our New to PERA section, webinars, and Video Library to learn more about how PERA works. The PERAChoice booklet also includes helpful information about the differences between the two plans.

Instead of the lifetime monthly benefit, members can take a lump sum distribution of their member account, plus interest, upon termination of employment, which may include a match. It is due to this “hybrid” and portable nature that PERA works for both short-term and longer-term career employees. 

Members in the DB Plan are automatically eligible for additional benefits that offer extra financial protection at no additional cost (DC Plan members are not eligible). These benefits include survivor benefits and disability coverage. Since most members do not participate in Social Security, these disability and survivor benefits provide important protection.  

All employees of PERA-affiliated employers can supplement their retirement savings with voluntary contributions to the PERAPlus 401(k), and some employees also have access to the PERAPlus 457 Plans. While all members have access to the tax-deferred contribution option, some employers have adopted the Roth option for their employees, allowing for tax-free growth and distributions. 

When planning for your retirement, you may have the option to purchase service credit so that you may be able to retire earlier and/or with a larger benefit. Your eligibility and cost to purchase service credit are dependent on several factors.