On July 1, 2017, House Bill 17-1176, went into effect in Colorado to address the issue of critical staff shortages in rural school districts. The new law allows rural school districts that declare a critical shortage of teachers, bus drivers, and food service workers to hire retirees to fill these positions.

The PERA Board of Trustees opposed this legislation due to the additional costs associated with allowing retirees to work for an unlimited amount of time in certain situations. The legislation was estimated to add approximately $85 million to PERA’s unfunded liability according to actuarial analysis.

“The PERA Board appreciates the legislative intent of assisting rural districts in Colorado in finding qualified teachers and other support staff. However, the Board must act as fiduciaries and oppose the bill due to the increase in unfunded liabilities presented by the legislation,” said PERA Board Chairman Timothy M. O’Brien in a statement issued after the Board took a position on the bill.

Even though the PERA Board opposed the legislation due to the increased financial obligation, PERA continued to serve as a resource to the General Assembly. PERA staff worked with legislative drafters to ensure that PERA would be able to appropriately implement any potential legislation. During debate on this bill in the House Finance Committee, Representative Gray (D-Boulder/Broomfield Counties) noted, “this [bill] isn’t a free lunch. We’re providing an economic incentive for these folks to teach in rural areas, and it doesn’t come for free….We shouldn’t pretend nobody’s paying for it – PERA’s paying for it.”

Listen to Rep. Gray’s testimony on HB 17-1176:

 

Path of HB 17-1176 to passage and enactment:
• HB 17-1176 passed the House Finance Committee on an 11-1 vote.
• The House Appropriations Committee voted 12-1 in favor.
• The full House voted 60-3 in favor.
• The Senate Education Committee voted 4-3 in favor of the bill.
• The full Senate passed HB 17-1176 on a 29-6 vote.
• The Governor signed HB 17-1176 into law on June 6, 2017.

Prior to this law, Colorado PERA benefits were reduced for all working retirees who exceeded the maximum limit of days worked per calendar year (110 days or 720 hours, or in some cases, 140 days or 916 hours). These rules still exist for typical PERA working retirees, however, with the passage of House Bill 17-1176, rural school districts that declare a critical shortage of teachers, bus drivers, and food service workers have the option to hire retirees to fill these positions. Those retirees can then work as many days or hours as needed without regard to the working after retirement limits.

In Colorado currently, 147 out of 179 school districts are considered rural as defined by the Colorado Department of Education (see the Rural Designations list on this page). In order to qualify for the exemption to working retiree limits, a school district must first declare a critical shortage and then it will be able to hire retirees in those positions under the “critical shortage retiree” definition outlined by the new law.

A provision of HB 17-1176 requires PERA to report to the Legislature in three years the impact of allowing rural school districts to implement this critical shortage designation. The law sunsets on July 1, 2023, six years after being signed into law. The new law requires PERA to conduct an impact study at the conclusion of this six-year period.

Read more from PERA about working after retirement.

Rural School District Critical Shortage Fact Sheet