
<p class="wp-block-paragraph">Retirement insights from a Colorado PERA perspective</p>



<p class="wp-block-paragraph"></p>


A distant view shows a mountainous landscape with sloping peaks, green trees in the foreground, and a cloudy sky above.


<p class="wp-block-paragraph">It’s been nearly two years since Congress passed the Social Security Fairness Act and repealed Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). A <a href="https://www.congress.gov/crs-product/R49058" target="_blank" rel="noreferrer noopener" class="broken_link">recent report from the Congressional Research Service</a> (CRS) describes the bill’s implementation and its impact on affected public employees as well as Social Security’s finances.</p>



<h2 class="wp-block-heading">Background</h2>



<p class="wp-block-paragraph">For decades, WEP and GPO reduced Social Security benefits for retirees who also received retirement income from work that wasn’t covered by Social Security. Because most public employees in Colorado do not contribute to Social Security, many faced reductions under WEP and GPO if they or their spouse contributed to Social Security outside of their public sector employment.</p>



<p class="wp-block-paragraph">Federal lawmakers had tried for many years to remove or modify WEP and GPO, but those bills never made it to the floor of the House or Senate for a vote. Then in late 2024, Congress passed the Social Security Fairness Act, and then-President Joe Biden signed the bill into law in early January 2025.</p>



<p class="wp-block-paragraph">Following the bill’s passage, the Social Security Administration began the process of recalculating affected workers’ Social Security benefits and issuing retroactive lump sum payments for benefits going back to January 2024, the bill’s effective date.</p>



<h2 class="wp-block-heading">Public Employees Previously Affected by WEP/GPO</h2>



<p class="wp-block-paragraph">WEP and GPO mainly affected two groups: State and local government employees in states like Colorado where they are covered under alternative retirement plans, and federal employees hired before January 1, 1984. According to the CRS report, Colorado was among nine states that accounted for about 60% of affected workers nationwide.</p>



<p class="wp-block-paragraph">As of the most recent update in July 2025, the Social Security Administration said it had made more than 3.1 million payments to eligible beneficiaries totaling $17 billion, with an average retroactive payment of $7,208.</p>



<p class="wp-block-paragraph">In addition, the Social Security Administration received 387,000 new Social Security claims from people who may be entitled to back payment.</p>



<p class="wp-block-paragraph">In Colorado, Social Security reported 91,241 cases totaling over $599 million in retroactive payments that were processed through large-scale automation. That total does not include more complex cases that required manual processing, so the full impact isn’t yet clear.</p>



<h2 class="wp-block-heading">Social Security’s Finances</h2>



<p class="wp-block-paragraph">Because the Social Security Fairness Act increased benefit payments for affected beneficiaries, it increased costs for the program as a whole. According to the Congressional Budget Office (CBO), the bill is expected to increase Social Security spending by about $198 billion over 10 years.</p>



<p class="wp-block-paragraph">That increase in spending slightly worsens Social Security’s financial outlook; the CBO estimates the depletion date of Social Security’s trust funds would advance by about six months due to the Social Security Fairness Act.</p>



<p class="wp-block-paragraph">According to the <a href="https://www.ssa.gov/oact/trsum/" target="_blank" rel="noreferrer noopener" class="broken_link">most recent report</a> from the Social Security and Medicare Boards of Trustees, the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivor benefits, has enough money to pay full benefits until late 2032. After that, Social Security will only be able to pay about 78 percent of scheduled benefits.</p>



<p class="wp-block-paragraph">The impact on Social Security isn’t entirely negative, however. The CRS report states WEP and GPO were a major cause of Social Security overpayments, so the SSFA reduces that risk and removes the administrative burden of collecting and verifying pension details.</p>



<h2 class="wp-block-heading">What’s Next?</h2>



<p class="wp-block-paragraph">There’s a great deal of uncertainty around what the future of Social Security looks like. With less than a decade until the program exhausts its financial reserves, momentum is building in Washington, DC to take action sooner rather than later.</p>



<p class="wp-block-paragraph">Congressional lawmakers on both sides of the aisle <a href="https://www.ncpers.org/blog/the-future-of-social-security-the-reform-proposals-congress-is-considering" target="_blank" rel="noreferrer noopener">have proposed changes</a>, including raising the cap on income subject to Social Security payroll taxes or rethinking the system’s investments. There have also been discussions about creating a commission or advisory board to oversee legislative attempts at Social Security reform, though nothing has been decided.</p>



<p class="wp-block-paragraph"><em>PERA On The Issues</em> will continue to follow this issue and share updates as they’re available. Be sure to <a href="https://www.copera.org/pera-on-the-issues/subscribe">subscribe to our newsletter</a> to stay in the loop.</p>


The U.S. Capitol dome with the text of H.R. 82

Assessing the Impact of the Social Security Fairness Act


<p class="wp-block-paragraph">New research highlights the importance of reliable retirement income as American workers are increasingly concerned about their retirement security.</p>



<p class="wp-block-paragraph">October is National Retirement Security Month, and according to a report from the National Institute on Retirement Security (NIRS), a large and growing majority of adults say the country is facing a retirement crisis as workers struggle to save money while also meeting other financial obligations.</p>



<h2 class="wp-block-heading">Americans’ Views on Retirement</h2>



<p class="wp-block-paragraph">NIRS researchers collected data from online interviews of 1,203 American adults who were at least 25 years old and found that 80% believe the country is facing a retirement crisis, up from 67% who said the same in 2020. In addition, 61% said they’re concerned they won’t achieve financial security in retirement, up from 55% in 2020.</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="606" src="https://content.copera.org/wp-content/uploads/2026/10/nirs-retirement-crisis-1024x606.png" alt="Bar chart showing increasing percentages of Americans who agree the U.S. faces a retirement crisis: 67% in 2020, 79% in 2023, and 80% in 2025, split by agreement level." class="wp-image-67469" srcset="https://content.copera.org/wp-content/uploads/2026/10/nirs-retirement-crisis-1024x606.png 1024w, https://content.copera.org/wp-content/uploads/2026/10/nirs-retirement-crisis-300x178.png 300w, https://content.copera.org/wp-content/uploads/2026/10/nirs-retirement-crisis-768x455.png 768w, https://content.copera.org/wp-content/uploads/2026/10/nirs-retirement-crisis.png 1220w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Image credit: National Institute on Retirement Security</figcaption></figure>



<p class="wp-block-paragraph">There are a multitude of reasons why study participants expressed such pessimistic views. Economic conditions are a major influence, with majorities citing both inflation and market volatility as key factors contributing to their concerns about retirement security. In addition, more than three-quarters of Americans are worried about the potential of Social Security benefit cuts in the future if Congress doesn’t take action.</p>



<p class="wp-block-paragraph"><strong>RELATED:</strong> <a href="https://www.copera.org/pera-on-the-issues/the-latest-on-social-securitys-finances-and-future">The Latest on Social Security’s Finances and Future</a></p>



<h2 class="wp-block-heading">The Challenge of Saving on Your Own</h2>



<p class="wp-block-paragraph">As access to defined benefit pension plans has decreased—only 15% of private-sector workers had access to one in 2023, according to NIRS—many workers face the challenge of figuring out how to save enough money for retirement on their own.</p>



<p class="wp-block-paragraph">Study participants said it’s increasingly difficult to do so while juggling a variety of competing financial priorities. Top obstacles include debt, housing, emergency expenses, healthcare, and childcare costs.</p>



<p class="wp-block-paragraph">NIRS said many workers also lack the financial know-how necessary to build a nest egg large enough to meet their retirement goals. When asked how much retirement income a theoretical $100,000 savings balance would produce, half of the study participants were overly optimistic and believed they would be able to draw $10,000 or more annually from that balance, according to the researchers.</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="788" height="1024" src="https://content.copera.org/wp-content/uploads/2026/10/nirs-overly-optimistic-788x1024.png" alt="Bar chart showing survey responses about expected annual retirement withdrawals from $100,000 in savings. 9% expect to withdraw near 4%. 50% have overly optimistic expectations over $10,000." class="wp-image-67468" srcset="https://content.copera.org/wp-content/uploads/2026/10/nirs-overly-optimistic-788x1024.png 788w, https://content.copera.org/wp-content/uploads/2026/10/nirs-overly-optimistic-231x300.png 231w, https://content.copera.org/wp-content/uploads/2026/10/nirs-overly-optimistic-768x998.png 768w, https://content.copera.org/wp-content/uploads/2026/10/nirs-overly-optimistic-1182x1536.png 1182w, https://content.copera.org/wp-content/uploads/2026/10/nirs-overly-optimistic.png 1220w" sizes="auto, (max-width: 788px) 100vw, 788px" /><figcaption class="wp-element-caption">Image credit: National Institute on Retirement Security</figcaption></figure>



<h2 class="wp-block-heading">The Role of Pensions in Providing Retirement Security</h2>



<p class="wp-block-paragraph">A defined benefit pension plan has the benefit of helping take the guesswork out of planning for retirement. For most Colorado PERA members, enrollment in the PERA Defined Benefit Plan is automatic and their contributions to the plan are set in statute. That means employees don’t have to opt in or decide how much to save. And when they retire, PERA members can count on receiving reliable and predictable monthly income they can’t outlive.</p>



<p class="wp-block-paragraph">NIRS found strong support for pensions, with 76% of study participants expressing favorable views. A similar percentage said retirement benefits are a very important factor when considering job opportunities.</p>



<p class="wp-block-paragraph">On a local level, a 2025 study found that 81% of State of Colorado employees said retirement benefits were a factor in their decision to work for the State and 83% cited retirement benefits as a factor in their decision to remain in State employment.</p>



<p class="wp-block-paragraph"><strong>READ MORE:</strong> <a href="https://copera.org/pera-on-the-issues/study-confirms-pera-a-valuable-tool-for-recruiting-retaining-public-workers">Study Confirms PERA a Valuable Tool for Recruiting, Retaining Public Workers</a></p>



<p class="wp-block-paragraph">In addition to a defined benefit plan, Colorado PERA also offers all members access to the voluntary PERAPlus 401(k) and some employers offer the PERAPlus 457 Plan,&nbsp;<a href="https://www.copera.org/retirees/peraplus-401-k-457-plans">providing members with additional tools</a>&nbsp;to ensure they have the savings they need to meet their retirement goals. And beginning in 2027, all PERA members will have access to the PERAPlus 457 Plan as well as Roth options for both the 401(k) and 457 Plan.</p>



<p class="wp-block-paragraph">As a growing percentage of American workers express concern about achieving retirement security, PERA is proud to provide stable and reliable retirement income to the more than 730,000 current and former public employees who serve our state.</p>


A woman with short gray hair sits at a table, looking at a laptop with a thoughtful expression. A person walks by in the background inside a modern office space.

Survey: Americans Increasingly Pessimistic About Retirement Security


<p class="wp-block-paragraph">Last month, <a href="https://www.copera.org/pera-on-the-issues/how-pera-retirees-contribute-7-32-billion-to-colorados-economy">we shared how Colorado PERA&#8217;s $4.78 billion in annual retirement distributions flow through the state economy</a>, generating $7.32 billion in total activity and supporting 26,500 jobs. Those numbers are reflected in the lives of thousands of retired teachers, engineers, counselors, and public servants who stay rooted in their communities and keep spending, volunteering, and showing up long after their last paycheck.</p>



<p class="wp-block-paragraph">Take Terri Helm. After 20-plus years as a guidance counselor in Cortez, nestled in the state&#8217;s rural Southwest Mountain region, Helm retired in 2003 and never slowed down. She reads with kids one day a week at a local charter school, has appeared in two community theater productions this year alone, guides field trips at two area museums, and works with the Dolly Parton Imagination Library.</p>


<div class="wp-block-image">
<figure class="alignleft size-thumbnail"><a href="https://content.copera.org/wp-content/uploads/2026/09/terri-helm.jpg"><img loading="lazy" decoding="async" width="150" height="150" src="https://content.copera.org/wp-content/uploads/2026/09/terri-helm-150x150.jpg" alt="PERA retiree Terri Helm" class="wp-image-66890" srcset="https://content.copera.org/wp-content/uploads/2026/09/terri-helm-150x150.jpg 150w, https://content.copera.org/wp-content/uploads/2026/09/terri-helm-600x600.jpg 600w" sizes="auto, (max-width: 150px) 100vw, 150px" /></a><figcaption class="wp-element-caption">PERA retiree Terri Helm</figcaption></figure>
</div>


<p class="wp-block-paragraph">&#8220;I couldn&#8217;t do all that I am doing if I had to work,&#8221; Helm said. It&#8217;s a small window into a pattern the Economic and Fiscal Impacts report captures at scale. Because PERA benefits arrive as a predictable monthly check rather than a market-dependent withdrawal, retirees keep spending steadily in their hometowns even when the broader economy wobbles. This is the &#8220;automatic stabilizing effect&#8221; the report credits with propping up rural business districts.</p>



<p class="wp-block-paragraph">That stability matters most in places like Cortez and Delta County, the latter on the Western Slope, where Roger Fulks taught school for more than 30 years before retiring in 2000. Roger has spent much of his retirement as a volunteer advocate, showing up at county meetings with a clear message: PERA payments function as both personal income and a boost to local commerce.</p>


<div class="wp-block-image">
<figure class="alignright size-thumbnail"><a href="https://content.copera.org/wp-content/uploads/2026/09/roger-fulks-e1788962602756.jpg"><img loading="lazy" decoding="async" width="150" height="150" src="https://content.copera.org/wp-content/uploads/2026/09/roger-fulks-e1788962602756-150x150.jpg" alt="PERA retiree Roger Fulks" class="wp-image-66889" srcset="https://content.copera.org/wp-content/uploads/2026/09/roger-fulks-e1788962602756-150x150.jpg 150w, https://content.copera.org/wp-content/uploads/2026/09/roger-fulks-e1788962602756-600x600.jpg 600w" sizes="auto, (max-width: 150px) 100vw, 150px" /></a><figcaption class="wp-element-caption">PERA retiree Roger Fulks</figcaption></figure>
</div>


<p class="wp-block-paragraph">&#8220;We&#8217;re all grandmas and grandpas, and we&#8217;re buying cars, we&#8217;re buying toys, we&#8217;re buying groceries,&#8221; Fulks said. &#8220;Nobody sees us as an economic engine, but we are one.&#8221; The report bears that out. Statewide, every dollar of PERA benefits generates roughly $1.53 in total economic output as it moves through grocery stores, pharmacies, and main street shops. And in smaller counties with fewer large employers, that retiree spending carries outsized weight relative to the local payroll.</p>



<p class="wp-block-paragraph">Then there&#8217;s Beverly Green, a retired educator in Greeley who has turned retirement into something close to a full-time civic calendar. She serves lunch at the Greeley Senior Center every Monday, has ushered at the Union Colony Civic Center for two decades, and holds leadership roles with two separate retired-educator associations, including a stint on the Colorado Education Association&#8217;s statewide board.</p>


<div class="wp-block-image">
<figure class="alignleft size-full"><a href="https://content.copera.org/wp-content/uploads/2026/09/beverly-green.jpg"><img loading="lazy" decoding="async" width="96" height="141" src="https://content.copera.org/wp-content/uploads/2026/09/beverly-green.jpg" alt="PERA retiree Beverly Green" class="wp-image-66888"/></a><figcaption class="wp-element-caption">PERA retiree Beverly Green</figcaption></figure>
</div>


<p class="wp-block-paragraph">&#8220;Once you start (your public sector career), you realize how rewarding it can be,&#8221; Green said, &#8220;through the differences you make—big or small—and the people you meet along the way.&#8221;</p>



<p class="wp-block-paragraph">Green’s story points to a quieter piece of the report&#8217;s findings: real estate, healthcare, finance, and retail account for nearly two-thirds of the economic value generated by retiree spending, the same everyday categories—housing, medical care, groceries—that compose Beverly&#8217;s monthly budget and, by extension, Greeley&#8217;s Weld County economy.</p>



<p class="wp-block-paragraph">None of these retirees set out to be an economic statistic. Helm wanted kids to have somewhere to turn. Fulks wanted his students to graduate. Green wanted to give back to a community that gave her a home.</p>



<p class="wp-block-paragraph">But their steady habits of spending locally, volunteering consistently, and paying taxes are precisely what the Economic and Fiscal Impacts report measures when it tallies $406.6 million in state and local tax revenue and $1.84 billion in labor income tied to PERA distributions each year.</p>



<p class="wp-block-paragraph">It&#8217;s a reminder that behind every regional map and per-capita figure in the report is a retired public servant still showing up for their neighbors—at the senior center, the county fair, or the back of a middle school classroom. Their pensions provide secure retirement while supporting a sustained investment in the communities they’ve chosen to call home.</p>



<p class="wp-block-paragraph"><em>Read the full </em><a href="https://content.copera.org/wp-content/uploads/2026/06/PACEY-2026.pdf"><em>2026 Economic and Fiscal Impacts report</em></a><em> for a county-by-county breakdown of PERA&#8217;s reach across Colorado.</em></p>


Three panels feature photos of PERA retiree Roger Fulks (Delta County), Terri Helm (Cortez), and Beverly Green (Greeley) with colorful backgrounds and names in white text.

How Colorado Retirees Sustain Their Communities Long After Retirement


<p class="wp-block-paragraph">Each year, retirement payments to former public employees quietly boost local economies across the state of Colorado.</p>



<p class="wp-block-paragraph">A June 2026 report by Pacey Nehls Economic Consulting shows Colorado PERA paid $4.78 billion in benefits to more than 119,000 state residents in 2025. As retirees spent those dollars on everyday needs like groceries, housing, and healthcare, that money flowed through local businesses to produce $7.32 billion in total economic activity, with $3.71 billion added to Colorado’s state economy.</p>



<h2 class="wp-block-heading has-dark-blue-river-color has-text-color has-link-color has-medium-font-size wp-elements-91dcf1e032392bcb8bb9fb3ffdc003e1"><strong>A Multiplier Effect Across the State</strong></h2>



<p class="wp-block-paragraph">The impact doesn’t stop with the first purchase. Businesses that receive retiree spending turn around and spend that money on their own supplies, payroll, and other needs. That sets off round after round of new spending, multiplying the impact of every pension check.</p>



<p class="wp-block-paragraph">Pacey Nehls estimates that for every $1 paid out in PERA benefits, $1.53 in economic activity is generated in Colorado, which has helped to sustain 26,500 local jobs and $1.84 billion in wages for workers statewide.</p>



<p class="wp-block-paragraph">Retiree spending also yields $406.6 million in taxes back to state and local governments. Retirees help pay for the things Colorado communities consistently rely on, from county roads to emergency services.</p>



<h2 class="wp-block-heading has-dark-blue-river-color has-text-color has-link-color has-medium-font-size wp-elements-cf0d41e2d7a17c03eda119066cd834c2"><strong>Where the Money Stays and Why It Matters</strong></h2>



<p class="wp-block-paragraph">According to the report, consumer-facing sectors like real estate, healthcare, finance, and retail businesses see the biggest benefit, accounting for nearly two-thirds of what retirees spend.</p>



<p class="wp-block-paragraph">A major reason these dollars circulate so effectively across local businesses is that most of the money stays in Colorado. More than 85% of total benefit distributions are paid directly to retirees who continue to live in the state, and those funds repeatedly change hands as retirees pay taxes and frequent local shops.</p>



<p class="wp-block-paragraph">And although over half of total distributions go to the Metro Denver region, PERA payments carry an outsized impact in rural communities. In regions like the Pueblo-Southern Mountains and the San Luis Valley, pension distributions account for more than 10% of total local payroll — compared to less than 2% in the Denver metro area.</p>



<p class="wp-block-paragraph"><a></a>Because the PERA Defined Benefit Plan provides retirement income for life, these monthly distributions remain fixed and predictable regardless of market volatility. For rural towns, that steady spending helps keep local businesses and tax revenue stable, even when the broader economy slows down.</p>



<figure class="wp-block-image size-large"><a href="https://secure.copera.org/staticcontent/www/index.html#economic-impact" target="_blank" rel=" noreferrer noopener" class="broken_link"><img loading="lazy" decoding="async" width="1024" height="685" src="https://content.copera.org/wp-content/uploads/2026/08/pera-benefits-by-county-1024x685.png" alt="A map showing PERA benefits paid by county." class="wp-image-66752" srcset="https://content.copera.org/wp-content/uploads/2026/08/pera-benefits-by-county-1024x685.png 1024w, https://content.copera.org/wp-content/uploads/2026/08/pera-benefits-by-county-300x201.png 300w, https://content.copera.org/wp-content/uploads/2026/08/pera-benefits-by-county-768x514.png 768w, https://content.copera.org/wp-content/uploads/2026/08/pera-benefits-by-county-1536x1028.png 1536w, https://content.copera.org/wp-content/uploads/2026/08/pera-benefits-by-county-2048x1370.png 2048w, https://content.copera.org/wp-content/uploads/2026/08/pera-benefits-by-county-600x400.png 600w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></a><figcaption class="wp-element-caption">PERA benefits land in the bank accounts of retirees in every corner of the state, from the Front Range to the Western Slope and Eastern plains. Click or tap for an interactive county-by-county breakdown.</figcaption></figure>



<h2 class="wp-block-heading has-dark-blue-river-color has-text-color has-link-color has-medium-font-size wp-elements-2c3d22c36ea6bc1e6efa0beceb07d544"><strong>Two Decades of Growth</strong></h2>



<p class="wp-block-paragraph">Statewide PERA distributions have climbed 95% since 2009, when annual payments totaled $2.45 billion.</p>



<p class="wp-block-paragraph">Over the past decade, PERA&#8217;s pooled investments have returned an average of 9.5% annually, well above the fund&#8217;s 7.25% target rate of return. Those investment gains, not just contributions from employers and employees, have made up more than 60% of all additions to the fund since 1987.</p>



<p class="wp-block-paragraph">Every dollar paid to a retired teacher, State Trooper, or local government employee keeps moving through Colorado&#8217;s economy long after it lands in a bank account. And behind these statewide figures are individual stories of retirees who&#8217;ve chosen to stay rooted in the communities where they built their careers and continue to support their neighbors.</p>



<p class="wp-block-paragraph">For more information and access to detailed breakdowns by region and county, download the <a href="https://content.copera.org/wp-content/uploads/2026/06/PACEY-2026.pdf">2026 </a><a href="https://content.copera.org/wp-content/uploads/2026/06/PACEY-2026.pdf" target="_blank" rel="noreferrer noopener"><em>Economic and Fiscal Impacts</em></a> report.</p>



<p class="wp-block-paragraph"><a href="https://www.copera.org/pera-on-the-issues/subscribe" target="_blank" rel="noreferrer noopener">Subscribe to our biweekly newsletter</a>&nbsp;to receive updates right in your email inbox.</p>


A gray-haired woman holding a bunch of radishes in a supermarket produce aisle.

How PERA Retirement Benefits Contribute $7.32 Billion to Colorado’s Economy


<p class="wp-block-paragraph">Most PERA members do not pay into Social Security while they work for a PERA employer; PERA serves as a substitute for Social Security, providing retirement income as well as survivor and disability benefits. However, many PERA members also expect to receive a Social Security benefit in retirement due to outside private-sector work.</p>



<p class="wp-block-paragraph">We’re taking a look at where things stand and the latest efforts to improve Social Security’s finances.</p>


<div class="callout-heading"><p><em>Did you know? Colorado PERA has been providing public employees with retirement and other benefits since 1931, longer than Social Security. PERA and Social Security are separate benefit programs and neither affects the other. Learn more about <a href="https://www.copera.org/retirees/benefit-basics-for-retirees/pera-and-social-security" target="_blank" rel="noopener">PERA and Social Security</a>.</em></p>
</div>


<h2 class="wp-block-heading has-dark-blue-river-color has-text-color has-medium-font-size"><strong>Social Security’s financial health</strong></h2>



<p class="wp-block-paragraph">Every year, the Social Security and Medicare Boards of Trustees release a report outlining the financial status of the trust funds from which Social Security and Medicare benefits are paid. According to <a href="https://www.ssa.gov/oact/trsum/" target="_blank" rel="noreferrer noopener" class="broken_link">the most recent report</a>, the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivor benefits, has enough money to pay full benefits until late 2032. The Disability Insurance (DI) Trust Fund is in better shape and is expected to continue paying full benefits through at least 2100. If the two funds were combined, they would deplete their reserves in 2034, according to the report.</p>



<p class="wp-block-paragraph">It’s important to note that the OASI trust fund will not run completely out of money in 2032; contributions continue to flow into the trust fund through federal payroll taxes, and that regular income is enough to fund 78 percent of scheduled benefits, according to the Trustees report.</p>



<h2 class="wp-block-heading has-dark-blue-river-color has-text-color has-medium-font-size"><strong>Windfall Elimination Provision and Government Pension Offset</strong></h2>



<p class="wp-block-paragraph">In early 2025, then-President Joe Biden signed into law the Social Security Fairness Act, which repealed Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). The WEP and GPO had been in place for decades and reduced Social Security benefits for retirees who also received a pension for work not covered by Social Security.</p>



<p class="wp-block-paragraph">For PERA members, that means retirees who previously saw their Social Security benefits reduced because they receive a benefit from PERA now receive full earned benefits from both PERA and Social Security.</p>



<p class="wp-block-paragraph">That’s great news for retirees, but the higher benefit payments from Social Security put additional strain on the system’s finances and <a href="https://finance.yahoo.com/news/social-security-fairness-act-speeds-up-the-trust-funds-insolvency-wharton-professor-says-160245952.html" target="_blank" rel="noreferrer noopener">may speed up the rate</a> at which the OASI trust fund spends down its reserves by six months.</p>



<h2 class="wp-block-heading has-dark-blue-river-color has-text-color has-medium-font-size"><strong>Proposing solutions</strong></h2>



<p class="wp-block-paragraph">The latest Social Security Trustees report has renewed interest among Congressional lawmakers and others to find solutions to the program’s funding struggles.</p>



<p class="wp-block-paragraph">One such proposal comes from Sen. Bernie Moreno of Ohio and Sen. Elizabeth Warren of Massachusetts. They’re calling for <a href="https://abcnews.com/Politics/social-security-fix-proposed-sens-elizabeth-warren-bernie/story?id=134253518" target="_blank" rel="noreferrer noopener">lifting the current cap</a> on income subject to payroll taxes for Social Security, which would result in higher earners paying more into the system. Doing so could add trillions of dollars in additional funding to Social Security over the next decade, they say.</p>



<p class="wp-block-paragraph">A separate proposal from the nonpartisan Committee for a Responsible Federal Budget (CRFB) focuses on reducing expenses by <a href="https://www.investopedia.com/proposal-aims-to-cap-social-security-benefits-above-usd100-000-for-couples-to-ad-12019744" target="_blank" rel="noreferrer noopener" class="broken_link">placing a limit on Social Security benefits</a>. Under the CRFB proposal, benefits would be capped at $100,000 per year, which could save the program more than $100 billion over 10 years, the group said. </p>



<p class="wp-block-paragraph">To encourage action on the issue, a bipartisan group of lawmakers <a href="https://www.cnbc.com/2026/07/14/social-security-reform.html" target="_blank" rel="noreferrer noopener">introduced a bill known as the PROMISE Act</a>, which lays out procedures for introducing and considering legislation to improve Social Security’s solvency. The bill would also create a process for reviewing and addressing the system’s finances every 10 years to ensure Congress is proactive in tackling future shortfalls.</p>



<p class="wp-block-paragraph"><em>PERA On The Issues</em> will continue to follow this issue and provide updates as legislators tackle Social Security’s finances. <a href="https://www.copera.org/pera-on-the-issues/subscribe" target="_blank" rel="noreferrer noopener">Subscribe to our biweekly newsletter</a> to receive updates right in your email inbox.</p>


The U.S. Capitol Building with a Social Security card and dollar bills superimposed.

The Latest on Social Security’s Finances and Future


<p class="wp-block-paragraph">It’s no secret that Social Security is facing financial trouble in the near future; the program is expected to deplete its reserves in less than ten years, <a href="https://www.ssa.gov/oact/trsum/" target="_blank" rel="noreferrer noopener" class="broken_link">according to the latest estimates</a>.</p>



<p class="wp-block-paragraph">There have been many suggestions for improving Social Security’s finances, one of which would involve requiring all public employees to participate in Social Security. Some public-sector pension plans—like Colorado PERA—serve as a replacement for Social Security, so neither workers nor their employers contribute via payroll deductions.</p>



<p class="wp-block-paragraph">However, such a shift in federal policy could have unintended negative consequences, according to a recently released report from the Coalition to Preserve Retirement Security (CPRS) and benefits consulting firm Segal. <em>(The Colorado PERA Board of Trustees employs Segal as its actuarial consultant.)</em></p>



<p class="wp-block-paragraph">In <a href="https://www.segalco.com/consulting-insights/the-impact-on-the-public-sector-of-mandating-social-security/">“The</a><a href="https://www.segalco.com/consulting-insights/the-impact-on-the-public-sector-of-mandating-social-security/" target="_blank" rel="noreferrer noopener"> Hazards of Mandating Social Security on the Public Sector,</a><a href="https://www.segalco.com/consulting-insights/the-impact-on-the-public-sector-of-mandating-social-security/">”</a> the authors argue that mandatory participation could jeopardize existing retirement plans and lead to additional costs for public employees, their employers, and ultimately taxpayers.</p>



<h2 class="wp-block-heading has-dark-blue-river-color has-text-color has-medium-font-size"><strong>Background</strong></h2>



<p class="wp-block-paragraph">Many states have been providing their public employees with retirement benefits longer than Social Security has been around. For example, the Colorado General Assembly created Colorado PERA in 1931, four years before the federal government established Social Security.</p>



<p class="wp-block-paragraph">It wasn’t until 1950 that Social Security began accepting state and local government workers into the program. Colorado was among the states that stuck with its own plan to provide retirement, disability, and survivor benefits to the majority of its public workforce (some PERA members and members of other public pension plans may contribute to both a pension and Social Security).</p>


<div class="callout-heading"><p><em>Note: If you’re a PERA member who has earned a Social Security benefit from other employment, you’ll receive benefit payments from both PERA and Social Security in retirement. Learn more on the </em><a href="https://copera.org/retirees/benefit-basics-for-retirees/pera-and-social-security"><em>PERA and Social Security page</em></a><em>.</em></p>
</div>


<p class="wp-block-paragraph">According to the CPRS report, more than four million public employees across the country today are not covered by Social Security, and nearly 250,000 of them are in Colorado.</p>



<h2 class="wp-block-heading has-dark-blue-river-color has-text-color has-medium-font-size"><strong>The impact of mandatory Social Security</strong></h2>



<p class="wp-block-paragraph">The potential implications of requiring participation in Social Security can be difficult to predict, since each state or local government and plan is different and could take a different approach.</p>



<p class="wp-block-paragraph">For states that would opt to preserve existing plans and also join Social Security, there could be significant added costs. Employees and employers both contribute 6.2 percent of payroll through Federal Insurance Contributions Act (FICA) taxes. Adding those contributions to existing payroll deductions for public employee retirement benefits would eat into workers’ paychecks and put financial strain on school districts, state and local governments, and other public employers.</p>



<p class="wp-block-paragraph">The CPRS report estimates the cost of additional contributions nationwide to be somewhere between $45 billion and $60 billion in the first five years. In Colorado alone, mandatory Social Security could cost more than $2.5 billion, according to the report.</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="703" src="https://content.copera.org/wp-content/uploads/2026/06/cprs-segal-ss-cost-map-1024x703.png" alt="A map showing the estimated cost of requiring participation in Social Security in all 50 states. Colorado is shown in the &quot;greater than $1 billion&quot; category." class="wp-image-65251" srcset="https://content.copera.org/wp-content/uploads/2026/06/cprs-segal-ss-cost-map-1024x703.png 1024w, https://content.copera.org/wp-content/uploads/2026/06/cprs-segal-ss-cost-map-300x206.png 300w, https://content.copera.org/wp-content/uploads/2026/06/cprs-segal-ss-cost-map-768x527.png 768w, https://content.copera.org/wp-content/uploads/2026/06/cprs-segal-ss-cost-map-1536x1054.png 1536w, https://content.copera.org/wp-content/uploads/2026/06/cprs-segal-ss-cost-map-2048x1406.png 2048w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure>



<p class="wp-block-paragraph">There’s also the potential impact on existing retirement plans to consider. Even if existing plans closed to new members to try to offset the added cost of FICA taxes, for example, the plans would still have to pay retirement benefits their members had earned. And without contributions coming in from working members and their employers, those plans would face additional risk and uncertainty.</p>



<p class="wp-block-paragraph">In addition, public retirement plans are structured to attract and retain qualified public employees and may provide better benefits that Social Security, especially for workers in demanding and dangerous positions. For example, plans that cover first responders often allow members to retire earlier than plans that don’t. Forcing all employees into Social Security could remove this benefit and make it harder to hire and maintain a talented public workforce.</p>



<p class="wp-block-paragraph"><strong>RELATED:</strong> <a href="https://www.copera.org/pera-on-the-issues/study-confirms-pera-a-valuable-tool-for-recruiting-retaining-public-workers">Study Confirms PERA a Valuable Tool for Recruiting, Retaining Public Workers</a></p>



<h2 class="wp-block-heading has-dark-blue-river-color has-text-color has-medium-font-size"><strong>Would it help Social Security?</strong></h2>



<p class="wp-block-paragraph">Requiring all public employees to participate in Social Security isn’t a sure bet when it comes to shoring up the program’s finances. While increasing the number of participants would increase the amount of money coming into the Social Security trust funds, those new members would also add liabilities—earned benefits—over time, leading to additional expenses for Social Security.</p>



<p class="wp-block-paragraph">Improving the financial sustainability of the Social Security program is an important goal, and one that will likely require a great deal of discussion between legislators, government officials, and other stakeholders.</p>



<p class="wp-block-paragraph">While requiring public employee participation may be a part of that conversation, it’s important to keep in mind the potential impacts on employees, employers, governments, and taxpayers who could face additional costs, uncertainty, and other risks.</p>


Two women walk down a hallway, one holding an open folder while they talk. Both are wearing ID lanyards and business attire. Large windows line one side of the corridor.

Should Public Employees Be Required to Participate in Social Security?


<p class="wp-block-paragraph">News headlines often declare that Americans aren’t saving enough money. In fact, <a href="https://www.bankrate.com/banking/savings/emergency-savings-report/">a recent survey by Bankrate</a> found less than half of those surveyed had enough money to afford a $1,000 emergency expense.</p>



<p class="wp-block-paragraph">April 6 through April 10 is&nbsp;<a href="https://americasavesweek.org/" target="_blank" rel="noreferrer noopener">America Saves Week</a>, an annual initiative of the Consumer Federation of America, a nonprofit consumer advocacy organization. It promotes the value of saving money and the importance of making a plan to save.</p>



<p class="wp-block-paragraph">The America Saves Week campaign encompasses five themes throughout the week to help make the process of building a saving plan less overwhelming. It’s all about taking small steps that make a big difference in your financial future.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Building a strong foundation</h2>



<p class="wp-block-paragraph">A strong financial foundation begins with knowing where you are and where you want to go. That means taking time to understand your income, track your spending, and identify your goals.</p>



<p class="wp-block-paragraph">One of the easiest ways to strengthen your financial foundation is to&nbsp;automate your savings. When you schedule regular transfers from your checking to your savings account, you remove the temptation to spend first and save later. You can start small with just $10 or $20 from each paycheck and increase the amount over time.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Expect the unexpected</h2>



<p class="wp-block-paragraph">Whether it’s a flat tire, a medical bill, or a surprise home repair, unexpected expenses can happen any time. Having an emergency fund—even a modest one of just $500—can protect you from relying on credit cards or feeling stressed when something goes wrong.</p>



<p class="wp-block-paragraph">That first $500 is your first win. From there, you can build toward a larger goal, like one month of living expenses, and eventually three to six months.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Dream big and plan with purpose</h2>



<p class="wp-block-paragraph">Beyond savings for emergencies, you might also be working toward a major milestone in life, such as buying a home, starting a family, or paying for education. Identifying the milestones that are important to you and being deliberate about saving can help focus your efforts and gives you something tangible to work toward.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Rewrite the debt narrative</h2>



<p class="wp-block-paragraph">Rewriting the debt narrative is all about shifting your mindset: Every payment you make, no matter how small, moves you closer to financial freedom and confidence.</p>



<p class="wp-block-paragraph">Tackling debt can feel overwhelming, but two popular strategies can make it more manageable. The snowball method involves focusing on your smallest debt first for quick wins and motivation, while the avalanche method focuses on paying off your highest-interest debt first to save the most money over time.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Your story, your future</h2>



<p class="wp-block-paragraph">Whatever your savings goal, start small and build on that momentum over time. Financial success rarely happens overnight. It’s built through small, consistent habits that add up over time. Every intentional step you take today will help shape the life you want tomorrow.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">PERA resources to build financial confidence</h2>



<p class="wp-block-paragraph">Our <a href="https://copera.org/financial-wellness-library">Financial Wellness Library</a> contains articles on topics such as saving and planning, creating a budget, and getting ready to retire.</p>



<p class="wp-block-paragraph">We also offer a variety of <a href="https://copera.org/webinars/">webinars</a>—live and on-demand—to help PERA members better understand their benefits and retire with confidence.</p>



<p class="wp-block-paragraph"><strong>MORE RESOURCES:</strong></p>



<ul class="wp-block-list">
<li><a href="https://www.copera.org/forms-resources">Forms and Resources</a></li>



<li><a href="https://secure.copera.org/secure/calcs/online-calculators/OnlineCalculators.jsp">Calculators (login required)</a></li>
</ul>


Two people review a receipt and use a calculator amid coins, bills, and documents on the table.

America Saves Week 2026: Do You Have a Savings Plan?


<p class="wp-block-paragraph">A new report is shedding light on the challenges many workers continue to face when saving for retirement.</p>



<p class="wp-block-paragraph">According to the National Institute on Retirement Security (NIRS), nearly half of working-age Americans don’t participate in any employer-sponsored retirement plan and struggle to reach recommended levels of savings. In fact, many have little to no savings at all, NIRS found.</p>



<p class="wp-block-paragraph">Despite decades of policy changes and other efforts to bolster retirement security, it’s clear that many workers—especially those in the private sector—are still unable to save for retirement on their own.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">The state of workers’ retirement readiness</h2>



<p class="wp-block-paragraph">For its report titled, <a href="https://www.nirsonline.org/research/retirementinamerica2026/" target="_blank" rel="noreferrer noopener">“Retirement in America: An Analysis of Retirement Preparedness Among Working-Age Americans,”</a> NIRS researchers used data from the U.S. Census Bureau’s Survey of Income and Program Participation. That data is as of December 2022.</p>



<p class="wp-block-paragraph">Unsurprisingly, NIRS found that employees who have access to a retirement plan through work are much more likely to save money for retirement than those who don’t. Regardless of plan access, however, the analysis found most workers still aren’t saving enough.</p>



<p class="wp-block-paragraph">Among all working-age adults (defined here as workers between the ages of 21 and 64), the median balance of defined contribution (DC) retirement accounts like 401(k)s was just $955 in 2022. Examining only accounts that had a positive balance and eliminating those with no savings at all, the median was $40,000. According to NIRS, workers with positive DC account balances had reached a median of just 18% of their recommended savings based on age.</p>



<p class="wp-block-paragraph">There are many reasons why people might not save as much money as experts recommend, including competing financial priorities such as living expenses and debt.</p>



<p class="wp-block-paragraph">Taking on debt to attend college, for example, can simultaneously improve a person’s access to employment and benefits while also making it more difficult to achieve savings goals. NIRS found that while adults who carry student loan debt are more likely to have and participate in a retirement plan through their employer, they also tend to have lower account balances and lower net worth.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Public pensions and retirement security</h2>



<figure class="wp-block-image size-large"><a href="https://content.copera.org/wp-content/uploads/2026/03/nirs-db-and-dc-participation.png"><img loading="lazy" decoding="async" width="1024" height="671" src="https://content.copera.org/wp-content/uploads/2026/03/nirs-db-and-dc-participation-1024x671.png" alt="Chart showing changes in private sector retirement plan participation from 1979 to 2023, with declining defined benefit plans and increasing defined contribution plans." class="wp-image-63927" srcset="https://content.copera.org/wp-content/uploads/2026/03/nirs-db-and-dc-participation-1024x671.png 1024w, https://content.copera.org/wp-content/uploads/2026/03/nirs-db-and-dc-participation-300x197.png 300w, https://content.copera.org/wp-content/uploads/2026/03/nirs-db-and-dc-participation-768x503.png 768w, https://content.copera.org/wp-content/uploads/2026/03/nirs-db-and-dc-participation-1536x1007.png 1536w, https://content.copera.org/wp-content/uploads/2026/03/nirs-db-and-dc-participation-2048x1342.png 2048w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></a></figure>



<p class="wp-block-paragraph">Access to and participation in a retirement plan is much higher in the public sector, where many employees have access to a defined benefit (DB) plan, also known as a pension. For example, NIRS found that 88% of public administration workers and 74% of educational service workers participate in a retirement plan while overall participation is around 50%. As of the end of 2022, just 17 percent of all American workers were participating in a DB plan.</p>



<p class="wp-block-paragraph">A DB plan has the benefit of making saving for retirement easy—for most Colorado PERA members, enrollment in the PERA DB Plan is automatic and their contributions to the plan are set in statute. That means employees don’t have to opt in or decide how much to save. And when they retire, PERA members can count on receiving reliable and predictable monthly income they can’t outlive.</p>



<p class="wp-block-paragraph">Colorado PERA also offers all members access to the voluntary PERAPlus 401(k) and some employers offer the PERAPlus 457 Plan, <a href="https://www.copera.org/retirees/peraplus-401-k-457-plans">providing members with additional tools</a> to ensure they have the savings they need to meet their retirement goals.</p>



<p class="wp-block-paragraph">While saving for retirement continues to be a challenge for many American workers, PERA remains committed to providing a secure retirement to the hardworking Coloradans who serve our state.</p>



<p class="wp-block-paragraph"><strong>RELATED: </strong><a href="https://www.copera.org/pera-on-the-issues/study-confirms-pera-a-valuable-tool-for-recruiting-retaining-public-workers" target="_blank" rel="noreferrer noopener">Study Confirms PERA a Valuable Tool for Recruiting, Retaining Public Workers</a></p>


A woman sitting in front of a computer and using a calculator.

Report: Many Workers Struggle to Save for Retirement on Their Own


<p class="wp-block-paragraph">As the year wraps up, we’re taking a look back at the articles that captured the attention of <em>PERA On The Issues</em> readers in 2025. Here are our most-read articles of the year.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">1. Congress passes Social Security Fairness Act and repeals WEP and GPO</h2>



<p class="wp-block-paragraph">Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) have long been topics of interest to <em>PERA On The Issues</em> readers. It’s no surprise that news about Congress passing the Social Security Fairness Act, which repealed both WEP and GPO, drew a great deal of attention. Our articles on the <a href="https://copera.org/pera-on-the-issues/president-biden-signs-wep-gpo-repeal-bill-into-law" target="_blank" rel="noreferrer noopener">bill’s signing</a>, initial estimates that the bill <a href="https://copera.org/pera-on-the-issues/social-security-fairness-act-rollout-could-take-a-year-or-more" target="_blank" rel="noreferrer noopener">would take a year or more to implement</a>, and then the announcement that the Social Security Administration was <a href="https://copera.org/pera-on-the-issues/social-security-administration-expediting-benefit-processing-for-those-affected-by-wep-gpo" target="_blank" rel="noreferrer noopener">expediting benefit processing</a> together accounted for more than a quarter of all visits to the blog this year.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">2. IRS updates contribution limits and other tax provisions for 2026</h2>



<p class="wp-block-paragraph">With 2025 winding down, many people are already looking ahead to 2026 and making financial preparations for the new year. Our article <a href="https://www.copera.org/pera-on-the-issues/irs-releases-2026-tax-brackets-contribution-limits-other-tax-updates" target="_blank" rel="noreferrer noopener">highlighting inflation adjustments</a> for retirement plan contribution limits, health savings accounts, tax brackets, and other tax provisions quickly became one of our most-read articles of the year.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">3. Lawmakers propose and pass PERA-related legislation</h2>



<p class="wp-block-paragraph">During the 2025 legislative session, state lawmakers introduced seven bills that pertained to Colorado PERA, and our article <a href="https://www.copera.org/pera-on-the-issues/2025-proposed-pera-related-legislation-status" target="_blank" rel="noreferrer noopener">tracking those bills throughout the session</a> was the second most popular article of the year. Of those seven bills, <a href="https://www.copera.org/pera-on-the-issues/colorado-legislature-passes-four-pera-related-bills-in-2025-session" target="_blank" rel="noreferrer noopener">four passed and became law</a>.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">4. New tax deduction for seniors included in federal legislation</h2>



<p class="wp-block-paragraph">The tax and spending bill commonly known as the One Big Beautiful Bill Act (OBBBA) included <a href="https://www.copera.org/pera-on-the-issues/news-you-should-know-how-the-new-6k-deduction-for-seniors-works" target="_blank" rel="noreferrer noopener" class="broken_link">a new tax deduction for older Americans</a> that takes effect for the 2025 tax year. The deduction—up to $6,000 per eligible taxpayer—applies to taxpayers who are 65 or older and begins to phase out for individuals with modified adjusted gross income over $75,000.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">5. The OBBBA makes changes to health and food assistance programs</h2>



<p class="wp-block-paragraph">In addition to the new senior tax credit, the One Big Beautiful Bill Act <a href="https://www.copera.org/pera-on-the-issues/what-the-one-big-beautiful-bill-act-means-for-retiree-health-care" target="_blank" rel="noreferrer noopener">made changes to federal assistance programs</a> like SNAP and Medicaid. In particular, the bill established stricter guidelines for who can qualify for assistance under those programs. It also changed some enrollment processes for people who shop for health insurance on their own instead of receiving coverage through an employer.</p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<p class="wp-block-paragraph">We want to thank everyone who subscribes and reads&nbsp;<em>PERA On The Issues</em>. We appreciate your readership, and we look forward to helping you stay informed in the new year.</p>



<p class="wp-block-paragraph">If you haven’t already, be sure to&nbsp;<a href="https://www.copera.org/pera-on-the-issues/subscribe">sign up for our biweekly newsletter</a>&nbsp;to stay in the loop in 2026.</p>


Year in Review: Our Top Articles of 2025


<p class="wp-block-paragraph">The IRS recently announced adjustments to marginal tax rates, retirement plan contribution limits, and other provisions that will be helpful for financial planning in the new year.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">2025 0BBBA updates</h2>



<p class="wp-block-paragraph">While most of the changes below apply to tax year 2026, the federal tax and spending bill known as the One Big Beautiful Bill Act (OBBBA) made some important changes that apply to tax year 2025.</p>



<p class="wp-block-paragraph">Notably, the standard deduction for 2025 increased to $15,750 for single tax filers and $31,500 for married couples filing jointly.</p>



<p class="wp-block-paragraph">The OBBBA also established <a href="https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors" target="_blank" rel="noreferrer noopener">a new tax deduction for taxpayers who are at least 65 years old</a>. For tax years 2025 through 2028, eligible seniors can deduct an additional $6,000 from their taxable income. <a>The deduction phases out for individuals with modified adjusted gross income over $75,000.</a></p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">2026 retirement plan contribution limits</h2>



<p class="wp-block-paragraph">In the new year, employees <a href="https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500" target="_blank" rel="noreferrer noopener">will be able to set aside more money</a> in defined contribution retirement accounts such as 401(k), 403(b), and 457 plans.</p>



<p class="wp-block-paragraph">The maximum amount a person can contribute to those plans is $24,500 for 2026, an increase of $1,000 from 2025. The catch-up contribution limit for most employees who are 50 or older will increase to $8,000.</p>



<p class="wp-block-paragraph">Under the SECURE 2.0 Act, workers who are 60, 61, 62, or 63 have a higher catch-up contribution limit. That limit remains unchanged for 2026 at $11,250.</p>



<p class="wp-block-paragraph">For individual retirement accounts (IRAs), the annual contribution limit will increase to $7,500 in 2026 and the catch-up contribution limit will be $1,100.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">2026 HSA/FSA contribution limits</h2>



<p class="wp-block-paragraph">The amount of money workers can contribute to medical savings accounts also will increase in 2026.</p>



<ul class="wp-block-list">
<li><strong>HSA:</strong>&nbsp;Individuals enrolled in a high deductible health plan (HDHP) with a health savings account (HSA) will be able to contribute up to $4,400, and those with family coverage will be able to save a maximum of $8,750.</li>



<li><strong>FSA:</strong>&nbsp;For workers who don’t have an HDHP with an HSA and instead use a flexible spending account (FSA), the maximum contribution for 2026 is $3,400. For plans that allow unused balances to roll over, the maximum amount that can be rolled over will increase to $680.</li>
</ul>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">2026 tax rates</h2>



<p class="wp-block-paragraph">Below are updated marginal tax rates for single taxpayers and married couples filing jointly. Visit&nbsp;<a href="https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill" target="_blank" rel="noreferrer noopener">the IRS website</a>&nbsp;for more tax tables and additional details.</p>



<p class="wp-block-paragraph">Note that since these changes are for tax year 2026, they will generally apply to tax returns filed in 2027;&nbsp;<a href="https://copera.org/pera-on-the-issues/updated-tax-brackets-contribution-limits-and-more-to-know-for-2025" target="_blank" rel="noreferrer noopener">2025 tax rates</a>&nbsp;will apply to returns filed in 2026.</p>



<ul class="wp-block-list">
<li><strong>37%</strong> for incomes over $640,600 ($768,700 for married couples filing jointly)</li>



<li><strong>35%</strong> for incomes over $256,225 ($512,450 for married couples filing jointly)</li>



<li><strong>32%</strong> for incomes over $201,775 ($403,550 for married couples filing jointly)</li>



<li><strong>24%</strong> for incomes over $105,700 ($211,400 for married couples filing jointly)</li>



<li><strong>22%</strong> for incomes over $50,400 ($100,800 for married couples filing jointly)</li>



<li><strong>12%</strong> for incomes over $12,400 ($24,800 for married couples filing jointly)</li>



<li><strong>10% </strong>for incomes of $12,400 or less ($24,800 for married couples filing jointly)</li>
</ul>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">2026 standard deduction</h2>



<p class="wp-block-paragraph">The standard deduction for 2026 will increase to $16,100 for single tax filers and $32,200 for married couples filing jointly.</p>



<p class="wp-block-paragraph">Taxpayers who are 65 or older can take an additional standard deduction, which is also adjusted for inflation. For tax year 2026, that amount is $2,050 for single taxpayers and $1,650 for married taxpayers or surviving spouses.</p>



<p class="wp-block-paragraph">Visit <a href="https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill" target="_blank" rel="noreferrer noopener">the IRS website</a> for more information on these and other tax changes.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">PERA benefits and taxes</h2>



<p class="wp-block-paragraph">Colorado PERA benefits are subject to federal income tax, as well as applicable state and local taxes. PERA retirees who would like to update their tax withholding can do so by&nbsp;<a href="https://www.copera.org/member-login-registration" target="_blank" rel="noreferrer noopener">logging in</a>&nbsp;to their secure member account or completing a paper Form W-4P.</p>



<p class="wp-block-paragraph">Retirees and benefit recipients can expect to receive their 1099-R tax forms for tax year 2025 in January 2026.</p>



<p class="wp-block-paragraph">Learn more at&nbsp;<a href="https://www.copera.org/taxes-on-benefits" target="_blank" rel="noreferrer noopener" class="broken_link">copera.org/taxes-on-benefits</a>.</p>


A calculator, pen, and several hundred-dollar bills rest on U.S. individual income tax return forms.

IRS Releases 2026 Tax Brackets, Contribution Limits, Other Tax Updates


<p class="wp-block-paragraph">A recent assessment finds the funding levels of public pension plans across the United States have generally improved in recent years despite market volatility and other challenges.</p>



<p class="wp-block-paragraph">It’s a positive sign that while access to defined benefit pensions in the private sector has dwindled, many states remain committed to providing their public employees with a secure retirement.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Assessing the financial health of public pensions</h2>



<p class="wp-block-paragraph">Pew Research Center, a nonpartisan research firm, keeps track of the financial health of public pensions in all 50 states. Its latest report focuses on plans’ funded ratios, which provide a comparison between a plan’s assets and its future obligations to members. For example, if a plan is 70% funded, that means the plan currently has 70% of the money it would need to pay out all benefits its retirees and working members have earned to date.</p>



<p class="wp-block-paragraph">In 2023, the most recent year for which Pew has data for each plan, the overall funded ratio for public pensions was 74%. Thirty-five out of 50 states reported funding ratios in 2023 that were higher than in 2022, according to Pew.</p>



<p class="wp-block-paragraph">A key factor Pew examined is net amortization, a measure of whether a plan receives enough funding and income from investments to reduce its unfunded liabilities—the portion of benefit obligations for which the plan does not have money on hand—while also paying benefits. A positive net amortization trend means the fund is bringing in enough money to pay down debt. Pew found most plans, including Colorado PERA, showed positive amortization from 2019 to 2023.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">PERA’s funded status</h2>



<p class="wp-block-paragraph">Thanks to the reforms included in Senate Bill 200 in 2018, PERA is on a path to full funding by 2048. As of December 31, 2024, the combined funded ratio for the five Division Trust Funds (State, School, Local Government, Judicial, and DPS) was 69.2%. In 2018, that number was only 59.8%. Senate Bill 200’s <a href="http://copera.org/automatic-adjustment-provision" target="_blank" rel="noreferrer noopener">Automatic Adjustment Provision</a> (AAP), which adjusts member and employer contributions, retiree annual increases, and the State’s direct distribution to PERA based on our funding progress, has been an important part of that improvement. The AAP is assessed every year so adjustments can be made as needed without requiring legislative intervention.</p>



<p class="wp-block-paragraph">As of the end of 2024, PERA remains on track and adjustments via the AAP will not be necessary in 2026.</p>



<p class="wp-block-paragraph">With budget discussions now underway at the State Capitol, PERA CEO/Executive Director Andrew Roth and Board Chair Hon. Rebecca R. Freyre recently wrote a guest opinion explaining the importance of consistent contributions in keeping PERA on track to reach its funding goal.</p>



<p class="wp-block-paragraph">&#8220;While PERA is on a path to full funding by 2048, it’s important that we stay on that path and follow the plan laid out in SB18-200,” they wrote. “While we’re making progress, we need the General Assembly’s support to keep that momentum going. We all owe it to our members and retirees to stay the course.&#8221; </p>



<p class="wp-block-paragraph">Read more on the <a href="https://www.coloradopolitics.com/2025/11/07/protect-coloradans-retirement-security-opinion/" target="_blank" rel="noreferrer noopener">Colorado Politics website</a>.</p>


Four people review charts and graphs on paper and a tablet at a desk, with a laptop and eyeglasses nearby.

How Are Public Pensions Doing?


<p class="wp-block-paragraph">October is National Retirement Security Month, and as we wrap up the month, we’re reflecting on how PERA has enabled generations of Coloradans who serve their communities to retire with dignity and peace of mind.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">The state of retirement</h2>



<p class="wp-block-paragraph">Surveys often find workers who save for retirement on their own struggle to save enough to support their retirement goals. A <a href="https://mybrand.schroders.com/asset/360d3e58-5956-4497-bc8e-f8feaae2d20d/original/2025-US-Retirement-Survey-Retirement-Readiness.pdf" target="_blank" rel="noreferrer noopener">recent survey</a> by Schroders found more than 80 percent of workers with an employer-based retirement plan worry about outliving their savings, while more than half fear losing too much money if the stock market drops.</p>



<p class="wp-block-paragraph">Social Security also faces an uncertain future; the latest forecasts show its trust funds are likely to <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=newssearch&amp;cd=&amp;cad=rja&amp;uact=8&amp;ved=2ahUKEwjJwMDli7uQAxUyD0QIHSHJE4s4ChDF9AEoAHoECBIQAQ&amp;url=https%3A%2F%2Fwww.cnbc.com%2F2025%2F06%2F18%2Fsocial-security-administration-releases-new-trust-fund-depletion-dates.html" target="_blank" rel="noreferrer noopener">run out of money in less than a decade</a>, which would lead to future reductions in benefits unless Congress takes action.</p>



<p class="wp-block-paragraph">PERA, however, is on a clear path. With continued support from the State of Colorado, we expect to reach full funding by 2048, a goal that reflects both our responsibility to our members and our long-term planning discipline.&nbsp;</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Pensions and retirement security</h2>



<p class="wp-block-paragraph">The value of a defined benefit plan—also known as a pension—is in the name: it defines what your benefit will be. A PERA member can <a href="https://copera.org/how-your-pera-benefit-is-calculated/" target="_blank" rel="noreferrer noopener">calculate their retirement income</a> from the day they’re hired because they know the factors that determine it—age, salary, and length of service. There’s no guesswork about how much to save, how to invest it, or when to withdraw. And most importantly, that income is guaranteed for life, no matter what happens in the stock market.</p>



<p class="wp-block-paragraph">Retirement security is also economic security: When retirees spend their income—on groceries, housing, health care, and other goods and services—they’re supporting Colorado businesses and jobs.&nbsp;</p>



<p class="wp-block-paragraph">In 2023, PERA paid $4.56 billion to more than 114,000 retirees living in Colorado. <a href="https://content.copera.org/wp-content/uploads/2024/07/economic-and-fiscal-impacts-report-2024.pdf" target="_blank" rel="noreferrer noopener" class="broken_link">According to an analysis</a> by Boulder-based Pacey Nehls Economic Consulting, those benefit payments resulted in $7.1 billion in total economic output and supported 28,525 jobs. Retirees also paid nearly $382 million in local and state taxes on those benefits, helping support public services that make Colorado a great place to live.&nbsp;</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">How can I promote retirement security?</h2>



<p class="wp-block-paragraph">PERA’s Ambassador Program engages members in the retirement security conversation by sharing the value of PERA to all of Colorado. You can <a href="https://www.copera.org/about/legislation/ambassador-program" target="_blank" rel="noreferrer noopener">sign up for the Ambassador mailing list</a> to stay in the loop and be notified of any potential legislative changes that might affect PERA, as well as lend your voice to the conversation.</p>



<p class="wp-block-paragraph">We love to hear from PERA members and retirees who have dedicated their careers to serving Colorado. Browse <a href="https://www.copera.org/member-stories" target="_blank" rel="noreferrer noopener">member stories</a> and fill out our form to share your own PERA story with us.</p>



<p class="wp-block-paragraph">In addition, independent member and retiree groups like <a href="https://www.securepera.org/" target="_blank" rel="noreferrer noopener">Secure PERA</a> advocate for strengthening and protecting retirement security for Colorado’s public employees. The <a href="https://publicpensions.org/" target="_blank" rel="noreferrer noopener">National Public Pension Coalition</a> does the same on a national scale.</p>



<p class="wp-block-paragraph">Providing retirement security is what we at PERA have been doing for 94 years, and we plan to continue that work for many more generations to come. Colorado’s public employees deserve it.&nbsp;</p>



<p class="wp-block-paragraph"><strong>RELATED:</strong></p>



<ul class="wp-block-list">
<li><a href="https://www.copera.org/pera-on-the-issues/how-private-equity-helps-us-secure-public-employee-retirement">How Private Equity Helps Us Secure Public Employee Retirement</a></li>



<li><a href="https://www.copera.org/pera-on-the-issues/study-confirms-pera-a-valuable-tool-for-recruiting-retaining-public-workers">Study Confirms PERA a Valuable Tool for Recruiting, Retaining Public Workers</a></li>
</ul>


A man and a woman walk hand in hand through a field of tall grass and yellow-leaved aspens.

Providing Retirement Security for Colorado


<p class="wp-block-paragraph">At Colorado PERA, we invest for one purpose: To provide a secure and reliable retirement for the people who spend their careers serving our state. We do that by managing a diversified investment portfolio that includes everything from traditional stocks and bonds to investments in real estate and private equity.</p>



<p class="wp-block-paragraph">Private equity is often less well-understood by individual investors than other types of investments and is an important component of institutional portfolios. Here’s why we invest in this asset class and how it contributes to our members&#8217; hard-earned retirements.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">What is private equity?</h2>



<p class="wp-block-paragraph">Simply put, private equity generally refers to investments made in companies that aren’t traded on the public stock exchanges. Those investments can include:</p>



<ul class="wp-block-list">
<li>Venture capital: Providing money to young businesses like startups.</li>



<li>Growth capital: Investing in more mature businesses looking to grow or expand.</li>



<li>Buyouts: Purchasing a company or a portion of a company with the goal of growing its value.</li>
</ul>



<p class="wp-block-paragraph"></p>



<p class="wp-block-paragraph">We invest in private equity through carefully selected limited partnerships and funds that are managed by experienced professionals. Those funds cover a variety of business areas with high potential for growth, such as technology, energy, and health care.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Why PERA invests in private equity</h2>



<p class="wp-block-paragraph">The PERA Board of Trustees, which oversees PERA’s investments, believes a well-diversified portfolio is key to making sure we can deliver on our promises to members. Our investments in private equity are an important part of that strategy, despite being a relatively small portion of the portfolio. As of June, private equity amounted to 7.5% of the total PERA portfolio with a long-term target of 10%.</p>



<p class="wp-block-paragraph">We first started investing in private equity in the early 1980s, and those investments have paid off in the years since. In the past decade, for example, private equity has earned an annualized return of 11.5% compared to the total fund’s 8.6% return.</p>



<p class="wp-block-paragraph">That strong performance helps strengthen the trust funds and ensures we can continue paying benefits well into the future.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Private equity and transparency</h2>



<p class="wp-block-paragraph">Because private companies aren’t publicly listed, financial details on those companies aren’t always available to the public. State law also limits what we can disclose.</p>



<p class="wp-block-paragraph">Still, we are committed to being as open as possible. You can view <a href="https://content.copera.org/wp-content/uploads/2025/06/Private-Equity-Holdings-12.31.2024.pdf" target="_blank" rel="noreferrer noopener">a list of our private equity investments</a> on our website, including how much money we’ve committed and each fund’s internal rate of return. We also were an early supporter of the&nbsp;<a href="https://ilpa.org/" target="_blank" rel="noreferrer noopener">Institutional Limited Partner Association</a>&nbsp;(ILPA), which aims to improve reporting and transparency within the private equity field.</p>



<p class="wp-block-paragraph">Our team of investment professionals reports regularly to the Board of Trustees, which has a fiduciary duty to act in the best interests of members and retirees. That includes making sure our private equity investments meet our standards for risk-adjusted returns.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Want to learn more?</h2>



<p class="wp-block-paragraph">We produce our <a href="https://copera.org/investments/investment-stewardship" target="_blank" rel="noreferrer noopener"><em>Investment Stewardship Report</em></a> every year to provide more insight into how we manage investments on behalf of our more than 700,000 members and retirees. You can explore a digital interactive summary at <a href="https://copera.org/stewardship-snapshot" target="_blank" rel="noreferrer noopener" class="broken_link">copera.org/stewardship-snapshot</a>.</p>



<p class="wp-block-paragraph">Private equity may be a small portion of our investment portfolio but it’s an important part of the long-term strategy that helps secure our members&#8217; retirements. By investing wisely in both public and private markets, we’re making sure the trust funds remain strong not just for today’s members and retirees, but for generations to come.</p>



<p class="wp-block-paragraph">Learn more by watching our video, <a href="https://vimeo.com/1095939988">“Investing in Your Future: How PERA Grows Member Benefits.”</a></p>


An older man and woman walk together on a wooden bridge in a forested area, smiling and holding hands.

How Private Equity Helps Us Secure Public Employee Retirement


<p class="wp-block-paragraph">New research on career trends casts doubt on the common belief that younger workers today are hopping from job to job at higher rates than previous generations.</p>



<p class="wp-block-paragraph">The research from the National Institute on Retirement Security (NIRS) found that while there have been shifts in the labor market in recent decades, job tenure patterns have largely remained the same from one generation to the next.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">What the data says</h2>



<p class="wp-block-paragraph">In discussions about employment trends, it’s not uncommon to hear some variation of “young people aren’t sticking around anymore,” and data does show younger workers tend to switch jobs more than others. In their paper, <a href="https://www.nirsonline.org/reports/debunkingjobhopping/" target="_blank" rel="noreferrer noopener">“Debunking the Job-Hopping Myth: A Data-Driven Look at Tenure and Turnover Among Younger Workers,”</a> researchers from NIRS argue that not only has that long been the case, but things aren’t much different now than they used to be.</p>



<p class="wp-block-paragraph">In analyzing data from the U.S. Bureau of Labor Statistics, NIRS found that employees between the ages of 25 and 34 tended to stay with a given job for about three years in 1983. Fast forward to 2024 and that same age group had a median job tenure of 2.7 years—a difference of only a few months.</p>



<p class="wp-block-paragraph">The same is true for slightly older workers: the NIRS analysis found job tenure in the 35-44 age group has also remained consistent since the 1980s.</p>



<p class="wp-block-paragraph">However, NIRS found a surprising trend in the data—it turns out workers approaching retirement age aren’t staying in their jobs as long as they used to. Both the 45-54 and 55-64 age groups showed noticeable declines in career tenure since the 1980s.</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="547" src="https://content.copera.org/wp-content/uploads/2025/09/nirs-job-hopping-graph-1024x547.png" alt="A line graph showing median career tenure by age group from 1983 to 2024. The lines for the 25 to 34 and 35 to 44 age groups are relatively flat while the 45 to 54 and 55 to 64 age groups have seen a decline in tenure." class="wp-image-60382" srcset="https://content.copera.org/wp-content/uploads/2025/09/nirs-job-hopping-graph-1024x547.png 1024w, https://content.copera.org/wp-content/uploads/2025/09/nirs-job-hopping-graph-300x160.png 300w, https://content.copera.org/wp-content/uploads/2025/09/nirs-job-hopping-graph-768x410.png 768w, https://content.copera.org/wp-content/uploads/2025/09/nirs-job-hopping-graph-1536x821.png 1536w, https://content.copera.org/wp-content/uploads/2025/09/nirs-job-hopping-graph-2048x1094.png 2048w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Image credit: National Institute on Retirement Security</figcaption></figure>



<p class="wp-block-paragraph">The researchers argue the change in older groups could be for a number of reasons, including a decline in access to defined benefit (DB) pension plans in the private sector. Because pension benefits are based on a worker’s length of service, they provide a strong financial incentive to stay put compared to other types of retirement benefits.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Employee retention in the public sector</h2>



<p class="wp-block-paragraph">According to NIRS, 86 percent of public employees today have access to a DB plan at work compared to just 15 percent of private sector workers, and rates of quitting are much higher in the private sector. Retirement benefits are a big reason.</p>



<p class="wp-block-paragraph">In Colorado, as part of a recent study comparing the PERA DB Plan to other types of plans, researchers surveyed State of Colorado employees and a large majority said their retirement plan played an important role in their career decisions. Of those surveyed, 81% said retirement benefits were a factor in their decision to work for the State and 83% cited retirement benefits as a factor in their decision to remain in State employment.</p>



<p class="wp-block-paragraph"><strong>READ MORE:</strong> <a href="https://copera.org/pera-on-the-issues/study-confirms-pera-a-valuable-tool-for-recruiting-retaining-public-workers">Study Confirms PERA a Valuable Tool for Recruiting, Retaining Public Workers</a></p>



<p class="wp-block-paragraph">The research from NIRS makes it clear that the need for stable, secure retirement benefits is as strong today as it was decades ago. While some employment trends change over time, workers settling into their careers and planning for the future still value strong benefits that provide peace of mind.</p>


A group of professionals sitting around a table and writing.

Do Employees Change Jobs More Than They Used To?


<p class="wp-block-paragraph">A new independent study found Colorado PERA continues to be a valuable tool for recruiting and retaining public employees by providing cost-effective retirement benefits.</p>



<p class="wp-block-paragraph">As part of its regular review and oversight of PERA, the General Assembly approved the study with <a href="https://leg.colorado.gov/bills/hb24-1427" target="_blank" rel="noreferrer noopener" class="broken_link">House Bill 1427</a> and directed the Office of the State Auditor to enlist an actuarial firm experienced with public pension plans to conduct the analysis. The State last performed a study like this one a decade ago.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Methodology</h2>



<p class="wp-block-paragraph">The study, conducted by Cheiron, compared PERA’s Hybrid Defined Benefit (DB) Plan to various theoretical alternative plan designs, compared the DB Plan to the PERA Defined Contribution (DC) Plan, and included results from a survey of current and former state employees on the importance of retirement benefits in their employment decisions.</p>



<p class="wp-block-paragraph">The nine alternative plans included in the analysis incorporated a variety of benefit accrual and payment methods, from a combination of Social Security and a defined contribution plan like many employers in the private sector offer, to a cash balance plan in which a worker’s account balance is converted to an annuity at retirement.</p>



<p class="wp-block-paragraph">The study primarily looked at the costs associated with each plan and potential income replacement ratios—or the percentage of pre-retirement pay a person can expect to receive in retirement—for both short- and long-term public employees.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">PERA vs. other plans</h2>



<p class="wp-block-paragraph">While no single plan design offers the best possible benefits for every individual, the study found the PERA DB Plan provides higher income replacement than the alternatives for employees who spend the majority of their careers in public service.</p>



<p class="wp-block-paragraph">Some of the alternative plan designs and the PERA DC Plan can provide higher income replacement for non-career employees, according to the study, because of the “front-loaded” nature of accruing savings in a defined contribution plan. Contributions an employee makes early in their career have a lot of time to grow, which is more beneficial for workers who switch jobs throughout their careers. By contrast, a defined benefit pension is “back-loaded” since a worker’s benefit is based on their highest earnings, which are usually toward the end of their career. This can encourage late-career workers to remain in their jobs, which benefits employers by retaining experienced employees and reducing costly turnover.</p>


<div class="wp-block-image">
<figure class="alignright size-full is-resized"><a href="https://content.copera.org/wp-content/uploads/2025/08/db-vs-dc-accrual-graph.png"><img loading="lazy" decoding="async" src="https://content.copera.org/wp-content/uploads/2025/08/db-vs-dc-accrual-graph.png" alt="A line chart showing the different accrual patterns between defined benefit and defined contribution plans. The DB plan line slopes upward as years increase, while the DC plan line slopes downward." class="wp-image-59806" width="463" height="285" srcset="https://content.copera.org/wp-content/uploads/2025/08/db-vs-dc-accrual-graph.png 926w, https://content.copera.org/wp-content/uploads/2025/08/db-vs-dc-accrual-graph-300x184.png 300w, https://content.copera.org/wp-content/uploads/2025/08/db-vs-dc-accrual-graph-768x472.png 768w" sizes="auto, (max-width: 463px) 100vw, 463px" /></a><figcaption class="wp-element-caption">The &#8220;back-loaded&#8221; accrual of benefits in a traditional defined benefit plan compared to the &#8220;front-loaded&#8221; nature of defined contribution plans. In a DC plan, a worker&#8217;s early-career contributions have more time to grow, while in a DB plan the worker&#8217;s contributions later in their career have a larger effect on the benefit. Source: Cheiron.</figcaption></figure>
</div>


<p class="wp-block-paragraph">The study noted plans that tend to be more beneficial for non-career employees also come with trade-offs, such as higher costs and more risk placed on the employee. For example, plans that require the worker to manage their own retirement savings and investments also require that worker to manage the risks associated with overspending in retirement or outliving their savings.</p>



<p class="wp-block-paragraph">It&#8217;s also important to note that in the PERA DB Plan, income replacement ratios are predictable—a member can use their <a href="https://copera.org/highest-average-salary-tables/" target="_blank" rel="noreferrer noopener">highest average salary (HAS) table</a> to estimate their benefit well before they retire. In a DC plan, on the other hand, retirement income depends significantly on investment returns, which are much less predictable.</p>



<p class="wp-block-paragraph">The PERA DB Plan’s “hybrid” nature also carries features that make it attractive to members regardless of career tenure. Those include portability—members can take their contributions with them when they leave PERA employment—as well as compounding interest, an employer match, and a money purchase benefit calculation that can provide a higher benefit for some non-career employees.</p>



<p class="wp-block-paragraph">Because every employee has different financial goals, PERA offers a choice between DB and DC plans for some public employees, and the PERA DB Plan remains a valuable and desirable benefit for career employees.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">State employee survey results</h2>



<p class="wp-block-paragraph">An important part of any analysis of retirement benefits is the perspective of the workers receiving those benefits. For this study, Cheiron surveyed thousands of State employees who had <a href="https://copera.org/welcome-pera-members/new-members/new-members-with-the-option-to-choose-plans" target="_blank" rel="noreferrer noopener">the option to choose</a> between the PERA DB Plan and the PERA DC Plan.</p>



<p class="wp-block-paragraph">Of those surveyed, 81% said retirement benefits were a factor in their decision to work for the State of Colorado and 83% cited retirement benefits as a factor in their decision to remain in State employment.</p>



<p class="wp-block-paragraph">When it came to choosing which plan to enroll in, the PERA DB Plan was the clear choice with 77% of those who gave it a great deal of thought choosing DB over DC, according to the survey.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Conclusions</h2>



<p class="wp-block-paragraph">While career patterns shift over time, the report makes it clear that providing a secure lifetime retirement benefit continues to draw people to careers in public service. This study confirms that as Colorado’s public workforce evolves, PERA is well-positioned to meet the changing needs of its diverse membership and provide retirement security for generations to come.</p>



<p class="wp-block-paragraph">For more information, <a href="https://content.copera.org/wp-content/uploads/2025/07/PERA-hybrid-defined-benefit-plan-study-july-2025.pdf" target="_blank" rel="noreferrer noopener">read the full report</a>.</p>


A teacher sits at a table with a group of young students, helping a boy with his schoolwork as others write in their notebooks—dedicated to shaping futures.

Study Confirms PERA a Valuable Tool for Recruiting, Retaining Public Workers


<p class="wp-block-paragraph">A recent study by the National Conference on Public Employee Retirement Systems (NCPERS) found that public pensions like Colorado PERA generate local and state tax revenue that far exceed taxpayer contributions to those plans.</p>



<p class="wp-block-paragraph">The study, <a href="https://www.ncpers.org/public-pension-economic-impact-2025" target="_blank" rel="noreferrer noopener">“Unintended Consequences: How Scaling Back Public Pensions Puts Government Revenues at Risk,”</a> takes an in-depth look at the costs associated with public pensions, the economic activity they generate, and the implications of shifting workers to other types of retirement plans.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Background</h2>



<p class="wp-block-paragraph">Conversations around the value of public pension plans often focus on the cost of providing a lifetime retirement benefit. Several states have cited potential cost savings in closing or freezing their public pensions in the past, and those states have since <a href="https://www.plansponsor.com/states-lacking-db-plans-face-a-challenge-retaining-workers/" target="_blank" rel="noreferrer noopener">faced challenges recruiting and retaining public employees</a>.</p>



<p class="wp-block-paragraph">The study authors argue that while public pensions can seem like a financial liability when viewed up close, a more comprehensive analysis of their financial impact shows they are in fact significant drivers of economic activity that more than make up for their cost.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">How pensions drive economic activity</h2>



<p class="wp-block-paragraph">The NCPERS study highlights two primary ways pensions drive economic activity:</p>



<ul class="wp-block-list">
<li><strong>Investments:</strong> Public pensions invest their funds in businesses and the financial markets, which in turn create jobs and stimulate economic growth. For every $1,000 invested by a pension fund, NCPERS estimates the economy grows by approximately $2,360. In total, pension investments added an estimated $1.9 trillion to state economies in 2023 and generated approximately $453 billion in state and local tax revenue, according to NCPERS.</li>



<li><strong>Retiree spending: </strong>Retirees spend their retirement income on goods and services, and businesses and their employees then turn around and spend that money as well, keeping it circulating and growing throughout the community. NCPERS calculates that retiree spending contributed $980.7 billion to the U.S. economy and generated approximately $208.9 billion in state and local tax revenue in 2023.</li>
</ul>



<p class="wp-block-paragraph"></p>



<p class="wp-block-paragraph">Combining the effects of both investments and retiree spending, NCPERS estimates that every dollar taxpayers contribute to public pensions generates $13.41 in economic activity. That means $216.7 billion in taxpayer contributions to pension plans nationwide in 2023 created $661.9 billion in tax revenue and $2.9 trillion in total economic impact, according to NCPERS.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">The impact of public pensions in Colorado</h2>



<p class="wp-block-paragraph">Here in Colorado, NCPERS estimates pension assets (including Colorado PERA and others) totaled approximately $70.3 billion in 2023 with about $7 billion in benefit payments throughout the year. Those investments and benefit payments resulted in approximately $25.8 billion in total economic output and generated more than $4.6 billion in state and local tax revenue. NCPERS estimates Colorado&#8217;s total net revenue gain from public pensions at $1.78 billion.</p>



<p class="wp-block-paragraph">As the state&#8217;s largest public retirement plan, PERA alone has a significant impact. In 2023, PERA paid $4.56 billion in benefits to 114,432 retirees living in Colorado, resulting in $7.1 billion of the state’s total economic output. Those PERA retirees paid nearly $382 million in state and local taxes on their benefits, supporting schools, roads, and other vital services.</p>



<p class="wp-block-paragraph"><strong>READ MORE:</strong> <a href="https://copera.org/pera-on-the-issues/measuring-the-impact-of-4-5b-in-annual-retirement-benefits-in-colorado" target="_blank" rel="noreferrer noopener">Measuring the Impact of $4.5B+ in Annual Retirement Benefits in Colorado</a></p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Who benefits from pensions?</h2>



<p class="wp-block-paragraph">As the NCPERS study concludes, reducing benefits or closing pension plans may yield short-term savings, but those actions carry unintended consequences: less money for state and local governments, higher turnover in the public sector, and a less secure retirement for state workers in the long run.</p>



<p class="wp-block-paragraph">&#8220;If there were no public pensions, taxpayers would have to pay more to receive the same level of services,” the NCPERS study authors stated. “Dismantling public pensions would not reduce costs; it would impose new ones.”</p>



<p class="wp-block-paragraph">At Colorado PERA, we not only provide retirement security to 1 in 10 Coloradans, but contribute to the economic wellbeing of the whole state. Policymakers and stakeholders should view pensions as vital economic engines that benefit everyone by contributing to prosperity at the local, state and federal levels.</p>


A man and woman sit at a table with a laptop, phone, and paperwork, looking at each other and smiling in a bright, modern home.

Study: Public Pensions Provide Economic Benefits for All


<p class="wp-block-paragraph">PERA’s executive leadership team hosted two Town Halls on Tuesday, July 1 to provide updates on PERA and take questions from members and retirees.</p>



<p class="wp-block-paragraph">CEO/Executive Director Andrew Roth was joined by Chief Investment Officer/Chief Operating Officer Amy C. McGarrity, Chief Benefits Officer Patrick Lane, and Chief Administrative Officer Jeremy Hill.</p>



<p class="wp-block-paragraph">Below are clips of some of the executives’ answers to participant questions.</p>



<p class="wp-block-paragraph">Full recordings of each Town Hall are available at <a href="https://copera.org/townhall" target="_blank" rel="noreferrer noopener" class="broken_link">copera.org/townhall</a>.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">How did PERA’s investment portfolio perform in 2024?</h2>



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<p class="wp-block-paragraph">McGarrity highlighted PERA’s financial results from 2024, as reported in the recently released 2023&nbsp;<em>Annual Comprehensive Financial Report</em> (ACFR).</p>



<p class="wp-block-paragraph">“For the year ended December 31, 2024, PERA’s investment portfolio earned a return of 10.8% net-of-fees,” McGarrity said. “The value of the total defined benefit fund was $66.7 billion and our funded status was 69.2%.”</p>



<p class="wp-block-paragraph">Based on 2024’s financial results, PERA remains on track to meet its funding goals. That means there will be no adjustments to contribution rates and all eligible benefit recipients will receive a 1.0% increase this July and most, if not all, will receive 1.0% in July 2026.</p>



<p class="wp-block-paragraph">View more highlights from the 2024 <em>ACFR</em> at <a href="https://copera.org/snapshot" target="_blank" rel="noreferrer noopener" class="broken_link">copera.org/snapshot</a>.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">If PERA’s investments earned positive returns in 2024, why aren’t retirees getting a bigger Annual Increase?</h2>



<div class="wp-block-advgb-video advgb-video-block full-width" data-video="https://content.copera.org/wp-content/uploads/2025/07/2025-TH-annual-increase.mp4" data-source="local" data-video-attr="controls,playsinline" data-video-preload="metadata"><div class="advgb-video-wrapper full-width no-lightbox"><video class="full-width" height="450" poster="https://content.copera.org/wp-content/uploads/2025/07/andrew-annual-increase.png" controls preload="metadata" playsinline><source src="https://content.copera.org/wp-content/uploads/2025/07/2025-TH-annual-increase.mp4"/>Your browser does not support HTML5 video.</video></div></div>



<p class="wp-block-paragraph">Roth acknowledged that the <a href="https://copera.org/retirees/benefit-basics-for-retirees/annual-benefit-increases" target="_blank" rel="noreferrer noopener">1% Annual Increase</a> retirees have received in recent years has been a challenge and reiterated that while PERA has unfunded liabilities, the Annual Increase is limited under state law to keep the plan on track to full funding.</p>



<p class="wp-block-paragraph">“The good news is because we’re having strong investment returns, there is no decrease to the Annual Increase,” Roth said.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">What will happen to my PERA benefits if there’s a recession?</h2>



<div class="wp-block-advgb-video advgb-video-block full-width" data-video="https://content.copera.org/wp-content/uploads/2025/07/2025-TH-recession.mp4" data-source="local" data-video-attr="controls,playsinline" data-video-preload="metadata"><div class="advgb-video-wrapper full-width no-lightbox"><video class="full-width" height="450" poster="https://content.copera.org/wp-content/uploads/2025/07/amy-recession-2.jpg" controls preload="metadata" playsinline><source src="https://content.copera.org/wp-content/uploads/2025/07/2025-TH-recession.mp4"/>Your browser does not support HTML5 video.</video></div></div>



<p class="wp-block-paragraph">“First and foremost, nothing happens to the benefits that are being paid,” McGarrity said, affirming that PERA would continue to pay earned benefits if there were a downturn in the economy.</p>



<p class="wp-block-paragraph">As far as PERA’s portfolio is concerned, McGarrity said that because PERA is invested in the markets, it would likely experience the effects of a recession. However, the Board’s focus is on achieving returns <a href="https://copera.org/pera-on-the-issues/how-colorado-pera-invests-for-long-term-retirement-security" target="_blank" rel="noreferrer noopener">over the course of decades</a>, regardless of what happens in any one year.</p>



<p class="wp-block-paragraph">“That’s really why the Board underscores a strategic approach and remains invested in the asset classes across the markets through various environments in order to achieve our very long-term objectives,” she said.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Does the repeal of the Windfall Elimination Provision and Government Pension Offset through the Social Security Fairness Act mean PERA members have to start contributing to Social Security?</h2>



<div class="wp-block-advgb-video advgb-video-block full-width" data-video="https://content.copera.org/wp-content/uploads/2025/07/2025-TH-social-security.mp4" data-source="local" data-video-attr="controls,playsinline" data-video-preload="metadata"><div class="advgb-video-wrapper full-width no-lightbox"><video class="full-width" height="450" poster="https://content.copera.org/wp-content/uploads/2025/07/andrew-social-security.jpg" controls preload="metadata" playsinline><source src="https://content.copera.org/wp-content/uploads/2025/07/2025-TH-social-security.mp4"/>Your browser does not support HTML5 video.</video></div></div>



<p class="wp-block-paragraph">“The short answer is no changes that resulted from the Social Security Fairness Act will impact PERA members with regard to their contributions,” Roth said, adding that PERA serves as a <a href="https://copera.org/retirees/benefit-basics-for-retirees/pera-and-social-security" target="_blank" rel="noreferrer noopener">substitute for Social Security</a> for most members, and a person’s PERA benefit is never affected by any other benefit they may receive.</p>



<p class="wp-block-paragraph">PERA members who were previously affected by WEP or GPO will no longer see reductions in their Social Security benefits since those two provisions have been repealed.</p>



<p class="wp-block-paragraph">For more information on the Social Security Fairness Act, visit <a href="https://www.ssa.gov/benefits/retirement/social-security-fairness-act.html?tl=2%2C6%2C10" target="_blank" rel="noreferrer noopener">ssa.gov</a>.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">What can retirees expect for PERACare plans in 2026?</h2>



<div class="wp-block-advgb-video advgb-video-block full-width" data-video="https://content.copera.org/wp-content/uploads/2025/07/2025-TH-peracare.mp4" data-source="local" data-video-attr="controls,playsinline" data-video-preload="metadata"><div class="advgb-video-wrapper full-width no-lightbox"><video class="full-width" height="450" poster="https://content.copera.org/wp-content/uploads/2025/07/patrick-peracare-2.png" controls preload="metadata" playsinline><source src="https://content.copera.org/wp-content/uploads/2025/07/2025-TH-peracare.mp4"/>Your browser does not support HTML5 video.</video></div></div>



<p class="wp-block-paragraph">“We will continue to offer the same plans and carriers for our Medicare and pre-Medicare offerings in the 2026 plan year,” Lane said. “We’re still in the process of finalizing premium information, but we do expect premiums to go up across the board next year, so I want to be very transparent about that.”</p>



<p class="wp-block-paragraph">Lane added that while PERA does its best to negotiate competitive rates with PERACare carriers, there are many factors that affect premiums and other health plan costs, such as rising costs for services and prescription drugs and regulatory changes at the federal level.</p>



<p class="wp-block-paragraph">We’ll have more information on 2026 PERACare premiums in the fall.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">How do I know when I can retire and how much my monthly benefit will be?</h2>



<div class="wp-block-advgb-video advgb-video-block full-width" data-video="https://content.copera.org/wp-content/uploads/2025/07/2025-TH-when-can-i-retire.mp4" data-source="local" data-video-attr="controls,playsinline" data-video-preload="metadata"><div class="advgb-video-wrapper full-width no-lightbox"><video class="full-width" height="450" poster="https://content.copera.org/wp-content/uploads/2025/07/patrick-retirement.jpg" controls preload="metadata" playsinline><source src="https://content.copera.org/wp-content/uploads/2025/07/2025-TH-when-can-i-retire.mp4"/>Your browser does not support HTML5 video.</video></div></div>



<p class="wp-block-paragraph">“The <a href="https://copera.org/app" target="_blank" rel="noreferrer noopener">PERA mobile app</a> is a really valuable tool to help you through this process,” Lane said. “It has calculators, it can help you determine your dates for eligibility to receive benefits, and it can help you go through some hypothetical scenarios that would help you gain a better understanding of your retirement.”</p>



<p class="wp-block-paragraph">Lane also pointed out other tools and resources that are available on PERA’s website, including <a href="https://www.copera.org/welcome-pera-members/benefit-basics/highest-average-salary-tables" target="_blank" rel="noreferrer noopener">highest average salary tables</a>, <a href="https://content.copera.org/webinars/" target="_blank" rel="noreferrer noopener">webinars</a>, and <a href="https://www.copera.org/forms-resources/video-library" target="_blank" rel="noreferrer noopener" class="broken_link">educational videos</a>.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Town Hall recordings</h2>



<p class="wp-block-paragraph">For full recordings of both Town Halls, visit&nbsp;<a href="https://copera.org/about/pera-town-hall" target="_blank" rel="noreferrer noopener">copera.org/townhall</a>.</p>


PERA's executive leadership team: Chief Administrative Officer Jeremy Hill, CEO/Executive Director Andrew Roth, Chief Investment Officer/Chief Operating Officer Amy C. McGarrity, and Chief Benefits Officer Patrick Lane.

PERA Executives Give Updates, Take Questions at 2025 Town Halls


<p class="wp-block-paragraph">The Mile High City recently hosted a conference with hundreds of public pension professionals from around the United States, including Colorado PERA.</p>



<p class="wp-block-paragraph">The <a href="https://www.ncpers.org/" target="_blank" rel="noreferrer noopener">National Conference on Public Employee Retirement Systems</a> (NCPERS) held its Annual Conference and Exhibition in Denver May 18 to 21.</p>



<p class="wp-block-paragraph">The four-day conference featured educational sessions, panel discussions, and workshops on topics such as plan governance, fiduciary best practices, investment strategies, artificial intelligence, and much more.</p>



<p class="wp-block-paragraph">Several members of PERA’s executive team and members of the Board of Trustees participated in the conference. Colorado State Treasurer Dave Young, a member of the PERA Board of Trustees, delivered the conference’s welcome address and PERA CEO/Executive Director Andrew Roth moderated a panel of investment professionals discussing the economic outlook. Chief Investment Officer/Chief Operating Officer Amy C. McGarrity and Trustee Scott Simon—who is also the Chief Investment Officer for the Fire &amp; Police Pension Association of Colorado—participated in a panel discussion with other public pension CIOs.</p>



<p class="wp-block-paragraph">PERA staff, executives, and Trustees have long been involved with industry groups like NCPERS to lend our expertise and learn from peer organizations.</p>



<p class="wp-block-paragraph">“Conferences like the NCPERS Annual Conference and Exhibition provide us with a valuable opportunity to share ideas with other public pension plans, exchange best practices, and work together to improve the retirement security of the nation’s public workforce,” Roth said. “We were honored to have this year’s participants in Denver and show them all our beautiful city has to offer.”</p>


Four people in business attire are seated on a stage panel at the PERA Conference; one man speaks into a microphone while the others listen.

Denver Hosts National Conference for Public Pension Professionals


<p class="wp-block-paragraph">May 4 to 10 is Public Service Recognition Week, and we want to celebrate by honoring the impact PERA members have on the State of Colorado.</p>



<p class="wp-block-paragraph">PERA provides retirement and other benefits to more than 700,000 current and former public employees—teachers, snow plow drivers, state troopers, local government employees, and others who provide vital services to our state.</p>



<p class="wp-block-paragraph">We recently had the honor of attending the <a href="https://cccs.edu/" target="_blank" rel="noreferrer noopener">Colorado Community College System’s</a> Commitment to Excellence Awards ceremony in Denver where we witnessed outstanding public service in action. The awards celebrate exceptional faculty and staff at community colleges across the state.</p>



<p class="wp-block-paragraph">From Otero College in La Junta to Arapahoe Community College in the Denver area, these PERA members go above and beyond to serve the thousands of Colorado students who enroll at a community college every year.</p>



<p class="wp-block-paragraph"><strong>Sandra Butler, Arapahoe Community College</strong></p>



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<p class="wp-block-paragraph"><strong>Joe Schreiner, Community College of Denver</strong></p>



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<p class="wp-block-paragraph"><strong>Cynthia Piper, Northeastern Junior College</strong></p>



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<p class="wp-block-paragraph"><strong>Matthew Sanchez, Red Rocks Community College</strong></p>



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<p class="wp-block-paragraph"><strong>Amy Buckingham, Red Rocks Community College</strong></p>



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<p class="wp-block-paragraph">Thank you to these and all public employees who make a lasting impact on their communities and the State of Colorado every day.</p>


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Honoring PERA Members Who are Making a Difference


<p class="wp-block-paragraph">If you pay attention to what’s happening on Wall Street, you know 2025 is off to a bumpy start in the global financial markets.</p>



<p class="wp-block-paragraph">Concerns over tariffs and a potential trade war, coupled with investor anxiety about inflation and a possible recession, have led to significant swings in major indexes like the S&amp;P 500.</p>



<p class="wp-block-paragraph">While uncertainty and volatility can be disconcerting, the PERA Board and staff take a very careful, thoughtful approach to investing that balances risks and potential returns.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">What does volatility mean for Colorado PERA?</h2>



<p class="wp-block-paragraph">For institutional investors like Colorado PERA, ups and downs in the markets are expected. Rather than try to make decisions based on what happens day-to-day, PERA’s approach involves staying the course during times of volatility.</p>



<p class="wp-block-paragraph">The PERA Board of Trustees has taken considerable care to develop an <a href="https://content.copera.org/wp-content/uploads/2024/07/statement-of-investment-policy.pdf" target="_blank" rel="noreferrer noopener">investment policy</a> and <a href="https://copera.org/asset-allocation" target="_blank" rel="noreferrer noopener">strategic asset allocation</a> that focus on diversification and long-term performance to ensure the sustainability of the fund and meet pension obligations for our current and future retirees.</p>



<p class="wp-block-paragraph">This disciplined approach means PERA remains secure and retirees can count on receiving monthly benefits they cannot outlive.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Maintaining a strategic portfolio</h2>



<p class="wp-block-paragraph">PERA’s investment staff, led by Chief Investment Officer/Chief Operating Officer Amy C. McGarrity, manages more than $61 billion in assets for the Defined Benefit Plan. The portfolio includes a diverse mix of assets across a broad range of public and private markets, including public equities, fixed income, commercial real estate, private equity, and alternative assets. This diversification helps limit the potential negative impact of any one type of investment experiencing losses.</p>



<p class="wp-block-paragraph">“Strategic asset allocation is the single largest driver of investment returns, and our portfolio includes a wide variety of assets meant to perform over multiple decades,” McGarrity said. “We believe in remaining invested in the markets so we can continue to generate returns for our members and benefit recipients for many years to come.”</p>



<p class="wp-block-paragraph">The portfolio also undergoes regular review. Every four or five years, the Board conducts what is known as an asset/liability study to examine the portfolio and ensure the asset allocation aligns with PERA’s funding goals. The most recent study, completed in 2024, led the Board to adopt new asset allocation targets that reduced the amount allocated to Global Equity and increased the amount allocated to Private Equity and Real Estate.</p>



<p class="wp-block-paragraph">The updated strategic asset allocation is expected to provide incrementally greater diversification in the portfolio with the goal to slightly lower risk and add potential for higher returns over time.</p>



<p class="wp-block-paragraph"><strong>READ MORE:</strong> <a href="https://copera.org/pera-on-the-issues/pera-board-adopts-new-strategic-asset-allocation-following-study" target="_blank" rel="noreferrer noopener">PERA Board Adopts New Strategic Asset Allocation Following Study</a></p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Focusing on long-term performance</h2>



<p class="wp-block-paragraph">PERA’s assumed rate of return—one of the key numbers we use to forecast how much money the fund will have on hand to pay benefits in the future—is 7.25 percent. While the actual return in a given year may be higher or lower than 7.25 percent, the goal is to meet the assumed rate of return over a period of 30 or more years. Our annualized return over the past 30 years is 8.3 percent, gross of fees.</p>



<p class="wp-block-paragraph">By maintaining a well-diversified portfolio and focusing on long-term returns, we’re making sure the trust funds that provide retirement and other benefits to Colorado’s public workforce are well-positioned to weather market volatility.</p>


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