Lawmakers in Colorado are moving forward with two PERA-related bill drafts following a summer of legislative activity in interim committees.

PERA leaders and staff have been meeting with legislators throughout the summer to provide updates, answer questions, and provide feedback during this annual period of PERA review and oversight.

Drafts of PERA-related bills

The Pension Review Commission, which is responsible for recommending legislation pertaining to PERA and the Fire and Police Pension Association of Colorado, met on Friday, September 27 to finalize two bill drafts related to PERA.

The first, known as Bill A, is similar to a bill from last session that would provide a temporary tax credit for PERA retirees to reduce the impact of inflation. The $700 credit would apply to retirees who are at least 65 years old and have adjusted gross income of no more than $38,000 for single filers or $76,000 for joint filers.

The second draft, Bill B, pertains to PERA studies and reporting. The bill aims to lay out in statute some of the work the PERA Board already does on a regular basis, such as periodic actuarial audits and actuarial experience studies. The bill also would modify the cadence of those reports.

The Commission had been considering a bill to tie to inflation the State’s annual $225 million direct distribution to PERA, based on a recommendation from the Pension Review Subcommittee. Lawmakers decided not to move forward with that bill as one of their official interim committee-recommended pieces of legislation because of its added cost amid a projected shortfall in the state budget. Lawmakers may still decide individually to move forward with any particular bills during the legislative session.

Pension Review Subcommittee recommendations

Throughout the summer, PERA also engaged with the Pension Review Subcommittee, which consists of a mix of legislators and members of the public and reports up to the Pension Review Commission. In addition to making recommendations to the Pension Review Commission, the Subcommittee also makes recommendations to the PERA Board and writes an annual letter to the residents of Colorado on PERA’s financial health.

In the course of its work, the Pension Review Subcommittee came up with three recommendations for the PERA Board:

1. Provide more detail on the benchmarks PERA uses to measure performance of the various asset classes in the PERA Defined Benefit Plan portfolio.
2. Improve transparency around PERA Board meetings by making meeting recordings and materials more easily accessible online.
3. Study the impact of allowing non-vested PERA members who refund their account to receive their balance plus investment returns instead of the current Board-established 3% compounding interest.

The PERA Board discussed the recommendations at its September Planning Session and agreed to consider all three. Investment staff provided the Subcommittee with the information requested on benchmarks, the Board agreed to archive meeting recordings and public materials online starting in November; meetings are currently streamed live and available upon request. The Board also agreed staff will study the cost of providing market returns when a member refunds their account.

What’s next?

All bill drafts from interim committees go to the Legislative Council Committee for consideration. If approved, lawmakers can then introduce those bills in the next legislative session, which begins on January 8, 2025.

The PERA Board’s next regularly scheduled meeting is set for November 15.