Retirement insights from a Colorado PERA perspective

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

It’s been an unusual year, to say the least. COVID-19 altered everything. The well-being of so many across the state, country, and world was at the forefront of everyone’s thoughts. But readers of PERA On The Issues were also interested in how the global pandemic affected PERA. The top stories of 2020 were primarily about the ways in which PERA and the state legislature adapted to these new circumstances.



<h4 class="wp-block-heading"><a href="https://content.copera.org/polis-budget-plan-includes-pera-direct-distribution/" target="_blank" rel="noreferrer noopener">Amid Massive Budget Cuts, Joint Budget Committee Votes to Suspend Direct Distribution</a></h4>



In 2018, the state legislature instituted an annual payment from the state budget to PERA, called a direct distribution. This $225 million payment was an important piece of SB 18-200 and goes toward paying down PERA’s unfunded liability. However, by the end of March the economy was in rough shape. It was clear that budget writers would face a shortfall amounting to billions of dollars. As a result, the legislature paused the direct distribution for 2020 — part of a long list of emergency cuts throughout the state’s budget.



<h4 class="wp-block-heading"><a href="https://peraontheissues.com/polis-budget-plan-includes-pera-direct-distribution/" target="_blank" rel="noreferrer noopener">Polis Budget Plan Includes PERA Direct Distribution</a></h4>



Months after the legislature paused the direct distribution, Governor Polis released his budget proposal for 2021. In it, he indicated one of his priorities was to restore the direct distributions in full. The governor does not write the budget — that responsibility falls to the state legislature’s Joint Budget Committee. But his budget proposal helps set the tone as this process gets underway. Typically, the state legislature passes a budget in late March or early April before sending it to the governor for a signature.



<h4 class="wp-block-heading"><a href="https://peraontheissues.com/pera-related-legislation-sent-to-governor/" target="_blank" rel="noreferrer noopener">PERA-related Legislation Sent to Governor</a></h4>



The direct distribution was not the only PERA-related measure the legislature passed in 2020. Other bills included: 



<ul><li>A temporary change to the contributions judges make to PERA</li><li>Reclassifying state firefighters as safety officers</li><li>An expansion of working-after-retirement exemptions for certain employees hired by a board of cooperative services (BOCES).</li></ul>



<h4 class="wp-block-heading"><a href="https://peraontheissues.com/peras-chief-investment-officer-addresses-market-drop/" target="_blank" rel="noreferrer noopener">PERA’s Chief Investment Officer Addresses Market Drop</a></h4>



Those who follow the stock market can sum up 2020 with one word: volatility. The end of March saw a sharp sell-off as stock prices plunged. The uptick that followed was nearly as swift as the initial drop. In the midst of this uncertainty, PERA&#8217;s Chief Investment Officer, Amy C. McGarrity, penned a letter addressing PERA’s strategy.



<h4 class="wp-block-heading"><a href="https://peraontheissues.com/change-is-coming-to-pera-on-the-issues/" target="_blank" rel="noreferrer noopener">Change is Coming to PERA On The Issues</a></h4>



After nearly eight years in publication, PERA On The Issues received a makeover. The new site design contains updates to improve the reader experience. For example, stories now look better on mobile devices, which is important as nearly half all people read PERA On The Issues on their phones. Although the site looks a bit different, the types of stories this site covers remains the same.



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As 2020 comes to a close, we’re thankful to all our readers for continuing to rely on PERA On The Issues. In an environment awash with options, this website’s readership continues to grow. We’ll continue following and unpacking the issues that matter to PERA’s many stakeholders like we’ve done for years. We’ll see you in 2021.

Year in Review: Top Stories of 2020

A summary of proposed legislation affecting Colorado PERA. Check back often for new bills and updated status reports. Last updated: July 14, 2020.



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<a href="https://leg.colorado.gov/bills/hb20-1379" target="_blank" rel="noreferrer noopener">HB 20-1379</a>



Suspend Direct Distribution To PERA Public Employees Retirement Association For 2020-21 Fiscal Year



Concerning suspending the direct distribution to the public employees&#8217; retirement association for the 2020-21 state fiscal year, and, in connection therewith, reducing an appropriation.



Bill summary: Current law provides for an annual direct distribution, currently set at $225 million, to PERA until fully funded status is attained. 



The bill would suspend that direct distribution for the 2020-21 fiscal year.



Sponsors: <a rel="noreferrer noopener" href="https://leg.colorado.gov/legislators/kim-ransom" target="_blank">Rep. Kim Ransom</a> (R-Douglas County) | <a rel="noreferrer noopener" href="https://leg.colorado.gov/legislators/bob-rankin" target="_blank">Sen. Bob Rankin</a> (R-Carbondale)



Bill Status: Passed by the House and Senate. Sent to the Governor for signature on 6/6. Signed by Governor on 6/29.



Bill History: Bill introduced 5/26, assigned to <a rel="noreferrer noopener" href="https://leg.colorado.gov/committees/appropriations/2020-regular-session-0" target="_blank">House Appropriations </a>committee. House Appropriations referred the bill, unamended, to House Committee of the Whole on 5/27. Bill passed Second Reading unamended on 6/1. Bill passed House on Third Reading on 6/3: Aye-48, No-14, Other-3. 



Bill introduced in Senate on 6/3. Senate Appropriations referred unamended to Senate on 6/4. Bill passed Second Reading unamended on 6/5. Bill passed Senate on Third Reading on 6/6: Aye-28, No-5, Other-2.



Board position: The PERA Board, as fiduciaries and pursuant to their funding policy, opposes reductions in contributions to PERA while PERA has unfunded liabilities.



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<a rel="noreferrer noopener" href="https://leg.colorado.gov/bills/hb20-1394" target="_blank">HB 20-1394</a>



Public Employees&#8217; Retirement Association Judicial Division Contribution Rate Modification



Concerning a modification to the contribution rates to the public employees&#8217; retirement association for the judicial division of the association for certain fiscal years, and, in connection therewith, reducing an appropriation.



Bill summary: The bill addresses contribution rates for employers and employees in the judicial division, which is made up of judges. 



The bill would decrease the employer contribution rate by five percent for the 2020-21 and 2021-22 state fiscal years. For those same fiscal years, the employee contribution rate would rise by five percent.



The changes do not apply for employer or member contributions for judges employed by the Denver county court. The bill does not change contribution rates for any other division of PERA



Sponsors: <a rel="noreferrer noopener" href="https://leg.colorado.gov/legislators/julie-mccluskie" target="_blank">Rep. Julie McCluskie</a> (D-Dillon) | <a rel="noreferrer noopener" href="https://leg.colorado.gov/legislators/kim-ransom" target="_blank">Rep. Kim Ransom</a> (R-Douglas County) | <a rel="noreferrer noopener" href="https://leg.colorado.gov/legislators/dominick-moreno" target="_blank">Sen. Dominick Moreno</a> (D-Commerce City) | <a href="https://leg.colorado.gov/legislators/bob-rankin" target="_blank" rel="noreferrer noopener">Sen. Bob Rankin</a> (R-Carbondale)



Bill Status: Passed by the House and Senate. Sent to the Governor for signature on 6/5. Signed by Governor on 6/29.



Bill History: Bill introduced 5/26, assigned to House Appropriations . House Appropriations referred the bill, with amendments, to House on 5/27. House Second Reading passed with amendments (committee) on 6/1. Bill passed House on Third Reading on 6/3: Aye-64, No-0, Other-1. 



Bill introduced in Senate on 6/3. Senate Appropriations referred unamended to Senate on 6/4. Bill passed Second Reading unamended on 6/4 Bill passed Senate on Third Reading on 6/5: Aye-33, No-0, Other-2.



Board position: The PERA Board, as fiduciaries and pursuant to their funding policy, opposes reductions in contributions to PERA while PERA has unfunded liabilities.



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<a rel="noreferrer noopener" aria-label="SB 20-057 (opens in a new tab)" href="https://leg.colorado.gov/bills/sb20-057" target="_blank">SB 20-057</a>



Fire Prevention &amp; Control Employee Benefits



Concerning the inclusion of firefighters employed by the Department of Public Safety in the Division of Fire Prevention and Control in certain employee benefits.



Bill summary: Currently, wildfire firefighters employed by the state contribute to PERA and receive benefits as determined by standard PERA Tables. This bill would reclassify these firefighters as &#8220;safety officers,&#8221; which would adjust their contribution rates and benefits to those found on PERA&#8217;s Safety Officer Tables, formerly known as Trooper Tables.



This move would result in a higher contribution rate for both employees and employers and would allow firefighters to qualify for full-service retirement at a younger age than other PERA members. These changes would apply only to service credit earned after the bill goes into effect. 



The bill also addresses other benefits available to firefighters.



Sponsors: <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://leg.colorado.gov/legislators/pete-lee" target="_blank">Sen. Pete Lee</a> (D-Colorado Springs) | <a rel="noreferrer noopener" aria-label="Rep. Marc Snyder (opens in a new tab)" href="https://leg.colorado.gov/legislators/marc-snyder" target="_blank">Rep. Marc Snyder</a> (D-Manitou Springs) and <a rel="noreferrer noopener" aria-label="Rep. Lisa Cutter (opens in a new tab)" href="https://leg.colorado.gov/legislators/lisa-cutter" target="_blank">Rep. Lisa Cutter</a> (D-Littleton) 



Bill Status: Passed House and Senate. Sent to Governor for signature on 6/9. Signed by Governor on 6/29.



Bill History: Bill introduced 1/8. Senate Finance approved the bill on 1/28. Senate Appropriations passed with amendments on 3/6. Passed third reading on 3/11: Aye-32, No-3, Other-0. 



Introduced in House on 3/11. House Finance referred unamended to Appropriations on 5/28. House Appropriations referred unamended to House on 6/3. Passed House second reading on 6/8. Passed third reading on 6/9: Aye-53, No-9, Other-3.



PERA Board position: The PERA Board of Trustees considered this bill on their January 17 meeting and decided to not take a position.



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<a href="http://leg.colorado.gov/bills/HB20-1127" target="_blank" rel="noreferrer noopener" aria-label="HB 20-1127 (opens in a new tab)">HB 20-1127</a>



Extend Public Employees&#8217; Retirement Association Retiree Work After Retirement Limit



Concerning an extension of the employment-after-retirement limitations for retirees of the public employees&#8217; retirement association employed by a board of cooperative services after retirement. 



Bill summary: Boards of cooperative services (BOCES) provide special education services to the school districts they serve. Almost all of these school districts are in rural parts of the state, and it is difficult for BOCES to find qualified people to serve as special service providers in these areas. 



BOCES could address this issue by hiring PERA retirees to fill these roles, but PERA&#8217;s working-after-retirement provisions, including the limitation on the number of days in a calendar year that a service retiree may work for a PERA employer without a reduction in benefits, could be a barrier for some retirees.



The bill modifies the current PERA working-after-retirement provisions for certain retirees hired by a BOCES if:



<ul><li>The BOCES hires a retiree to provide services in two or more rural school districts;</li><li>The BOCES hires the service retiree to provide special services to students; and</li><li>The BOCES determines that there is a critical shortage of special service providers and that the retiree has specific experience, skills, or qualifications that would benefit the districts that the BOCES serves.</li></ul>



Under the bill, a PERA retiree who is a special service provider and who is hired by a BOCES may receive salary without a reduction in benefits for any length of employment in a calendar year.



The bill requires a BOCES that hires a PERA retiree to provide full payment of all PERA employer contributions, disbursements, and working retiree contributions. In addition, the BOCES is required to pay an additional amount equal to two percent of the retiree&#8217;s salary to PERA.



A PERA retiree may not work under these modified rules for more than five consecutive years. All BOCES combined may hire no more than 40 people over five years.



PERA is required to submit a report to the general assembly regarding specified aspects of the extension of PERA&#8217;s working-after-retirement limitations.



Sponsors: <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="http://leg.colorado.gov/legislators/julie-mccluskie" target="_blank">Rep. Julie McCluskie</a> (D-Dillon) | <a rel="noreferrer noopener" aria-label="Rep. Barbara McLachlan (opens in a new tab)" href="http://leg.colorado.gov/legislators/barbara-mclachlan" target="_blank">Rep. Barbara McLachlan</a> (D-Durango) | <a rel="noreferrer noopener" aria-label="Sen. Nancy Todd (opens in a new tab)" href="http://leg.colorado.gov/legislators/nancy-todd" target="_blank">Sen. Nancy Todd</a> (D-Aurora) | Sen. <a rel="noreferrer noopener" href="http://leg.colorado.gov/legislators/jerry-sonnenberg" target="_blank">Jerry Sonnenberg</a> (R-Sterling) 



Bill Status: Passed House and Senate. Sent to Governor for signature on 6/1. Signed by Governor on 7/13.



Bill History: Bill introduced in House on 1/15. House Finance approved the bill on 2/10. House Appropriations approved the bill on 2/21. Bill passed Third Reading on 2/28: Aye-50, No-13, Other-2. 



Introduced in Senate on 3/2. Senate Finance referred unamended on 3/12. Bill passed Third Reading on 6/1: Aye-28, No-7, Other-0.



PERA Board position: The PERA Board of Trustees considered this bill on their January 17 meeting and decided to not take a position.

2020 Proposed Legislation Status

After a historic pause, the state legislature returned to work in May. Four bills containing language related to PERA have been approved by both the House and Senate since the legislative session resumed. They now move to Governor Polis’s desk, where he can sign them into law or veto them. If he does not take action, the bills automatically become law after 10 days. 



A brief description of each bill, as well as the position taken by PERA’s Board, is included below.



<a href="https://leg.colorado.gov/bills/hb20-1379" target="_blank" rel="noreferrer noopener">HB 20-1379</a>: Suspension of the state’s direct distribution for one fiscal year



PERA Board position: PERA’s Board opposed the bill. As fiduciaries and pursuant to its funding policy, the Board opposes any reductions in contributions to PERA while PERA has unfunded liabilities.



What the bill does: This bill was introduced after the shuttered economy required billions to be cut from the state budget. The bill suspends the state’s $225 million direct distribution to PERA for the 2020-21 fiscal year. The <a rel="noreferrer noopener" href="https://peraontheissues.com/wp-content/uploads/2018/05/DirectDistribution-final.pdf" target="_blank">direct distribution</a> is an amount of money set aside annually in the state budget to bring PERA to full funding. It was first put into law in 2018 as part of SB 18-200. The bill does not adjust retiree benefit payments and is not related to direct deposit. The direct distribution is used solely to pay off PERA’s unfunded actuarial accrued liability.



The direct distribution is not the only source of contributions PERA receives. PERA also receives member contributions and employer contributions. In 2018, member contributions totaled $938 million and employer contributions totaled $1.745 billion. As an employer, the state contributed $567 million in employer contributions in 2018. The state will continue making normal employer contributions during the suspension of the direct distribution in the next fiscal year.



<a href="https://leg.colorado.gov/bills/hb20-1394" target="_blank" rel="noreferrer noopener">HB 20-1394</a>: Changes contribution rates for judges for two fiscal years



PERA Board position: PERA’s Board opposed the bill. The PERA Board, as fiduciaries and pursuant to its funding policy, opposes reductions in contributions to PERA while PERA has unfunded liabilities.



What the bill does: Like HB 20-1379, this bill is the result of an array of budget cuts the state made in May. The bill makes a temporary change to the contribution rates for state judges and their employer. Judges will contribute an additional five percent to PERA for fiscal years 2020-21 and 2021-22 while employer contributions are reduced by five percent.



These additional member contributions will go directly to each member’s account and are treated as normal contributions. While this change will affect a judge’s take-home pay, it will not affect his or her <a href="https://www.copera.org/pera-on-the-issues/pera-related-legislation-sent-to-governor" target="_blank" rel="noreferrer noopener">highest average salary</a> calculation.



While the total contributions coming to PERA will remain equal, the dollars received from employer contributions have a stronger effect in reducing PERA’s unfunded actuarial accrued liability than employee contributions. As a result, the bill has a slight negative effect on PERA’s goal of becoming fully funded.



This bill only applies to state court judges. The bill does not affect PERA contributions for those who work for the judicial branch in other roles, nor does it adjust contributions made by Denver County Court Judges.



<a href="https://leg.colorado.gov/bills/sb20-057" target="_blank" rel="noreferrer noopener">SB 20-057</a>: Adds firefighters employed by the Department of Public Safety to the Safety Officer benefit structure in PERA



PERA Board position:&nbsp;The PERA Board of Trustees considered this bill at its January 17 meeting and decided to not take a position.



What the bill does: The Division of Fire Prevention and Control is part of the Department of Public Safety. This bill alters the benefits firefighters in this Division receive, including PERA benefits, to reflect the nature of the job description.



Certain PERA employers hire people who fall under the category of “Safety Officers.” The state legislature, not PERA, determines which positions fall under this category. Safety Officers have a higher PERA contribution rate than other PERA members. They also use different tables to calculate their benefit. These tables were formerly referred to as “Trooper tables,” as State Trooper was once the primary job to fall under this category. However, in 2018, the state legislature added county sheriffs, corrections officers, and similar positions to the category, a change that went into effect in 2019.



SB 20-057 adds all current and future employees classified as a firefighter I through firefighter VII to the category of Safety Officer, beginning on July 1, 2020.



Current employees who had been building a benefit with PERA under the standard PERA tables will begin building a dual-service benefit under this new structure that takes into account the benefit earned under each structure. &nbsp;



<a href="http://leg.colorado.gov/bills/HB20-1127" target="_blank" rel="noreferrer noopener">HB 20-1127</a>: Modifies the rules for retirees hired by a BOCES



PERA Board position:&nbsp;The PERA Board of Trustees considered this bill at its January 17 meeting and decided to not take a position.



What the bill does: PERA retirees who wish to work at a PERA employer in retirement must follow <a href="https://www.copera.org/retirees/working-after-retirement" target="_blank" rel="noreferrer noopener">requirements</a> established by the state legislature. The bill modifies the rules for certain retirees hired by a Boards of cooperative services (BOCES).



BOCES provide special education services to the school districts they serve. Almost all of these school districts are in rural parts of the state. BOCES often face difficulty hiring qualified people to serve as special service providers in these areas.



The bill allows a PERA retiree who is a special service provider (which includes school psychologists, early childhood education teachers, speech language pathologists, and more) to work beyond the limits set by these requirements. They can do this for up to five consecutive years without a reduction in their benefits.



The bill requires a BOCES that hires a PERA retiree to provide full payment of all PERA employer contributions, disbursements, and working retiree contributions. In addition, the BOCES is required to pay an additional amount equal to two percent of the retiree’s salary to PERA.



Under the bill’s provisions, all BOCES combined may hire no more than 40 people over five years.







Editor&#8217;s note: This story was updated on 6/9 to reflect the passage of SB 20-057

PERA-related Legislation Sent to Governor

Colorado’s legislature temporarily adjourned on March 14, well before the clock ran out on the 120 days legislators have to work with. This shutdown, of course, was due to COVID-19, a virus that has altered nearly every aspect of life around the globe. The medical reasons to shut down were clear. But the outlook on reopening is still hazy.



The Colorado Supreme Court cleared up some confusion earlier this month. It <a rel="noreferrer noopener" href="https://www.cpr.org/2020/04/01/colorado-supreme-court-decides-legislative-session-can-extend-end-date/" target="_blank">ruled</a> that, because the adjournment occurred under a rule of procedure that allows for increased flexibility during disease-related emergencies, the legislature’s countdown clock would be paused, resuming when they return, instead of continuing to tick down while they are away. 



Whenever lawmakers do return, they will face a list of questions with no easy answers.



The Road Forward



This ruling gives the legislature additional time to do their work—if the court had decided the legislative clock would continue ticking, session would end on May 6. But the additional time granted to legislators does not necessarily offset the scope of the challenge ahead.



The legislature has a plan to address a few high priority items. For example, the Joint Budget Committee is <a rel="noreferrer noopener" href="https://leg.colorado.gov/committees/joint-budget-committee/2020-regular-session" target="_blank">scheduled</a> to meet on May 12 to hear an updated economic forecast presented by the Governor’s Office of State Planning &amp; Budgeting and Legislative Council Staff. Other high-priority legislation includes the School Finance Act and reviewing <a rel="noreferrer noopener" href="https://leg.colorado.gov/sites/default/files/the-sunset-process.pdf" target="_blank" class="broken_link">sunset</a> legislation, not to mention any additional legislation required to address the pandemic.



While the legislature has mapped out the first steps forward, nobody knows where, how, or when this year’s legislative session will end. The legislature might reconvene to pass a budget, temporarily adjourn again, and reconvene later in the year. They might consider rules to do their work remotely. 



To what extent legislators address bills that were introduced as of March 14 is another unknown. This includes addressing <a rel="noreferrer noopener" href="https://peraontheissues.com/2020-proposed-legislation-status/" target="_blank">bills</a> that would modify the status of firefighters in PERA and change working-after-retirement rules for PERA retirees employed by a board of cooperative services.



Revisiting the State Budget 



Passing a budget will be a daunting challenge. The six lawmakers on the Joint Budget Committee, who were allocating dollars amid a bustling Colorado economy in January, now find themselves facing a significant <a rel="noreferrer noopener" href="https://www.denverpost.com/2020/04/09/colorado-budget-cuts-coronavirus/" target="_blank">shortfall</a>. 



&#8220;Before the emergence of COVID-19, the JBC was working with an increase in funding of more than $500 million over last year,&#8221; said Michael Steppat, Colorado PERA’s Public and Government Affairs Manager. &#8220;Now they face a shortfall that could approach $3 billion. Plus, they have a little more than a month to revisit every single spending decision they have made whereas the normal budgeting process typically takes months.&#8221;



The manner in which PERA’s funding is part of the budgeting process is nuanced. Members and employers send PERA contributions based on a percentage of pay. The state budgeting process sets pay rates and employment levels for state employees—a legislative task separate from setting the contribution rates—while school districts and local governments determine pay and employment levels for their employees. As part of SB 18-200, the legislature also created the <a rel="noreferrer noopener" href="https://content.copera.org/legislative-update-an-uncertain-path-ahead/" target="_blank">Direct Distribution</a>, in which an amount, currently $225 million each fiscal year, is sent to PERA, although this component is not appropriated by the Joint Budget Committee.



Federal Funds and the State’s Budget



Over the past two months, the U.S. Congress has passed a <a href="https://leg.colorado.gov/sites/default/files/r20-348_summary_of_new_federal_families_first_act_0.pdf" target="_blank" rel="noreferrer noopener">number of bills</a> that provide economic relief to individuals, businesses, and also funds for governments at the state, territorial, local, and tribal level. To date, the aid provided by all “phases” of legislation amounts to $2.7 trillion.



About $2.2 billion was allocated for Colorado, as part of the CARES Act, to be split between the state and local jurisdictions with populations exceeding 500,000. The funds do come with strings attached. According to U.S. Treasury <a rel="noreferrer noopener" href="https://home.treasury.gov/system/files/136/Coronavirus-Relief-Fund-Guidance-for-State-Territorial-Local-and-Tribal-Governments.pdf" target="_blank">guidelines</a>, &#8220;expenditures must be used for actions taken to respond to the public health emergency.&#8221; In other words, the funds may not be used to offset indirect costs related to the pandemic, including &#8220;backfilling&#8221; the state budget.



PERA On The Issues will continue following this highly unusual legislative session and post updates as they occur.

Legislative Update: An Uncertain Path Ahead

A digest of news from publications around the nation about finance, investing, and retirement.



<a href="https://www.copera.org/retirement-roundup-monitoring-finances-amid-covid-19" target="_blank" rel="noreferrer noopener" label=" (opens in a new tab)" class="broken_link">When market drops, play long game with retirement savings</a> | <a href="https://abcnews.go.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">ABC News</a>



Watching the value investment accounts fall is not fun, regardless of your age. Those with time on their side, however, have some flexibility. You’ve only truly lost money if you sell investments at a loss. But if retirement is far in the future, there’s no need to sell investments today. In fact, if you haven&#8217;t touched those accounts you still hold the same number of shares you did two months ago—it’s just that the value of each share has declined. A time-tested philosophy is to simply wait out the storm. Some might look into rebalancing or taking a look at your diversification levels, but general consensus says don’t make big changes during periods of volatility.



<a href="https://www.consumerfinance.gov/about-us/blog/protect-yourself-financially-from-impact-of-coronavirus/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Protect yourself financially from the impact of the coronavirus</a> | <a href="https://www.consumerfinance.gov" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Consumer Financial Protection Bureau</a>



The worldwide crisis resulting from COVID-19 is filled with unknowns. But losing an income, being unable to pay bills, or facing a sudden need for health care can turn these hazy question marks into a reality with issues that are crystal clear, even if the answers seem just as illusive. If the financial implications of the COVID-19 crisis begin to affect your finances, know what tools you have available and what steps you should take.



<a href="https://www.cpr.org/2020/03/14/legislature-takes-historic-pause-amid-coronavirus-concerns/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Legislature Takes Historic Pause Amid Coronavirus Concerns</a> | <a href="https://www.cpr.org" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">CPR</a>



For the first time in state history, the Colorado Legislature has paused the legislative session. For at least two weeks, no bill will move forward. As they venture into uncharted territory, House and Senate leaders aren’t even sure about whether the constitutionally-mandated 120-day session length should include the duration of this legislative pause. They have submitted the question to the Colorado Supreme Court. Whenever they do reassemble, one thing is all but certain: Everything will be different. Priorities have changed, the budget will need to be altered due to the expected downturn in the economy, and time might be short.



<a href="https://finance.yahoo.com/news/retired-nearly-weather-market-downturn-201711514.html" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Retired or nearly there? How to weather a market downturn</a> | <a href="https://finance.yahoo.com/" target="_blank" rel="noreferrer noopener" aria-label="Yahoo Finance (opens in a new tab)">Yahoo Finance</a>



Those in retirement or nearing retirement during market downturns have a different set of financial concerns than those who won’t be withdrawing from those accounts for years. Cutting back on spending, if you’re able, is one way to give your nest egg some breathing room. If nothing else, downturns remind us all about the importance of diversification and having a plan that takes into account the risk of downturns.

Retirement Roundup: Monitoring Finances Amid COVID-19

At 10 a.m. on January 8, the sudden bang of a gavel striking its sounding block will pierce the morning air in Colorado’s State Capitol. This will happen twice—once in the green chambers of the House of Representatives and once in the Senate’s red chambers. As the lawmakers bring their conversations to a close and come to order, Colorado’s 2020 legislative session will be underway.



The gavel might as well be a checkered flag. Until early May, Colorado’s 100 lawmakers will discuss, debate, and eventually decide upon policies that will shape the future. Colorado has grown in size and complexity in nearly every measurable way since those Frontier days of 1876. But legislators today, as then, have only 120 days to keep state law in step with changes that occur on all 365. The result is a jam-packed, fast-paced schedule, filled with hundreds of bills that cover an array of subjects. On the most controversial topics, debate can last into the early morning.



Michael Steppat is Colorado PERA’s Public &amp; Government Affairs Manager. He is tasked with navigating and deciphering the subtleties of the legislative process. He tracks legislation, maintains relationships with legislators, oversees lobbying, and more.


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<figure class="alignright"><img decoding="async" src="https://www.copera.org/colorados-state-legislature-goes-to-work-what-to-expect-in-2020"" class="wp-image-2734"/><figcaption class="wp-element-caption">Michael Steppat, Colorado PERA’s Public &amp; Government Affairs Manager</figcaption></figure></div>


Below, he shares more about his
role at PERA, the ways in which PERA governance is unique, issues related to
oversight and transparency, and what to expect in the upcoming legislative
session.



What’s your role at PERA?



I represent PERA at the Capitol. I monitor and report on legislative activity, builds and maintains relationships with legislators and other stakeholders, and oversee lobbying efforts. I also serve as the liaison for legislative committee staff.



Can you describe the similarities and differences between PERA and
state agencies?



PERA is probably often viewed by the average citizen as a state agency. But it’s not. <a href="https://www.copera.org/colorados-state-legislature-goes-to-work-what-to-expect-in-2020" target="_blank" rel="noreferrer noopener" label=" (opens in a new tab)" class="broken_link">State law</a> actually says “The association is an instrumentality of the state.”



I think one of the key differences is governance. We report to a Board of Trustees. State departments and agencies don’t. They have heads appointed by the governor. Also, PERA’s budget is not set by the legislature.



Despite those differences, there
are also some similarities. For example, PERA still reports to the General
Assembly through multiple oversight committees. 



So PERA has a Board of Trustees, but state legislators also govern
PERA. Can you explain the different responsibilities each group has?



The <a rel="noreferrer noopener" label=" (opens in a new tab)" href="https://www.copera.org/recap-of-pera-boards-june-2021-meeting" target="_blank" class="broken_link">Board</a>, which includes trustees <a href="https://www.copera.org/pera-on-the-issues/four-board-seats-up-for-election-in-2022" target="_blank" rel="noreferrer noopener" label=" (opens in a new tab)">elected</a> directly by our members as well as trustees appointed by the governor, oversees the investment program and administration of benefits. They do not set contribution rates or benefit levels—only the legislature can. The Board appoints PERA’s Executive Director to implement its policies. PERA is also independently audited by a third-party through the Office of the State Auditor every year.



A few different committees at the State Capitol deal with PERA
matters. What do these committees do, and why are there more than one?



Each committee has a different focus. 



The <a href="https://leg.colorado.gov/committees/legislative-audit-committee/2019-regular-session" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Legislative Audit Committee</a> goes through PERA’s annual financial and compliance audit. They ensure the financial statements are accurate. 



The <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://leg.colorado.gov/committees/joint-budget-committee/2019-regular-session" target="_blank">Joint Budget Committee</a> (JBC) reviews budgetary and personnel matters. PERA’s annual report to the Joint Finance Committee is similar to the JBC.



The <a href="https://leg.colorado.gov/committees/joint-finance" target="_blank" rel="noreferrer noopener" aria-label="Joint Finance Committee (opens in a new tab)">Joint Finance Committee</a> reviews certain departments, including PERA, annually pursuant to the SMART Government Act. One of the intended goals is to get committees of reference more involved in the state budgeting process. 



The <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://leg.colorado.gov/committees/pension-review-commission/2019-regular-session" target="_blank">Pension Review Commission</a> has the responsibility to study and develop proposed legislation relating to FPPA and PERA, covering a number of subjects. 



The <a href="https://leg.colorado.gov/committees/pension-review-subcommittee/2019-regular-session" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Pension Review Subcommittee</a> focuses on the financial health of the organization. Unlike the other committees, this committee includes members of the public, based on subject matter expertise.



Does PERA lobby elected officials? What does lobbying look like?



PERA does contract with lobbyists.




Lobbying is essentially advocacy of a point of view, however most don’t realize ninety percent of communication with lawmakers is education. Legislators come from varying walks of life. There are more than five hundred bills introduced every session on a variety of topics. Lobbyists are experts in their specific areas and help legislators understand the nuances of a subject.



It’s important that PERA is represented and can provide education to legislators, especially given legislator turnover at the State Capitol because of term limits.



Does PERA take positions on bills?



The Board may take positions on bills that directly impact PERA. Even if the Trustees don’t take a position, we may need to testify or provide information. We must ensure that the facts are out there so lawmakers can make informed decisions.



If PERA members want to know more about the legislative process or
become more involved, where would they start?



PERA On The Issues is a good place to start. The General Assembly <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://leg.colorado.gov/" target="_blank">website</a> is a great tool. The <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.youtube.com/channel/UC0SZt6q5iQxTi12lv2MOq0A" target="_blank">Colorado Channel</a> on YouTube has live and archived video of the House and Senate floor. You can listen to <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://leg.colorado.gov/content/committees" target="_blank">committee meetings</a>, view <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://leg.colorado.gov/interim-schedule" target="_blank">calendars</a>, and review the <a href="https://leg.colorado.gov/bills" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">status of a bill</a> online. You can even sign up to testify at committee meetings. Colorado is a pretty transparent state. 



Most importantly, <a href="https://leg.colorado.gov/legislators" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">legislators</a> need to hear from constituents in their districts. That often ends up being influential.



Do you anticipate seeing any proposed legislation related to PERA
this year?



We expect to see something dealing with <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.copera.org/retirees/working-after-retirement" target="_blank">Working After Retirement rules</a> as well as changes to the types of jobs that are eligible to be on the Safety Officer <a rel="noreferrer noopener" label=" (opens in a new tab)" href="https://www.copera.org/pera-on-the-issues/pera-related-legislation-sent-to-governor" target="_blank">table</a>, which currently includes positions like State Troopers. Divestment issues are a possibility, too. PERA will also deliver a calculation concerning the funding of the Denver Public Schools trust fund. 



It’s important to remember that PERA,
or any other stakeholders, don’t introduce bills. Legislation is solely the
responsibility of legislators.

Tag Archives:

Year in Review: Top Stories of 2020

2020 Proposed Legislation Status

PERA-related Legislation Sent to Governor

Legislative Update: An Uncertain Path Ahead

Retirement Roundup: Monitoring Finances Amid COVID-19

Colorado’s State Legislature Goes to Work: What to Expect in 2020

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