
<p>Retirement insights from a Colorado PERA perspective</p>



<p></p>


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


<p>As 2024 comes to a close, we’re taking a look back at the articles that resonated most with <em>PERA On The Issues </em>readers. Here are our most-read articles of the year.</p>



<h4 class="wp-block-heading"><a href="https://www.copera.org/pera-on-the-issues/2024-proposed-legislation-status"><strong>2024 Proposed Legislation Status</strong></a></h4>



<p>Legislation is always a popular topic on <em>PERA On The Issues</em>, and 2024 was no exception—our article tracking PERA-related bills throughout the session was our most-visited page of the year. State lawmakers introduced nine PERA-related bills during the legislative session, ultimately passing six of them, though one was amended to remove the provision related to PERA.</p>



<p>Continue reading to find out what we expect to see in the 2025 legislative session.</p>



<h4 class="wp-block-heading"><a href="https://www.copera.org/pera-on-the-issues/what-to-expect-for-medicare-advantage-in-2025-blog"><strong>What to Expect for Medicare Advantage in 2025</strong></a></h4>



<p>The open enrollment period for PERACare—PERA’s health benefits program—happens every fall for coverage beginning the following January. While premiums for PERACare’s Medicare Advantage plans had been stable for three years, that rate freeze expired and various regulatory changes led to carriers announcing this fall that Medicare Advantage premiums would be higher for plan year 2025.</p>



<h4 class="wp-block-heading"><a href="https://www.copera.org/pera-on-the-issues/updated-tax-brackets-contribution-limits-and-more-to-know-for-2025"><strong>Updated Tax Brackets, Contribution Limits and More to Know for 2025</strong></a></h4>



<p>If you’re already thinking about your tax situation for 2025, you’re not alone. Our roundup of various tax-related inflation adjustments was one of our most-read articles of the year. The article includes details on updated retirement plan contribution limits, HSA/FSA contribution limits, new marginal tax brackets, and more.</p>



<h4 class="wp-block-heading"><a href="https://www.copera.org/pera-on-the-issues/u-s-house-passes-wep-gpo-repeal-bill-heads-to-senate" target="_blank" rel="noreferrer noopener"><strong>U.S. House Passes WEP/GPO Bill, Heads to Senate</strong></a></h4>



<p>We frequently hear from PERA members who are frustrated with the way the Windfall Elimination Provision (WEP) and/or Government Pension Offset (GPO) reduce their Social Security benefit, so it was no surprise to see a high level of interest in the topic again this year.</p>



<p>Lawmakers have been introducing bills to modify or repeal WEP and/or GPO for years, and in 2024 the House of Representatives brought one such bill, the Social Security Fairness Act, up for a vote and passed it. With the bill awaiting action in the Senate, PERA and the Fire &amp; Police Pension Association of Colorado teamed up to <a href="https://content.copera.org/wp-content/uploads/2024/12/COPERA-and-FPPA_Please-Support-Repeal-of-Provisions-in-Social-Security-WEP-and-GPO_12.13.24.pdf">send a letter to Colorado’s senators</a> encouraging them to support the bill. The bill has since passed the Senate and is awaiting President Biden&#8217;s signature.</p>



<h4 class="wp-block-heading"><a href="https://www.copera.org/pera-on-the-issues/state-lawmakers-pursuing-two-pera-related-bills-in-2025" target="_blank" rel="noreferrer noopener"><strong>State Lawmakers Pursuing Two PERA-Related Bills in 2025</strong></a></h4>



<p>Back here in Colorado, state lawmakers are getting ready for the start of another legislative session in January. We expect to see some PERA-related legislation introduced in the new session, including two bills that lawmakers on the Pension Review Commission drafted during this year’s interim period between sessions.</p>



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<p>We want to thank everyone who subscribes and reads <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>Make sure you’re <a href="https://www.copera.org/pera-on-the-issues/subscribe">subscribed to our biweekly newsletter</a> to stay up-to-date on all the latest news, and join the conversation on <a href="https://www.facebook.com/ColoradoPERA/" class="broken_link">Facebook</a> and <a href="https://www.linkedin.com/company/colorado-pera">LinkedIn</a>.</p>


Year in Review: Our Top Articles of 2024


<p>Since 1931, Colorado PERA has been providing retirement and other benefits to the public employees who keep our state running. As the workforce and retirement landscape have changed, PERA also has adapted and grown; Colorado’s largest public retirement plan now covers nearly 700,000 current and former public workers.</p>



<p>PERA benefits, including the hybrid defined benefit plan and the option for some members to choose a defined contribution plan, have been valuable in helping public agencies recruit and retain employees for decades. Critics of defined benefit pensions, however, argue that today’s workers would be better served by other types of plans. An upcoming study will help shed light on that debate.</p>



<h4 class="wp-block-heading"><strong>Purpose and scope</strong></h4>



<p>During the 2024 legislative session, state lawmakers passed <a href="https://leg.colorado.gov/bills/hb24-1427" target="_blank" rel="noreferrer noopener">House Bill 1427</a>, which&nbsp;calls for the State Auditor, in cooperation with PERA, to enlist an independent actuarial firm experienced with public pensions to conduct a comprehensive study comparing the cost and effectiveness of the PERA Defined Benefit (DB) Plan to alternative plan designs, as well as providing an analysis of certain aspects of PERA’s current&nbsp;defined benefit&nbsp;and&nbsp;defined contribution&nbsp;plans.</p>



<p>The study will be similar in scope and purpose to&nbsp;<a href="https://content.copera.org/key-pera-features-make-colorados-largest-retirement-plan-efficient-and-effective/" target="_blank" rel="noreferrer noopener">a study that took place following similar legislation in 2014</a>. That study compared various facets of the PERA DB Plan—such as cost per member, contribution rates, income replacement ratio, and&nbsp;portability—to other public and private sector plan types, including Social Security. The study is <a href="http://leg.colorado.gov/sites/default/files/documents/audits/1409s_colorado_public_employees_retirement_association_pera_hybrid_defined_benefit_plan_study.pdf" target="_blank" rel="noreferrer noopener">available online here</a>.</p>



<p>Why refresh the study after a decade? In part, things have changed, and state leaders see value in having updated data. Since the last study, Colorado has seen tremendous growth, the public workforce has changed, and various reforms have put PERA on a path to full funding. This new study will incorporate all those changes to provide a more accurate assessment of PERA’s value to employers and the state as a whole.</p>



<p>While a lot has changed in the past 10 years, one thing that hasn’t is PERA’s commitment to providing retirement security to our members. The previous study concluded that PERA’s plan provides a better benefit at a lower cost than other plans, making it the best option for providing retirement benefits to the state’s public employees. We believe an updated study will show the same results.</p>



<h4 class="wp-block-heading"><strong>What’s next?</strong></h4>



<p>The State Auditor and PERA have until the end of October to select an actuarial firm to conduct the study. Once a firm is selected, the study is likely to take several months to complete.</p>



<p>When the study is complete, PERA and the State Auditor will provide a report of the study’s findings to the governor, the Joint Budget Committee, the Legislative Audit Committee, and the House and Senate Finance Committees.</p>



<p>We’ll also provide a summary of the study’s findings here on <em>PERA On The Issues</em>. Make sure you’re <a href="https://www.copera.org/pera-on-the-issues/subscribe">subscribed</a> to our biweekly newsletter to receive all the latest updates.</p>


Why the State is Commissioning a Study on PERA’s Plan Design


<h4 class="wp-block-heading"><a href="https://www.9news.com/article/news/local/local-politics/new-colorado-laws-effect-july-1-2024/73-fa0723cb-9ee3-4666-9d67-851b0a130aef" target="_blank" rel="noreferrer noopener"><strong>New Colorado Laws Go Into Effect July 1, 2024 | 9News</strong></a></h4>



<p>During the recently concluded legislative session, state lawmakers passed more than 500 bills and sent them to Gov. Jared Polis for action. Of the bills signed into law, some are now starting to go into effect. Here are details on new laws taking effect July 1, including one pertaining to PERA retirees returning to work in school districts.</p>



<h4 class="wp-block-heading"><a href="https://www.marketplace.org/2024/06/12/elevated-interest-rates-rate-hike-lagging-effect/" target="_blank" rel="noreferrer noopener"><strong>The &#8220;Lag Effect&#8221; of High Interest Rates is Playing Out | Marketplace</strong></a></h4>



<p>When the Federal Reserve began raising interest rates in an effort to tamp down inflation in 2022, it did so with the understanding that the effects of higher rates would take some time to be realized. Experts say we’re now seeing some of those effects, though relief in the form of lower rates may not come as soon as previously expected.</p>



<h4 class="wp-block-heading"><a href="https://www.cnbc.com/2024/06/13/dont-just-set-it-and-forget-it-how-to-do-a-mid-year-financial-checkup.html" target="_blank" rel="noreferrer noopener"><strong>Don’t &#8216;Just Set It and Forget It&#8217;: How To Do a Mid-Year Financial Checkup | CNBC</strong></a></h4>



<p>We’re halfway through 2024, and it’s a great time to pause and take stock of your financial situation for the year so far and gauge your progress toward meeting any goals you might have made. Taking a look at your cash flow, account balances, and even thinking ahead to next year’s tax returns can all help you make sure you’re on the right track.</p>



<h4 class="wp-block-heading"><a href="https://www.morningstar.com/retirement/8-little-known-facts-about-required-minimum-distributions" target="_blank" rel="noreferrer noopener"><strong>8 Little-Known Facts About RMDs | Morningstar</strong></a></h4>



<p>If you’re retired, you’re probably familiar with required minimum distributions (RMDs) which are retirement account withdrawals you have to take from plans like IRAs and 401(k)s each year once you reach a certain age. But knowing when to start taking them and how much to withdraw can be a challenge, especially as rules change. Here are some tips and some common misconceptions about RMDs.</p>



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<p><em>News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.</em></p>


News You Should Know: New Laws Going Into Effect July 1


<p>That’s a wrap—Colorado’s 2024 legislative session has come to an end.</p>



<p>Each session, legislators introduce hundreds of new bills, and it’s not unusual for some of them to pertain to PERA and its members. This year, lawmakers proposed nine PERA-related bills.</p>



<p>By the end of the session on May 8, six of those nine bills had passed and were either signed into law or will be sent to Gov. Jared Polis for action.</p>



<p>Below is a summary of the bills that passed. For information on the other proposed bills,&nbsp;<a href="https://peraontheissues.com/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">click here</a>.</p>



<h4 class="wp-block-heading"><strong>Working after retirement</strong></h4>



<p>Lawmakers approved two bills that expand the number of PERA retirees who can return to work without a reduction in their benefits, both of which Gov. Polis signed into law.</p>



<p>Under current law, all PERA retirees may work up to 110 days or 720 hours per calendar year for one or more PERA employer(s) without a reduction in their retirement benefits. In addition to the 110 days for all retirees, employers in the School and Denver Public Schools (DPS) divisions, as well as each state college or university, can designate up to 10 retirees who are permitted to work up to 140 days or 916 hours per calendar year without reductions to their PERA benefits.&nbsp;<a href="https://leg.colorado.gov/bills/hb24-1044" target="_blank" rel="noreferrer noopener">House Bill 1044</a>&nbsp;will allow districts with more than 10,000 students to designate an additional retiree for each thousand students over 10,000.</p>



<p>Also, rural school districts can declare a critical shortage of qualified teachers, school bus drivers, food service workers, school nurses, or paraprofessionals and hire PERA retirees to fill those positions without having their retirement benefits reduced.&nbsp;<a href="https://leg.colorado.gov/bills/sb24-099" target="_blank" rel="noreferrer noopener">Senate Bill 99</a>&nbsp;adds principals and superintendents to the list of qualified positions.</p>



<p><strong>RELATED:</strong>&nbsp;<a href="https://content.copera.org/state-lawmakers-pass-six-pera-related-bills-in-2024-legislative-session/" target="_blank" rel="noreferrer noopener">Understanding the Financial Impact of Working After Retirement</a></p>



<h4 class="wp-block-heading"><strong>Actuarial study</strong></h4>



<p><a href="https://leg.colorado.gov/bills/hb24-1427" target="_blank" rel="noreferrer noopener">House Bill 1427</a>&nbsp;calls for the State Auditor, in cooperation with PERA, to enlist an independent actuarial firm experienced with public pensions to conduct a comprehensive study comparing the cost and effectiveness of the PERA&nbsp;Defined Benefit&nbsp;Plan to alternative plan designs, as well as providing an analysis of certain aspects of PERA current&nbsp;defined benefit&nbsp;and&nbsp;defined contribution&nbsp;plans.</p>



<p>As Colorado’s public workforce evolves, it’s important that Colorado PERA remain flexible enough to meet the membership’s changing needs. This study will help policymakers assess PERA’s continued value in recruiting and retaining a highly qualified public workforce in the years ahead.</p>



<p><strong>READ MORE:</strong>&nbsp;<a href="https://www.copera.org/state-lawmakers-pass-six-pera-related-bills-in-2024-legislative-session" target="_blank" rel="noreferrer noopener" class="broken_link">Lawmakers Pass Bill to Refresh Study on Value of PERA’s&nbsp;Defined Benefit&nbsp;Plan</a></p>



<h4 class="wp-block-heading"><strong>Other PERA provisions</strong></h4>



<p>Other bills that passed the Legislature made minor adjustments to PERA membership provisions by expanding the definition of “State Trooper” for the purpose of PERA benefits.</p>



<p><a href="https://leg.colorado.gov/bills/sb24-169" target="_blank" rel="noreferrer noopener">Senate Bill 169</a>&nbsp;expands the definition of State Trooper for the purpose of PERA benefits to include duly sworn employees of the Division of Fire Prevention and Control in the Department of Public Safety whose duties include structural or wildfire management, wildfire response, live-fire training, or wildfire leadership, as determined by the executive director of the department.</p>



<p><a href="https://leg.colorado.gov/bills/sb24-186" target="_blank" rel="noreferrer noopener">Senate Bill 186</a>&nbsp;expands the definition of State Trooper for the purpose of PERA benefits to include county coroners and deputy coroners.</p>



<p>Another bill,&nbsp;<a href="https://leg.colorado.gov/bills/sb24-013" target="_blank" rel="noreferrer noopener">Senate Bill 13</a>, seeks to establish salary parity among publicly funded lawyers in the criminal justice system. The introduced version of the bill also included a provision related to PERA, but this was removed from the final bill passed by the Legislature.</p>


State Lawmakers Pass Six PERA-Related Bills in 2024 Legislative Session


<p>The Colorado Legislature this month approved a bill that directs the Office of the State Auditor to commission an updated study comparing the value of PERA’s&nbsp;hybrid&nbsp;defined benefit&nbsp;(DB) plan to other plan designs.</p>



<p><a href="https://leg.colorado.gov/bills/hb24-1427" target="_blank" rel="noreferrer noopener">House Bill 1427</a>&nbsp;calls for the State Auditor, in cooperation with PERA, to enlist an independent actuarial firm experienced with public pensions to conduct a comprehensive study comparing the cost and effectiveness of the PERA DB Plan to alternative plan designs, as well as providing an analysis of certain aspects of PERA’s current&nbsp;defined benefit&nbsp;and&nbsp;defined contribution&nbsp;plans.</p>



<p>The study will be similar in scope and purpose to <a href="https://content.copera.org/key-pera-features-make-colorados-largest-retirement-plan-efficient-and-effective/" target="_blank" rel="noreferrer noopener">a study that took place following similar legislation in 2014</a>. That study compared various facets of the PERA DB Plan—such as cost per member, contribution rates, income replacement ratio, and portability—to other public and private sector plan types, including Social Security. The study concluded that PERA’s plan provides a better benefit at a lower cost than other plans, making it the best option for providing retirement benefits to the state’s public employees.</p>



<p><strong>READ MORE:</strong> <a href="https://content.copera.org/key-pera-features-make-colorados-largest-retirement-plan-efficient-and-effective/" target="_blank" rel="noreferrer noopener">Key PERA Features Make Colorado’s Largest Retirement Plan Efficient and Effective (from 2015)</a></p>



<p>As Colorado’s public workforce evolves, it’s important that Colorado PERA remain flexible enough to meet the membership’s changing needs. This study will help policymakers assess PERA’s continued value in recruiting and retaining a highly qualified public workforce in the years ahead.</p>



<p>If HB24-1427 is signed into law, the State Auditor and PERA will have until the end of October to select an actuarial firm. When the study is complete, PERA and the State Auditor will provide a report of the study’s findings to the governor, the Joint Budget Committee, the Legislative Audit Committee, and the House and Senate Finance Committees.</p>



<p>In addition to HB24-1427, lawmakers have passed two other PERA-related bills, both of which will expand provisions for PERA members who return to work in retirement. Those bills have been sent to the governor for his signature.</p>



<p><strong>RELATED</strong>: <a href="https://content.copera.org/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">2024 Proposed Legislation Status</a></p>


Lawmakers Pass Bill to Refresh Study on Value of PERA’s Defined Benefit Plan


<p>The Colorado PERA Board of Trustees met virtually on Friday, March 15 for its second regularly scheduled meeting of the year.</p>



<p>Below is a summary of key actions and discussions that took place during the meeting.</p>



<h4 class="wp-block-heading"><strong>New Executive Director</strong></h4>



<p>At the beginning of the meeting, the Board announced it has selected PERA’s next Executive Director following an eight-month nationwide search.</p>



<p>Andrew Roth will fill that role beginning May 13. He comes to PERA from the Teacher Retirement System of Texas, and previously worked at the California State Teachers’ Retirement System and in various departments within the State of California.</p>



<blockquote class="wp-block-quote">
<p><strong>READ MORE:</strong> <a href="https://peraontheissues.com/pera-board-names-andrew-roth-as-new-executive-director/" target="_blank" rel="noreferrer noopener">PERA Board Names Andrew Roth as New Executive D</a><a href="https://content.copera.org/pera-board-names-andrew-roth-as-new-executive-director/" target="_blank" rel="noreferrer noopener">irector</a></p>
</blockquote>



<h4 class="wp-block-heading"><strong>Board election update</strong></h4>



<p>The Board announced in January that four Trustee seats would be up for election in May. At the March meeting, Trustees voted to move forward with elections for three of those seats—one in the School Division and two in the State Division.</p>



<p>The Denver Public School Division seat, currently held by Amy Grant, is uncontested. The Board voted to reappoint Grant to another four-year term beginning in July.</p>



<p>Members in the School and State divisions will receive ballots in May, and the Board will announce election results at its June meeting.</p>



<h4 class="wp-block-heading"><strong>Legislative update</strong></h4>



<p>State lawmakers are halfway through the 2024 legislative session, and Public and Government Affairs Manager Michael Steppat joined Interim Executive Director/Chief Investment Officer Amy C. McGarrity to provide an update on PERA-related legislation.</p>



<p>So far this session, legislators have introduced more than 500 bills, <a href="https://content.copera.org/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">seven of which pertain to PERA</a>.</p>



<p>Of those seven proposed bills, one—<a href="https://leg.colorado.gov/bills/hb24-1169" target="_blank" rel="noreferrer noopener">HB24-1169</a>, which would have repealed a 2016 law that requires PERA to divest all direct holdings from companies that have economic prohibitions against Israel—has died in committee. The other six remain under consideration at the State Capitol.</p>



<p>Steppat said it’s likely there will be some additional PERA-related legislation before the session is over. <em>PERA On The Issues</em> will continue to <a href="https://content.copera.org/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">track all PERA bills</a> and post updates when they’re available.</p>



<blockquote class="wp-block-quote">
<p><strong>RELATED: </strong><a href="https://content.copera.org/an-update-on-2023-wep-gpo-legislation/" target="_blank" rel="noreferrer noopener">An Update on 2023 WEP/GPO Legislation</a></p>
</blockquote>



<h4 class="wp-block-heading"><strong>Asset/liability study continues</strong></h4>



<p>The Board also received an update on its <a href="https://content.copera.org/asset-liability-study-a-guide-to-building-a-strategic-portfolio/" target="_blank" rel="noreferrer noopener">ongoing asset/liability study</a>. That study, which is an in-depth analysis of PERA’s investment portfolio and strategy, will help the Trustees determine if any changes are needed to PERA’s asset allocation, or mix of investments.</p>



<p>The Board’s consultants, Aon, modeled several different&nbsp;asset allocation—some with more risk than the current portfolio and some with less—across thousands of different economic scenarios to project how each option might affect PERA’s investment returns and progress toward its funding goals.</p>



<p>Overall, PERA’s current portfolio is within a reasonable range, Aon said, but there may be some opportunities to further diversify in a way that increases the potential for higher returns without adding unnecessary risk.</p>



<p>Consultants and PERA staff will continue to work on a recommendation and will present more information at the next Board meeting.</p>



<p>The Board’s next regular meeting, which will also include the release of PERA’s 2023&nbsp;<em>Annual Comprehensive Financial Report&nbsp;</em>and&nbsp;<em>Investment&nbsp;Stewardship&nbsp;Report</em>, is scheduled for June 21.</p>


Recap of PERA Board’s March 2024 Meeting


<p>Two bills <a href="https://peraontheissues.com/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">making their way through the Colorado Legislature</a> would expand the number of PERA retirees who can return to work in school districts without facing a reduction in their benefits.</p>



<p>While the bills are intended to address an important staffing shortage in school districts across the state, there are potential financial implications to the trust funds that provide benefits for PERA members.</p>



<h4 class="wp-block-heading"><strong>Why limit how much retirees can work?</strong></h4>



<p>Public pension plans like Colorado PERA place limits on working after retirement in order to balance two competing priorities: The staffing needs of employers and the financial health of the retirement plan.</p>



<p>Generally speaking, allowing retirees to return to work, either for the same employer or a different employer covered by the same retirement plan, can encourage workers to retire earlier than they otherwise would have, since they can collect a salary in addition to receiving a monthly retirement benefit. Because plans project their finances based on factors such as workers’ expected retirement age, early retirements add to the plan’s cost due to a longer-than-expected period of benefit payments. Even if those retirees continue to contribute to their plan, like PERA retirees do, the contributions aren’t always enough to make up for the member’s extended retirement.</p>



<p>In most cases, PERA retirees can work for a PERA-affiliated employer for up to 110 days or 720 hours per calendar year without affecting their benefit. School districts and colleges/universities can designate a limited number of workers who are allowed to work up to 140 days or 916 hours per year, and some school districts can hire retirees to fill certain positions for which there is a critical need for qualified workers, and those “critical shortage” hires are not subject to <a href="https://www.copera.org/working-after-retirement" target="_blank" rel="noreferrer noopener">working after retirement limits</a>.</p>



<p>PERA regularly reports on the impact of working after retirement exemptions for <a href="https://content.copera.org/understanding-the-financial-impact-of-working-after-retirement/" target="_blank" rel="noreferrer noopener">rural school districts</a> and <a href="https://content.copera.org/understanding-the-financial-impact-of-working-after-retirement/" target="_blank" rel="noreferrer noopener">boards of cooperative services (BOCES</a>) to the Legislature.</p>



<h4 class="wp-block-heading"><strong>Estimating the financial impact</strong></h4>



<p>Calculating how much it would cost to expand working after retirement provisions is difficult because it ultimately depends on how many workers take advantage of the proposed new rules.</p>



<p>As it’s currently written, <a href="https://leg.colorado.gov/bills/sb24-099" target="_blank" rel="noreferrer noopener">SB24-099</a> would add superintendents and principals to the list of qualified positions under “critical shortage” provisions. <a href="https://leg.colorado.gov/bills/hb24-1044" target="_blank" rel="noreferrer noopener">HB24-1044</a> would allow larger school districts to hire more retirees under the 140-day/916-hour rules. To estimate the bills’ cost, PERA’s actuaries modeled several scenarios in which different percentages of eligible workers retire early and return to work. The models showed that if eligible employees retired two years early, it could result in millions of dollars in added costs and potentially extend the amount of time it would take PERA to reach full funding.</p>



<p>The PERA Board of Trustees is committed to protecting the integrity of PERA’s trust funds for the benefit of all members. It has taken an “amend” position on the above bills, encouraging lawmakers to include provisions that would offset the potentially negative effects on PERA’s funding.</p>



<p><em>PERA On The Issues</em> will continue to track these and other PERA-related bills throughout the session and <a href="https://peraontheissues.com/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">post any updates here</a>.</p>


Understanding the Financial Impact of Working After Retirement


<p>The Colorado PERA Board of Trustees met on Friday, January 19 for its first regular meeting of 2024.</p>



<p>The agenda included important topics of discussion and various action items. Some of the Board’s major actions at the meeting are summarized below.</p>



<h4 class="wp-block-heading"><strong>Board appointment and Vice Chair election</strong></h4>



<p>Current Board Vice Chair Suzanne Kubec is retiring, and therefore vacating her seat on the PERA Board. In accordance with Board policy, Chair Marcus Pennell moved to fill that seat with the candidate from the State Division’s previous Board election who received the second-highest number of votes. As a result, Ashley M. Smith, who served on the Board from 2021 to 2022, was appointed to fill that seat until the next election in 2025.</p>



<p>Additionally, the Board held an election to replace Kubec as Vice Chair, and the Trustees elected Taylor McLemore to fill that role. McLemore has been on the Board since 2021 and currently serves as chair of the Ad Hoc Committee overseeing the search for PERA’s next Executive Director.</p>



<blockquote class="wp-block-quote">
<p><strong>REMINDER:</strong> <a href="https://peraontheissues.com/four-seats-on-pera-board-up-for-election-in-2024/" target="_blank" rel="noreferrer noopener">Four Seats on PERA Board Up For Election in 2024</a></p>
</blockquote>



<h4 class="wp-block-heading"><strong>Executive Director search update</strong></h4>



<p>McLemore provided an update on the Ad Hoc Committee’s Executive Director search, stating that more than 200 people have applied for the job. The committee is working with an outside search firm to screen applicants and identify candidates of high interest who will receive in-person interviews in February. The committee will then provide a list of top candidates to the full Board, which will be responsible for selecting a finalist.</p>



<h4 class="wp-block-heading"><strong>Legislative update</strong></h4>



<p>The 2024 legislative session is underway, and lawmakers have so far introduced <a href="https://peraontheissues.com/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">three PERA-related bills</a>. Interim Executive Director/Chief Investment Officer Amy C. McGarrity and Public and Government Affairs Manager Michael Steppat updated the Trustees on the bills:</p>



<ul>
<li><strong>HB24-1044:</strong> Would expand the number of PERA retirees who can work for school districts without reductions in their benefits.</li>



<li><strong>SB24-013:</strong> Would increase district attorney and assistant district attorney pay&nbsp;and allow county boards to require assistant DAs to become a member of the PERA Defined Benefit Plan.</li>



<li><strong>SB24-044:</strong> Would create a temporary tax credit for qualifying PERA retirees in tax years 2024 and 2025.</li>
</ul>



<p>The Board generally takes a position on a bill if it has a financial impact on PERA, and Trustees voted to take an “amend” position on HB24-1044. That means the Board is looking for lawmakers to amend the bill to include a way to offset potential negative impacts on PERA’s funding.</p>



<blockquote class="wp-block-quote">
<p><strong>READ MORE:</strong> <a href="https://peraontheissues.com/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">2024 Proposed Legislation Status</a></p>
</blockquote>



<h4 class="wp-block-heading"><strong>Asset/liability study update</strong></h4>



<p>In September, the Board began the process of examining PERA’s strategic asset allocation through what’s known as an <a href="https://peraontheissues.com/asset-liability-study-a-guide-to-building-a-strategic-portfolio/" target="_blank" rel="noreferrer noopener">asset/liability study</a>. The Board’s consultants, Aon, discussed the work that’s been completed so far, including meeting with PERA’s investment staff and modeling future funding scenarios based on the existing asset makeup.</p>



<p>That work will continue over the next several months, with more analysis and modeling to determine if different asset allocations or levels of diversification would better help PERA meet its goals.</p>



<h4 class="wp-block-heading"><strong>Future meetings</strong></h4>



<p>The Board has four more regular meetings scheduled for 2024:</p>



<ul>
<li>March 15</li>



<li>June 21</li>



<li>September 20</li>



<li>November 15</li>
</ul>



<p>In addition, the Ad Hoc Committee will be meeting to interview Executive Director candidates in February. All meetings are streamed live and include time for public comment.</p>



<p>For more information, visit <a href="https://www.copera.org/about/board-and-leadership" target="_blank" rel="noreferrer noopener">copera.org/board-of-trustees</a>.</p>



<p></p>


Recap of PERA Board’s January 2024 Meeting


<p><em>The 2024 legislative session commenced January 10 and ended on May 8.</em></p>



<p><em>Below you’ll find summaries of proposed legislation affecting Colorado PERA. The status of each bill will be updated regularly.</em></p>



<p class="has-text-align-right">Last updated: June 10, 2024</p>



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



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/hb24-1044" target="_blank" rel="noreferrer noopener">HB24-1044</a></h2>



<h3 class="wp-block-heading">Additional PERA Service Retirees for Schools</h3>



<p><strong>Summary: </strong>Under current law, employers in the School and Denver Public Schools (DPS) divisions can designate up to 10 retirees who are permitted to work up to 140 days or 916 hours per calendar year without reductions to their PERA benefits. This bill would allow districts with more than 10,000 students to designate an additional retiree for each thousand students over 10,000.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/eliza-hamrick" target="_blank" rel="noreferrer noopener">Rep. Eliza Hamrick</a>, <a href="https://leg.colorado.gov/legislators/rick-taggart" target="_blank" rel="noreferrer noopener">Rep. Rick Taggart</a>, <a href="https://leg.colorado.gov/legislators/chris-hansen" target="_blank" rel="noreferrer noopener">Sen. Chris Hansen</a></p>



<p><strong>Status:</strong> Passed; signed into law April 19</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb24-013" target="_blank" rel="noreferrer noopener">SB24-013</a></h2>



<h3 class="wp-block-heading">District Attorneys&#8217; Salaries</h3>



<p><strong>Summary: </strong>Would increase the minimum compensation for district attorneys and assistant district attorneys, as well as allow the board(s) of county commissioners of counties that make up a judicial district, in consultation with the district attorney, to make a one-time irrevocable election to require an assistant district attorney to become a member of the PERA Defined Benefit Plan.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/bob-gardner" target="_blank" rel="noreferrer noopener">Sen. Bob Gardner</a>, <a href="https://leg.colorado.gov/legislators/nick-hinrichsen" target="_blank" rel="noreferrer noopener">Sen. Nick Hinrichsen</a>, <a href="https://leg.colorado.gov/legislators/barbara-mclachlan" target="_blank" rel="noreferrer noopener">Rep. Barbara McLachlan</a></p>



<p><strong>Status:</strong> Passed; the bill was amended to remove the portion pertaining to participation in the PERA&nbsp;Defined Benefit&nbsp;Plan.</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb24-044" target="_blank" rel="noreferrer noopener">SB24-044</a></h2>



<h3 class="wp-block-heading">Public Employees&#8217; Retirement Association Retiree Refundable Income Tax Credit</h3>



<p><strong>Summary:</strong> Would create a temporary tax credit of $700 for qualified PERA retirees in tax years 2024 and 2025. To qualify, a retiree would have to be 65 or older at the end of the tax year during which the credit is claimed, and have annual gross income of no more than $38,000 for single tax filers or $76,000 for joint filers.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/chris-kolker" target="_blank" rel="noreferrer noopener">Sen. Chris Kolker</a>, <a href="https://leg.colorado.gov/legislators/chris-hansen" target="_blank" rel="noreferrer noopener">Sen. Chris Hansen</a>, <a href="https://leg.colorado.gov/legislators/eliza-hamrick" target="_blank" rel="noreferrer noopener">Rep. Eliza Hamrick</a>, <a href="https://leg.colorado.gov/legislators/cathy-kipp" target="_blank" rel="noreferrer noopener">Rep. Cathy Kipp</a></p>



<p><strong>Status:</strong> Did not pass House Appropriations Committee</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb24-099" target="_blank" rel="noreferrer noopener">SB24-099</a></h2>



<h3 class="wp-block-heading">Public Employees&#8217; Retirement Association Employment after Retirement for Rural Schools</h3>



<p><strong>Summary:</strong> Under current law, rural school districts can declare a critical shortage of qualified teachers, school bus drivers, food service workers, school nurses, or paraprofessionals and hire PERA retirees to fill those positions without having their retirement benefits reduced. This bill adds principals and superintendents to the list of qualified positions.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/rod-pelton" target="_blank" rel="noreferrer noopener">Sen. Rod Pelton</a>, <a href="https://leg.colorado.gov/legislators/janice-marchman" target="_blank" rel="noreferrer noopener">Sen. Janice Marchman</a>, <a href="https://leg.colorado.gov/legislators/ty-winter" target="_blank" rel="noreferrer noopener">Rep. Ty Winter</a>, <a href="https://leg.colorado.gov/legislators/barbara-mclachlan" target="_blank" rel="noreferrer noopener">Rep. Barbara McLachlan</a></p>



<p><strong>Status:</strong> Passed; signed into law April 11</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/hb24-1159" target="_blank" rel="noreferrer noopener">HB24-1159</a></h2>



<h3 class="wp-block-heading">Contracted Private Employee Exclusion from Public Employees&#8217; Retirement Association</h3>



<p><strong>Summary:</strong> Imposes a moratorium until June 30, 2025, during which PERA is prohibited from including in its membership an employee of a third-party private entity that contracts with a public entity to perform services.</p>



<p><strong>Sponsors: </strong><a href="https://leg.colorado.gov/legislators/don-wilson" target="_blank" rel="noreferrer noopener">Rep. Don Wilson</a></p>



<p><strong>Status: </strong>Postponed indefinitely</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/hb24-1169" target="_blank" rel="noreferrer noopener">HB24-1169</a></h2>



<h3 class="wp-block-heading">Repeal Divest from Companies with Israel Prohibitions Law</h3>



<p><strong>Summary:</strong> In 2016, the general assembly enacted HB16-1284, which requires PERA to periodically identify all companies that have economic prohibitions against Israel and to divest all direct holdings of those companies from its assets and prohibits PERA from acquiring new direct holdings in any of those companies. This bill would repeal the statutory provisions enacted in HB16-1284.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/elisabeth-epps" target="_blank" rel="noreferrer noopener">Rep. Elisabeth Epps</a></p>



<p><strong>Status:</strong> Postponed indefinitely</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb24-169" target="_blank" rel="noreferrer noopener">SB24-169</a></h2>



<h3 class="wp-block-heading">State Firefighter Public Employees’ Retirement Association Job Classification</h3>



<p><strong>Summary:</strong>&nbsp;Would expand the definition of State Trooper for the purpose of PERA benefits to include duly sworn employees of the Division of Fire Prevention and Control in the Department of Public Safety whose duties include structural or wildfire management, wildfire response, live-fire training, or wildfire leadership, as determined by the executive director of the department.</p>



<p><strong>Sponsor:&nbsp;</strong><a href="https://leg.colorado.gov/legislators/tony-exum">Sen. Tony Exum</a></p>



<p><strong>Status:</strong>&nbsp;Passed; signed into law May 24</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb24-186">SB24-18</a><a href="https://leg.colorado.gov/bills/sb24-186" target="_blank" rel="noreferrer noopener">6</a></h2>



<h3 class="wp-block-heading">County Coroner &amp; Deputy Coroner Public Employees’ Retirement Association Eligibility</h3>



<p><strong>Summary:</strong>&nbsp;Would expand the definition of State Trooper for the purpose of PERA benefits to include county coroners and deputy coroners.</p>



<p><strong>Sponsor:</strong>&nbsp;<a href="https://leg.colorado.gov/legislators/janice-marchman">Sen. Janice Marchman</a></p>



<p><strong>Status:</strong>&nbsp;Passed; signed into law June 5</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/hb24-1427" target="_blank" rel="noreferrer noopener">HB24-1427</a></h2>



<h3 class="wp-block-heading">Public Employees’ Retirement Association Study Conducted by an Actuarial Firm</h3>



<p><strong>Summary:</strong>&nbsp;Requires the state auditor, in cooperation with PERA, to contract an independent actuarial firm experienced with public pension plans to conduct a comprehensive study comparing the cost and effectiveness of the current&nbsp;hybrid&nbsp;Defined Benefit&nbsp;plan design to alternative plan designs, as well as providing an analysis of certain aspects of PERA’s current&nbsp;Defined Benefit&nbsp;and&nbsp;defined contribution&nbsp;plans.</p>



<p><strong>Sponsors:</strong>&nbsp;<a href="https://leg.colorado.gov/legislators/shannon-bird" target="_blank" rel="noreferrer noopener">Rep. Shannon Bird</a>,&nbsp;<a href="https://leg.colorado.gov/legislators/rick-taggart" target="_blank" rel="noreferrer noopener">Rep. Rick Taggart</a>,&nbsp;<a href="https://leg.colorado.gov/legislators/jeff-bridges" target="_blank" rel="noreferrer noopener">Sen. Jeff Bridges</a>,&nbsp;<a href="https://leg.colorado.gov/legislators/rachel-zenzinger" target="_blank" rel="noreferrer noopener">Sen. Rachel Zenzinger</a></p>



<p><strong>Status:&nbsp;</strong>Passed; signed into law April 18</p>


2024 Proposed Legislation Status


<p><em><a href="https://peraontheissues.com/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">Click here</a> for the latest information on proposed PERA-related legislation.</em></p>



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<p>The second regular session of the 74th Colorado General Assembly got underway on January 10, and lawmakers will spend the following 120 days introducing and debating hundreds of bills that could alter state law.</p>



<p>Colorado PERA’s representative at the State Capitol, Public and Government Affairs Manager Michael Steppat, helps make sure legislators understand how PERA works and how legislation affects PERA and its members. We caught up with Steppat to discuss the upcoming session.</p>



<h5 class="wp-block-heading"><strong>How and why does PERA engage in the legislative process?</strong></h5>



<p>While the PERA Board of Trustees is responsible for administering benefits and overseeing PERA’s investments, the General Assembly is responsible for many other aspects of PERA, such as contribution rates, benefit levels, and the amount of the annual benefit increases that retirees receive.</p>



<p>During and between sessions, PERA staff provide regular updates to the Legislature so lawmakers can make informed decisions on issues that affect our members.</p>



<h5 class="wp-block-heading"><strong>What are some of the issues we expect to come up this session?</strong></h5>



<p>Last year’s session was an interesting one that included several legislators stepping down. As a result, legislative leaders from both parties have expressed a desire for more decorum heading in to the 2024 legislative session.</p>



<p>The Democratic majority remains in place at the Capitol, and there aren’t any statewide offices up for election this year. It’s likely the new session will see bills continuing to address the rise in property taxes across the state, which was addressed temporarily during the special session a couple months ago, but work continues on finding a long-term solution. Additionally, included in the Governor’s budget proposal is a request to buy down the state’s budget stabilization factor, which was created during the Great Recession and diverted money from Colorado’s public schools. This would be a huge investment in K-12 funding and should receive bipartisan support. Some of the other priority issues relate to others that lawmakers have tackled in recent years, such as affordable housing and the increasing cost of health care.</p>



<p>PERA doesn’t typically garner the same level of attention as other public policy issues during legislative sessions, but we already know about <a href="https://peraontheissues.com/pension-review-commission-eyes-two-bills-for-2024-legislative-session/" target="_blank" rel="noreferrer noopener">two bills that lawmakers intend to introduce</a> this year. These two bills are among 54 total which lawmakers have already approved for introduction after being recommended by legislative interim committees that have met since the 2023 legislative session concluded. One of those bills would expand the number of PERA retirees who can work for school districts without reductions in their benefits, and the other would provide a temporary tax credit to PERA retirees. The latter is an attempt from lawmakers to address concerns from folks regarding a larger annual benefit increase, but doing so in a way that does not negatively affect PERA’s funding status.</p>



<blockquote class="wp-block-quote">
<p><strong>READ MORE:</strong> <a href="https://peraontheissues.com/pension-review-commission-eyes-two-bills-for-2024-legislative-session/" target="_blank" rel="noreferrer noopener">Pension Review Commission Eyes Two Bills for 2024 Legislative Session</a></p>
</blockquote>



<h5 class="wp-block-heading"><strong>Speaking of funding, do you have a sense of what the state’s next budget looks like?</strong></h5>



<p>Gov. Jared Polis released his budget proposal in November, and while the Legislature ultimately decides the state budget, it’s an important first step in the process. His proposal calls for increases in education funding and pay raises for teachers, among other things. Lawmakers will release their own draft of the budget, known as the Long Bill, in March. It’s important to note the state budget does not directly affect PERA’s funding, but it does affect funding for many of PERA’s employers.</p>



<h5 class="wp-block-heading"><strong>Is there anything happening at the federal level that could affect politics here in Colorado?</strong></h5>



<p>2024 is a presidential election year, and this time around, Colorado will be one of 14 states holding primaries on Super Tuesday in March. That means Colorado voters will have their voices heard earlier in the campaign process than in years past, and it’s likely candidates will make stops in our state.</p>



<p>In addition, the 2023-2024 Congress continues, and lawmakers <a href="https://peraontheissues.com/an-update-on-2023-wep-gpo-legislation/" target="_blank" rel="noreferrer noopener">have introduced several bills</a> that would modify or repeal Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). We often hear from PERA members about these provisions and their effects on Social Security benefits, and we will continue to monitor and update our stakeholders if Congress decides to take action on those bills.</p>



<blockquote class="wp-block-quote">
<p><strong>READ MORE: </strong><a href="https://peraontheissues.com/an-update-on-2023-wep-gpo-legislation/" target="_blank" rel="noreferrer noopener">An Update on 2023 WEP/GPO Legislation</a></p>
</blockquote>



<h5 class="wp-block-heading"><strong>What’s the best way for people to get involved in the legislative process?</strong></h5>



<p>I always tell people the most important thing they can do is contact their&nbsp;<a href="https://leg.colorado.gov/legislators" target="_blank" rel="noreferrer noopener">legislators</a>&nbsp;about issues that are important to them. In addition, the General Assembly&nbsp;<a href="https://leg.colorado.gov/" target="_blank" rel="noreferrer noopener">website</a>&nbsp;has lots of great information. You can listen to&nbsp;<a href="https://leg.colorado.gov/content/committees" target="_blank" rel="noreferrer noopener">committee meetings</a>, view&nbsp;calendars, review the&nbsp;<a href="https://leg.colorado.gov/bills" target="_blank" rel="noreferrer noopener">status of a bill</a>, and sign up to testify at committee meetings.</p>



<p>And of course<em>&nbsp;the PERA On The Issues</em>&nbsp;biweekly&nbsp;<a href="https://www.copera.org/ambassador-program" target="_blank" rel="noreferrer noopener">newsletter</a>&nbsp;will have up-to-date information on any legislation that affects PERA. We also encourage people to sign up for the PERA Ambassadors newsletter <a href="https://www.copera.org/ambassador-program">here</a>.</p>


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