
<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>State lawmakers convened at the Capitol Building in Denver on January 8 to begin the 75<sup>th</sup> Colorado General Assembly. Over the course of 120 days, legislators will introduce and debate hundreds of bills that could become law.</p>



<p>As in past legislative sessions, a handful of those bills will be related to PERA and its members. We caught up with PERA Director of Public &amp; Government Affairs Michael Steppat ahead of the new session to get his perspective on what to expect.</p>



<h2 style="color:#00793a;" class="wp-block-heading has-dartmouth-green-color has-text-color has-medium-font-size">What role does the State Legislature play in PERA?</h2>



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



<p>It’s important to make sure lawmakers understand how PERA works and how legislation can potentially affect our funding progress. The majority of time spent in the weeks leading up to the start of the new session involves meeting with legislators and other stakeholders on PERA-related issues and potential legislation for the upcoming session.</p>



<h2 style="color:#00793a;" class="wp-block-heading has-dartmouth-green-color has-text-color has-medium-font-size">How does the recent election impact PERA?</h2>



<p>Due to term limits for state legislators in Colorado and just natural turnover, the previous election cycle and futures cycles include many individuals being elected for the very first time. This means it is an ongoing process to educate lawmakers on PERA-related issues. As is the case with most public policy issues, there are very few who are experts right out of the gate in every aspect of an issue and this is especially true with a state retirement system. There will certainly be incoming lawmakers with experience in finance or investments or actuarial science, but it is not common for someone to have experience in all aspects of a pension plan like PERA.</p>



<p>A primary focus, both year-round and following a recent election, is to meet with and educate lawmakers. To get a good sense of how quickly the state legislature turns over, just look at how many legislators are still part of the General Assembly who voted on Senate Bill 200 in 2018—it’s fewer than a dozen out of 100 total legislators.</p>



<h2 style="color:#00793a;" class="wp-block-heading has-dartmouth-green-color has-text-color has-medium-font-size">We already have an idea of some of the PERA-related legislative issues lawmakers will be looking at this year. Can you tell us more about that?</h2>



<p>Legislative work doesn’t only happen while the General Assembly is in session—throughout the summer and fall, various “interim” (the period when the legislature is not in regular session) committees meet and begin work on studying issues and drafting bills for the next session. This past September, the Pension Review Commission drafted two bills related to PERA.</p>



<p>The first, known as Bill A (until it is given a bill number after being officially introduced), is identical to a <a href="https://leg.colorado.gov/bills/sb24-044" target="_blank" rel="noreferrer noopener">bill from last session</a> that would provide a temporary tax credit for PERA retirees to reduce the impact of inflation. The second, Bill B, would codify into state law certain reporting practices the PERA Board already performs on a regular basis and would modify the cadence of those reports.</p>



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



<p>In addition, there’s been discussion at the Capitol regarding a potential <a href="https://www.axios.com/local/denver/2024/11/13/pinnacol-privatize-polis-colorado" target="_blank" rel="noreferrer noopener" class="broken_link">”conversion” of the State’s share of Pinnacol Assurance</a>, which is currently the State’s workers’ compensation insurer, after the proposal was included as part of the Governor’s budget request to the General Assembly last month. The proposed conversion has two main aspects related to PERA that were both included in the budget request. The first is that if Pinnacol becomes a private entity, then it cannot continue to be part of PERA both for current and future employees, and it would have to disaffiliate from PERA. The second involves using the proceeds from the sale of Pinnacol to offset the State’s $225m ‘direct distribution’ payment to PERA in future years.</p>



<h2 style="color:#00793a;" class="wp-block-heading has-dartmouth-green-color has-text-color has-medium-font-size">Aside from PERA-related topics, what are some other legislative priorities lawmakers will likely be pursuing this year?</h2>



<p>A top priority for the Legislature this session will be <a href="https://www.axios.com/local/denver/2024/12/02/colorado-budget-writers-warn-cuts-2025" target="_blank" rel="noreferrer noopener" class="broken_link">coming up with a balanced budget</a>. When Gov. Jared Polis submitted his budget proposal to the Joint Budget Committee, it included nearly $700 million in cuts to fill a projected funding gap. The Legislature ultimately develops the State budget, and they may have different ideas for how to make up the shortage, so we’ll be closely monitoring as that process plays out to see if there are implications to PERA.</p>



<p>It is important to note PERA benefits come out of the trust funds reserved for paying those benefits, which are funded through contributions from employees and their employers as well as investment returns.</p>



<h2 style="color:#00793a;" class="wp-block-heading has-dartmouth-green-color has-text-color has-medium-font-size">At the federal level, a new Congress is just getting underway. What can we expect in Washington, DC?</h2>



<p>The beginning of the year will be busy for Congress. The House and Senate convened on January 3, and President Trump will be sworn in for his second term on January 20. Then, Congress will begin confirmation hearings for Trump’s various nominees. With Republicans controlling the White House and both chambers of Congress, we can expect to see the party try to push through many of its legislative priorities on issues such as immigration, trade, and regulation. One policy issue at the federal level which does often impact PERA more than many others is changes to healthcare policy and we will continue to monitor what, if any, proposals come forward in that respect.</p>



<h2 style="color:#00793a;" class="wp-block-heading has-dartmouth-green-color has-text-color has-medium-font-size">In the final days of the last Congress, legislators took the historic step of approving a bill to repeal Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), and President Biden has since signed the bill into law. What’s the latest on that issue?</h2>



<p>Congress had been trying to repeal or modify WEP and GPO for decades without success, but the political environment was just right to make it happen at the end of 2024. We were encouraged to see legislators take action to improve the retirement security of public employees and we’ll be watching closely to see how the repeal of those two federal provisions unfolds.</p>



<p>There’s still a lot we don’t know at this point—it’s unclear what the implementation of the Social Security Fairness Act will look like, and the Social Security Administration has yet to release any details. As written the bill should apply to Social Security benefits paid in 2024, so some retirees may be owed additional benefit payments, but we don’t yet know when that might happen.</p>



<h2 style="color:#00793a;" class="wp-block-heading has-dartmouth-green-color has-text-color has-medium-font-size">What do you recommend to anyone who wants to get involved in the legislative process?</h2>



<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 the biweekly <a href="https://www.copera.org/pera-on-the-issues/subscribe" target="_blank" rel="noreferrer noopener"><em>PERA On The Issues</em>&nbsp;newsletter</a> will have up-to-date information on any legislation that affects PERA.</p>


What to Expect from the 2025 Legislative Session


<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size"><a href="https://www.npr.org/sections/shots-health-news/2024/08/15/nx-s1-5075659/medicare-negotiated-drug-prices-for-the-first-time-heres-what-it-got" target="_blank" rel="noreferrer noopener">Medicare Negotiated Drug Prices for the First Time. Here’s What It Got. | NPR</a></h2>



<p>Medicare has revealed the results of its first-ever negotiated drug prices. Officials have been negotiating with pharmaceutical companies for months, and that process just wrapped up, resulting in discounts on popular drugs for diabetes, cancer, arthritis, and other ailments. The new lower prices for the first batch of 10 prescription medications will take effect in 2026.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size"><a href="https://coloradosun.com/2024/08/15/colorado-special-session-property-taxes-election-2024/" target="_blank" rel="noreferrer noopener">Colorado Governor Calls Special Session on Property Taxes to Avoid Ballot Measure Fight in November</a></h2>



<p>Gov. Jared Polis called for a special legislative session to tackle the issue of property taxes in Colorado. Various advocacy groups had been calling on the legislature to take action and pass a bill to lower taxes rather than allow two tax-related initiatives to appear on the November ballot.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size"><a href="https://www.reuters.com/markets/rates-bonds/size-looming-fed-rate-cuts-may-hinge-job-market-2024-08-02/" target="_blank" rel="noreferrer noopener">Fed Rate Cuts Loom Large as US Job Market Slows Sharply | Reuters</a></h2>



<p>Prior to early August’s monthly jobs report, many analysts said the Federal Reserve would be likely to start lowering interest rates in September. That jobs report showed a noticeable increase in unemployment, signaling a weakening job market and all but guaranteeing a rate cut in the very near future.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size"><a href="https://www.plansponsor.com/milliman-reveals-health-care-costs-for-65-year-olds-retiring-in-2024/" target="_blank" rel="noreferrer noopener">Milliman Reveals Health Care Costs for 65-Year-Olds Retiring in 2024 | PLANSPONSOR</a></h2>



<p>A new report highlights the rising cost of retiree health care. According to the Milliman Retiree Health Cost Index, the amount of savings needed to cover health care costs for a couple retiring in 2024 has increased by $7,000 in the past year if that couple is enrolled in original Medicare with supplemental coverage. On the other hand, retirees with Medicare Advantage plans need less money saved up in order to pay for care.</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: Medicare Wraps Up Drug Price Negotiations


<p><em>The 2023 Colorado General Assembly commenced January 9 and will continue for 120 days.</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 7, 2023</p>



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<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb23-056" target="_blank" rel="noreferrer noopener">SB23-056</a></h2>



<h3 class="wp-block-heading">Compensatory Direct Distribution To PERA</h3>



<p><strong>Summary:</strong> Requires the state to make an additional payment to PERA in an amount equal to $35,050,000 that, along with the payment required under <a href="https://peraontheissues.com/colorado-lawmakers-pass-bill-making-up-225m-payment-to-pera/" target="_blank" rel="noreferrer noopener">HB22-1029</a>, is meant to fully recompense PERA for the cancellation of a previously scheduled July 1, 2020, direct distribution of $225 million. The source of funds identified for this payment is the balance of the <a href="https://peraontheissues.com/2021-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">PERA payment cash fund</a>, with any remaining amount coming from the state&#8217;s general fund.</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/shannon-bird" target="_blank" rel="noreferrer noopener">Rep. Shannon Bird</a></p>



<p><strong>Status: </strong>Passed; Gov. Jared Polis signed into law on June 2.</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb23-016" target="_blank" rel="noreferrer noopener">SB23-016</a></h2>



<h3 class="wp-block-heading">Greenhouse Gas Emission Reduction Measures</h3>



<p><strong>Summary:</strong> Would require the PERA Board to adopt a proxy voting policy that ensures any voting decisions align with the state’s greenhouse gas emission reduction goals, as well as require PERA to include in its annual <a href="https://www.copera.org/investment-stewardship"><em>Investment Stewardship Report</em></a> a description of climate-related investment risks, impacts and strategies. </p>



<p><strong>Sponsors:</strong> <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/karen-mccormick" target="_blank" rel="noreferrer noopener">Rep. Karen McCormick</a>, <a href="https://leg.colorado.gov/legislators/emily-sirota" target="_blank" rel="noreferrer noopener">Rep. Emily Sirota</a></p>



<p><strong>Status:</strong> The Senate Finance Committee amended the bill Feb. 21 to remove the section pertaining to PERA&#8217;s proxy voting policy. Gov. Jared Polis signed the bill into law on May 11.</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/hb23-1092" target="_blank" rel="noreferrer noopener">HB23-1092</a></h2>



<h3 class="wp-block-heading">Limitating Use of State Money</h3>



<p><strong>Summary:</strong> Would require PERA staff to make investment decisions solely on financial factors and would prohibit consideration of social, political, or ideological interests. The PERA Board opposes efforts to restrict PERA’s investment options or compel PERA to invest in a way that prioritizes a policy outcome over fiduciary duties.</p>



<p><strong>Sponsor:</strong> <a href="https://leg.colorado.gov/legislators/rod-bockenfeld" target="_blank" rel="noreferrer noopener">Rep. Rod Bockenfeld</a></p>



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



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb23-104" target="_blank" rel="noreferrer noopener">SB23-104</a></h2>



<h3 class="wp-block-heading">Denver Public Schools Division Employer Contribution Reduction</h3>



<p><strong>Summary:</strong> Would reduce the employer contribution rate of the Denver Public Schools Division of PERA from 10.4% to 7.15% of salary. The PERA Board opposes reductions in contributions while PERA has unfunded liabilities.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/james-coleman" target="_blank" rel="noreferrer noopener">Sen. James Coleman</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/jennifer-bacon" target="_blank" rel="noreferrer noopener">Rep. Jennifer Bacon</a></p>



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



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/hb23-1144" target="_blank" rel="noreferrer noopener">HB23-1144</a></h2>



<h3 class="wp-block-heading">Public Employees&#8217; Retirement Association Defined Benefit Plan Payments To Ex-Spouse</h3>



<p><strong>Summary: </strong>This bill seeks to make changes in state law regarding the division of PERA Defined Benefit Plan benefits in legal separation or dissolution of marriage or civil union actions. Parties to these actions in Colorado may enter into an agreement allocating a portion of the PERA Defined Benefit Plan benefits to the retiree’s former spouse.&nbsp; The bill would terminate benefits to the former spouse of a PERA retiree if the former spouse remarries.</p>



<p><strong>Sponsor:</strong> <a href="https://leg.colorado.gov/legislators/regina-english" target="_blank" rel="noreferrer noopener">Rep. Regina English</a></p>



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



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/hb23-1176" target="_blank" rel="noreferrer noopener">HB23-1176</a></h2>



<h3 class="wp-block-heading">PERA Defined Contribution Plan School Personnel</h3>



<p><strong>Summary:</strong> Would create a new &#8220;flexible defined contribution plan&#8221; for new members of PERA&#8217;s School and Denver Public Schools divisions. The plan would be separate from the existing PERA Defined Contribution (DC) Plan, which is available to State and Local Government division employees, and would offer members the ability to elect their contribution rates. The PERA Board opposes the bill as introduced because of the costs associated with the proposal and the inability for PERA to administer such a plan as written due to its failure to meet federal rules for governmental plans.</p>



<p><strong>Sponsor:</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/sb23-163" target="_blank" rel="noreferrer noopener">SB23-163</a></h2>



<h3 class="wp-block-heading">Colorado Parks and Wildlife Officers Classified As State Troopers</h3>



<p><strong>Summary:</strong> Would reclassify wildlife officers and parks and recreation officers employed by Colorado Parks and Wildlife as safety officers for the purpose of determining their PERA benefits.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/perry-will" target="_blank" rel="noreferrer noopener">Sen. Perry Will</a>, <a href="https://leg.colorado.gov/legislators/iman-jodeh" target="_blank" rel="noreferrer noopener">Rep. Iman Jodeh</a>, <a href="https://leg.colorado.gov/legislators/mike-lynch" target="_blank" rel="noreferrer noopener">Rep. Mike Lynch</a></p>



<p><strong>Status:</strong> Passed; Gov. Jared Polis signed into law on June 6.</p>


2023 Proposed Legislation Status


<p>When Colorado’s lawmakers convene at the State Capitol on Jan. 12, they’ll begin the 120-day process of proposing, debating, and deciding on bills that could change state law. With only about four months to decide on hundreds of bills, it’s a busy, fast-paced time at the Capitol.</p>



<p>It’s also a busy time for Michael Steppat, Colorado PERA’s Public &amp; Government Affairs Manager. He tracks legislation affecting PERA, maintains relationships with legislators, oversees lobbying, and more.</p>



<p>PERA On The Issues sat down with Steppat to get his perspective on the upcoming legislative session and the issues lawmakers might decide to tackle this year.</p>



<h2 class="wp-block-heading has-medium-font-size">Can you explain your role and the work you do on behalf of PERA and its stakeholders?</h2>


<div class="wp-block-image">
<figure class="alignright size-full is-resized"><img decoding="async" loading="lazy" src="https://content.copera.org/what-to-expect-in-colorados-2022-legislative-session/" alt="" class="wp-image-2734" width="225" height="281"/><figcaption class="wp-element-caption">PERA Public &amp; Government Affairs Manager Michael Steppat</figcaption></figure></div>


<p>The Colorado General Assembly is responsible for many aspects of PERA, including contribution rates and benefit levels, while the Board is responsible for overseeing PERA’s investments and the administration of benefits. PERA staff provide regular updates to the legislature so lawmakers can make informed decisions on issues that affect our members.</p>



<p>I represent PERA at the Capitol. I monitor and report on legislative activity, build and maintain relationships with legislators and other stakeholders, and oversee lobbying efforts. I also serve as the liaison for legislative committee staff.</p>



<p>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 — on the impact of proposed legislation to PERA’s active members and retirees.</p>



<h2 class="wp-block-heading has-medium-font-size">Last year’s legislative session was an unusual one due to the COVID-19 pandemic. Will lawmakers be returning to a more “normal” session this year?</h2>



<p>Last year, the General Assembly gaveled in to begin the session in January and then immediately hit “pause” on the session for several months due to COVID-19. We don’t expect the same thing to happen this year — all indications are that lawmakers will convene and begin the session as usual.</p>



<h2 class="wp-block-heading has-medium-font-size">We know lawmakers plan to introduce a bill to make up the state’s <a href="https://peraontheissues.com/legislative-committee-seeks-to-make-up-missed-225m-payment-to-pera/" target="_blank" rel="noreferrer noopener"><strong>missed $225M payment to PERA</strong></a> from 2020. What other issues do you anticipate seeing?</h2>



<p>It’s possible we’ll see legislation pertaining to <a href="https://www.copera.org/retirees/working-after-retirement" target="_blank" rel="noreferrer noopener">working after retirement</a> laws, especially given the pandemic-related shortages of qualified teachers and other staff in rural school districts. There will likely be a fossil fuel <a href="https://www.copera.org/investments/divestment" target="_blank" rel="noreferrer noopener">divestment</a>-related bill, which was introduced last session as well. &nbsp;</p>



<p>There are more than five hundred bills introduced every session on a variety of issues, but the bills we can expect to be at the top of most legislators’ to-do lists next year include many of the usual hot topics like the state budget, health care and education.</p>



<h2 class="wp-block-heading has-medium-font-size">Our members and retirees often ask if anything is being done about the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). Is there anything the state legislature can do about those provisions?</h2>



<p>The WEP and GPO are two separate provisions in federal law that are specific to Social Security. It would require Congress to pass legislation for there to be any changes to those provisions. Last year, two bills were introduced that would repeal or change the WEP and GPO, but there has been no further action on either from lawmakers in DC. The efforts to drive this change over the past few years have, unfortunately, proved fruitless and the cost of such proposals is often mentioned as the reason. It is important for members and retirees to contact their representative or senator to have their voice heard on federal issues like this one.</p>



<h2 class="wp-block-heading has-medium-font-size">Does PERA take a position on proposed legislation?</h2>



<p>Yes, the Board of Trustees determines PERA’s legislative agenda and positions on bills in accordance with Board policies.</p>



<h2 class="wp-block-heading has-medium-font-size">How can PERA members and retirees stay up-to-date and get involved in the process?</h2>



<p><em>PERA On The Issues</em> is a good place to start — our biweekly <a href="https://www.copera.org/what-to-expect-in-colorados-2022-legislative-session" target="_blank" rel="noreferrer noopener" class="broken_link">newsletter</a> will be up-to-date on any legislation that affects PERA. We also encourage people to follow the <a href="https://facebook.com/coloradoretirementactioncenter" target="_blank" rel="noreferrer noopener" class="broken_link">Colorado Retirement Action Center on Facebook</a>.</p>



<p>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>Most importantly, we encourage PERA members and retirees to 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.</p>


What to Expect in Colorado’s 2022 Legislative Session


<p><em>Editor’s note: On Monday, Nov. 15, the Legislative Council voted to approve the bill, clearing the way for it to be introduced during the regular legislative session, which is set to begin on Jan. 12. PERA On The Issues will continue to monitor the bill and will provide updates regarding its status during the session.</em></p>



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<p>The Colorado General Assembly’s Pension Review Commission on Tuesday voted to recommend a bill for the 2022 legislative session that would make up the legislature’s missed $225 million direct distribution payment to PERA from July 2020.</p>



<p>Lawmakers <a href="https://peraontheissues.com/pera-related-legislation-sent-to-governor/" target="_blank" rel="noreferrer noopener">enacted legislation</a> to forego the annual $225 million payment to PERA during the height of the COVID-19 pandemic, when the General Assembly cut billions of dollars from the state budget. The state resumed payments in July 2021 but did not make up 2020’s payment.</p>



<p>The Pension Review Commission’s draft calls for the state to make a payment totaling $303.57 million — $225 million plus estimated investment gains, had the money been invested — on July 1, 2022.</p>



<p>Lawmakers recommended using money from the state’s general fund to make the payment, though committee members also suggested using money from a new cash fund the legislature established during the <a href="https://peraontheissues.com/2021-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">2021 legislative session</a>. That fund, which currently has a balance of $380 million, is meant specifically for future payments to PERA.</p>



<p>The draft bill will head next to the Legislative Council before it could be introduced in the 2022 legislative session.</p>



<p>The $225 million direct distribution to PERA is part of a package of reforms enacted under Senate Bill 200 in 2018 and is meant to help PERA pay down its unfunded liability. Also included in Senate Bill 200 was the Automatic Adjustment Provision, which will trigger increases in employee and employer contributions to PERA and reductions to annual increases for benefit recipients in July 2022.</p>


Legislative Committee Seeks to Make Up Missed $225M Payment to PERA


<p>In January, <a href="https://content.copera.org/legislative-qa-with-peras-public-and-government-affairs-manager/" target="_blank" rel="noreferrer noopener">we spoke with</a> Michael Steppat, PERA’s Public and Government Affairs Manager. As the Colorado legislative session winds to a close, we checked back in to get his thoughts on a number of different topics.</p>



<h2 class="wp-block-heading has-medium-font-size">The legislative session usually ends in early May. However, this year’s legislative session started with a multi-week recess due to COVID-19. So where does that put us now?</h2>



<p>The state legislature can meet for no more than 120 days. The delay essentially just extended the deadline for the general assembly to adjourn <em>sine die</em>—the formal term used when the legislative session ends for the year. The number of days they were on recess can just be tacked on to the end of the original end date. That means the legislature must adjourn on or before June 12.</p>



<h2 class="wp-block-heading has-medium-font-size"><a href="https://peraontheissues.com/2021-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">Two bills related to PERA</a> have passed. What can you tell us about them? What effect will they have for PERA members?</h2>



<p>PERA retirees who go back to work at a PERA employer in retirement must follow certain rules set by law. House Bill 21-1136 modified the provisions created for judges who work in retirement. These changes were made in order to address the massive caseload backlog caused by the pandemic and only affect retired judges.</p>



<p>Another bill, Senate Bill 21-228, set aside funds in the current fiscal year to be used by the state for future employer contributions or disbursements to PERA. This bill does not change anything about how PERA works. This bill was created primarily to give lawmakers additional flexibility to operate within Colorado’s state budget rules.</p>



<h2 class="wp-block-heading has-medium-font-size">What is the status of last year’s direct distribution, which was part of across-the-board cuts the legislature made to the budget? Will this year’s $225 million direct distribution be made to PERA?</h2>



<p>PERA did not receive the $225 million direct distribution in 2020, however the full direct distribution to PERA was restored going forward, including this year’s payment.</p>



<h2 class="wp-block-heading has-medium-font-size">Do you expect any other PERA-related bills to come up this session?</h2>



<p>I don’t expect any more bills that are directly related to PERA.</p>



<h2 class="wp-block-heading has-medium-font-size">Many pieces of major federal legislation have been passed in the past few months. Do any of these impact state finances in a way that will affect PERA?</h2>



<p>Anything that impacts state finances can potentially have an indirect effect on PERA, as we saw last year with the budget cuts that had to be made. However, there isn’t anything we’ve seen in any of the pandemic-relief-related federal legislation that would affect PERA directly. It’s also important to keep in mind that federal law prohibits state lawmakers from using the funds sent to them in recent COVID-related legislation for pension-related purposes.</p>



<h2 class="wp-block-heading has-medium-font-size">As is the case most years, there is a bill to repeal the Government Pension Offset and Windfall Elimination Provision in Social Security. What is the state of that bill?</h2>



<p>House Resolution 82, <a href="https://peraontheissues.com/wep-gpo-bill-introduced-in-d-c/" target="_blank" rel="noreferrer noopener">which would repeal the GPO and WEP</a>, was introduced earlier this year. While it has gained cosponsors since it was introduced in January, we haven’t seen it move through legislative process.</p>



<p>A second bill has also been introduced recently. While this second bill would not repeal these Social Security-related measures, it would make some changes to the WEP. See more about <a href="https://content.copera.org/legislative-qa-with-peras-public-and-government-affairs-manager/" target="_blank" rel="noreferrer noopener">House Resolution 2337</a>.</p>


Tag Archives:

What to Expect from the 2025 Legislative Session

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2023 Proposed Legislation Status

What to Expect in Colorado’s 2022 Legislative Session

Legislative Committee Seeks to Make Up Missed $225M Payment to PERA

Legislative Q&A with PERA’s Public and Government Affairs Manager

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