
<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.


<h4 class="wp-block-heading"><a href="https://content.copera.org/news-you-should-know-lawmakers-still-working-on-secure-2-0-retirement-legislation/" target="_blank" rel="noreferrer noopener"><strong>SECURE 2.0 Could Pass Before New Congress | Pensions &amp; Investments</strong></a></h4>



<p>Lawmakers in Washington, DC continue to work on a number of retirement-related proposals that have collectively been referred to as “SECURE Act 2.0.” While time is running low to pass new legislation, there’s still a chance lawmakers could reconcile the bills and pass a final package before the end of the year.</p>



<h4 class="wp-block-heading"><a href="https://www.reuters.com/markets/us/several-parts-us-yield-curve-are-inverted-what-does-it-tell-us-2022-11-01/" target="_blank" rel="noreferrer noopener"><strong>Explainer: Several Parts of the U.S. Yield Curve Are Inverted: What Does It Tell Us? | Reuters</strong></a></h4>



<p>Experts often look to the U.S. Treasury’s so-called “yield curve” to determine if the country is headed for a recession, since inversions in the curve have reliably predicted past recessions. Here’s a look at recent trends in Treasury yields and what they could mean for the economy.</p>



<h4 class="wp-block-heading"><a href="https://www.investing.com/analysis/us-personal-savings-rate-nears-historical-bottom-200631728" target="_blank" rel="noreferrer noopener"><strong>U.S. Personal Savings Rate Nears Historical Bottom | Investing.com</strong></a></h4>



<p>During the early months of the COVID-19 pandemic, many people buckled down and significantly increased the amount of money they were putting into savings. That trend has since reversed, and recent data show Americans are now saving at historically low levels.</p>



<h4 class="wp-block-heading"><a href="https://401kspecialistmag.com/what-is-pretirement-and-why-do-more-people-want-one-before-retiring/" target="_blank" rel="noreferrer noopener"><strong>What is &#8216;Pretirement&#8217; and Why Do More People Want One Before Retiring? | 401(k) Specialist</strong></a></h4>



<p>Workers are increasingly interested in the idea of “preretirement,” a period of transition between full-time work and traditional retirement. A recent survey found 69 percent of respondents view retirement as a gradual transition away from full-time work rather than an abrupt end.</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: Lawmakers Still Working on SECURE 2.0 Retirement Legislation


<p><em>Editor&#8217;s note: Updated forms are <a href="https://content.copera.org/irs-to-begin-using-updated-form-w-4p-and-new-form-w-4r-in-2023/" target="_blank" rel="noreferrer noopener">now available online at copera.org</a>.</em></p>



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<p>The IRS is implementing some changes to tax withholding forms in 2023 that could affect retirees who receive benefit payments from plans like Colorado PERA.</p>



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



<p>In 2020, the IRS began requiring employers to use a new version of Form W-4, which employees fill out to tell their employer how much to withhold from their paychecks. The updated form was a result of the Tax Cuts and Jobs Act of 2017, which made a number of significant changes to tax law, including eliminating personal exemptions. Instead of using complicated worksheets and declaring a number of withholding allowances, employees now fill out the form with the relevant information, and employers calculate the appropriate amount of tax to withhold.</p>



<p>The updated form is intended to ensure employers withhold a more accurate amount from workers’ paychecks. The result is fewer people who either owe money to the IRS or who receive large refunds at tax time.</p>



<h4 class="wp-block-heading"><strong>Updated W-4P and new W-4R</strong></h4>



<p>Following the tax code changes from the Tax Cuts and Jobs Act and the updated W-4 form, the IRS is also updating Form W-4P, which is used to determine tax withholdings for pension and annuity accounts.</p>



<p>While the old form covered both one-time distributions and recurring payments, there are now two forms. Form W-4P is only for recurring payments such as monthly PERA benefit payments, while Form W-4R is for one-time or lump-sum distributions such as refunds or rollovers.</p>



<p>Like the W-4, the W-4P form no longer allows tax filers to adjust their withholdings by electing a specific number of withholding allowances. Instead, the W-4P form has new input fields for increasing or decreasing the amount to withhold, including fields for tax credits and deductions.</p>



<h4 class="wp-block-heading"><strong>What the changes mean for PERA retirees</strong></h4>



<p>PERA retirees and benefit recipients who are currently receiving ongoing PERA benefit payments and who do not wish to make changes to their federal tax withholding elections are not required to file a new form. However, PERA recommends completing a new W-4P form for 2023 to ensure the appropriate tax amount is withheld.&nbsp;</p>



<p>If a filer makes no changes to their federal tax withholding elections, PERA will use the IRS method to bridge their tax table elections over to the new methodology as of January 1, 2023. This bridging, in most cases, will adjust their withholding accordingly. If a person’s current election is to withhold zero federal tax, a flat dollar amount tax or flat percentage tax, those elections will remain the same, but may be incorrect withholding amounts under the new IRS guidelines, which is why PERA recommends submitting the new W-4P form for 2023.</p>



<p>PERA anticipates retirees and benefit recipients will be able to update their tax withholding elections <a href="https://www.copera.org/member-and-retiree-forms" target="_blank" rel="noreferrer noopener">online and by paper forms</a> in mid-December 2022 for changes to take effect January 1, 2023.</p>



<p>Please note that PERA cannot provide tax advice, including advice about how to complete these forms. If you have questions about your particular situation, please contact a tax or legal advisor.</p>



<p>For more information on taxes and PERA benefits, visit <a href="https://www.copera.org/taxes-on-benefits" target="_blank" rel="noreferrer noopener">copera.org</a>.</p>


IRS to Begin Using Updated Form W-4P and New Form W-4R in 2023


<h4 class="wp-block-heading"><a href="https://www.cbsnews.com/news/ethereum-merge-blockchain-cbs-news-explains/" target="_blank" rel="noreferrer noopener"><strong>Why &#8220;The Merge&#8221; Could Change the Future of Cryptocurrency | CBS News</strong></a></h4>



<p>There’s a big upgrade happening in the world of cryptocurrency, dubbed “The Merge.” Experts say the Merge will reduce the environmental impact of Ethereum, one of the most popular cryptocurrency blockchains, and ultimately make the digital currency more useful.</p>



<h4 class="wp-block-heading"><strong><a href="https://www.kiplinger.com/taxes/605209/savers-credit-and-earn-act" target="_blank" rel="noreferrer noopener">Big Changes to the Saver’s Credit Could Be on the Way | Kiplinger</a></strong></h4>



<p>Lawmakers in Washington, DC have introduced a new package of retirement reforms called the Enhancing American Retirement Now (EARN) Act. Included in the EARN Act is a provision that would change the way the Saver’s Credit works, depositing the credit directly into a retirement account instead of being a credit on your tax returns.</p>



<h4 class="wp-block-heading"><a href="https://www.reuters.com/business/healthcare-pharmaceuticals/walmart-unitedhealth-offer-joint-program-preventive-healthcare-seniors-2022-09-07/" target="_blank" rel="noreferrer noopener"><strong>Walmart, UnitedHealth to Offer Preventive Healthcare Program for Seniors | Reuters</strong></a></h4>



<p>Walmart and UnitedHealth Group have agreed to a 10-year partnership aimed at improving access to preventive care for seniors enrolled in Medicare Advantage plans. The partnership will kick off next year at Walmart locations in Florida and Georgia, with plans to expand to other areas in the future.</p>



<h4 class="wp-block-heading"><a href="https://www.cnbc.com/2022/09/05/how-much-cash-you-need-in-an-emergency-fund-at-every-career-stage.html" target="_blank" rel="noreferrer noopener"><strong>How Much Cash You Need in an Emergency Fund at Every Career Stage | CNBC</strong></a></h4>



<p>A common piece of financial advice is to keep three to six months’ worth of expenses in a savings account for emergencies. But that rule of thumb doesn’t necessarily apply to everyone; you may need significantly more cash on hand, depending on where you are in your career, what kind of work you do, and whether or not you have a significant other.</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: What to Know About Cryptocurrency’s Big ‘Merge’


<h4 class="wp-block-heading"><a href="https://www.napa-net.org/news-info/daily-news/what%E2%80%99s-new-secure-act-20" target="_blank" rel="noreferrer noopener">What’s in the New SECURE Act 2.0?</a> | The National Association of Plan Advisors</h4>



<p>A bill known as the “SECURE Act 2.0” looks to build on last year’s SECURE Act, which altered a number of retirement-related laws. The bipartisan legislation passed the Ways and Means Committee of the U.S. House of Representatives unanimously, a big step in its final passage. Changes the bill would make if it becomes law include:</p>



<ul><li>Making auto-enrollment in 401(k) and 403(b) the norm, with a minimum amount of at least 3%.</li><li>Automatically increasing contribution amounts by 1% every year until contributions reach 10%.</li><li>Individuals have the option to opt out. Current 401(k) and 403(b) plans are grandfathered in. And small businesses, new businesses, church plans, and governmental plans are exempt.</li><li>Allows an employer to help employees pay off student loans, treating this assistance as if it were matching contributions to a retirement plan.</li></ul>



<h4 class="wp-block-heading"><a href="https://www.aarp.org/retirement/planning-for-retirement/info-2021/5-mistakes-couples-make.html" target="_blank" rel="noreferrer noopener">5 Mistakes Couples Make When Planning for Retirement</a>&nbsp;| AARP</h4>



<p>Money disagreements are common among partners. In fact, a 2018 study suggested that about four in ten divorced Gen Xers and three in ten divorced Baby Boomers cited money differences as a reason for their marriage ending. The most common problem areas have nothing to do with dollars and cents and everything to do with communication. When you think about your road to retirement, follow this advice to make sure that your road and your partner’s road are headed in the same direction.</p>



<h4 class="wp-block-heading"><a href="https://content.copera.org/news-you-should-know-whats-in-the-secure-act-2-0/" target="_blank" rel="noreferrer noopener">What Motherhood Taught Me About Money: 8 Moms Weigh In</a>&nbsp;| Mooresville Tribune</h4>



<p>In recognition of Mother’s Day, this article compiles advice from mothers around the country. Some common themes are found throughout, including a more focused approach to planning for the future and understanding the value of the present.</p>



<h4 class="wp-block-heading"><a href="https://www.plansponsor.com/health-care-costs-retirement-remain-top-stressor/" target="_blank" rel="noreferrer noopener">Health Care Costs in Retirement Remain a Top Stressor</a>&nbsp;| Plan Sponsor</h4>



<p>Health care costs are a top fear for soon-to-be retirees. However, most people haven’t spent time planning for this expense, according to a recent report from Fidelity. While rising prices do present a serious issued, there are steps people can take. Building up a health savings account during your working years can yield additional resources in your retirement years due to the tax savings. And retirees should spend time during open enrollment evaluating their options: The plan that worked for you one year might not be the best fit now.</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: What’s in the SECURE Act 2.0?


<p><em>A digest of news from publications around the nation about finance, investing, and retirement.</em></p>



<p><a href="https://www.cpr.org/2020/04/27/colorado-needs-local-and-rural-federal-coronavirus-aid-but-it-may-be-slow-coming/" target="_blank" rel="noreferrer noopener">Colorado Needs Local And Rural Federal Coronavirus Aid, But It May Be Slow Coming</a> | <a href="http://www.cpr.org" target="_blank" rel="noreferrer noopener">CPR</a></p>



<p>Colorado has received $2.2 billion in federal aid. Major population centers received about a quarter of the funds directly. The state legislature is charged with sorting out the rest. Some are concerned the dollars won’t be spread around evenly. But nearly all agree: However the money is sorted out, communities everywhere will still face major shortfalls.</p>



<p><a href="https://www.kiplinger.com/article/taxes/T054-C005-S001-second-round-stimulus-checks-for-2000-each-month.html" target="_blank" rel="noreferrer noopener">Are We Going to Get a Second Round of Stimulus Checks for $2,000 Each Month?</a> | <a href="http://www.kiplinger.com" target="_blank" rel="noreferrer noopener">Kiplinger</a></p>



<p>Colorado’s per capita income in 2018 was about $36,000. That means that the recent federal stimulus checks of up to $1,200 per person cover about two weeks of income. For those who have lost earned income, the big question is: “what happens next?” On the heels of the CARES Act, some legislators are talking about sending out additional stimulus checks. </p>



<p><a href="https://www.pewtrusts.org/en/research-and-analysis/articles/2020/04/16/why-state-budget-officials-worry-about-covid-19s-impact-on-sales-taxes" target="_blank" rel="noreferrer noopener">Why State Budget Officials Worry About COVID-19&#8217;s Impact on Sales Taxes</a> | <a href="http://www.pewtrusts.org" target="_blank" rel="noreferrer noopener">PEW Trusts</a></p>



<p>Sales taxes tend to be a less volatile form of income for states relative to other taxes, such as corporate income or oil extraction. However, with a sudden, precipitous drop in consumer spending, this usually reliable revenue source is now shakier than in past recessions. </p>



<p><a href="https://www.forbes.com/sites/wadepfau/2020/04/22/determining-sustainable-spending-from-an-investment-portfolio-in-retirement/#290b523a2592" target="_blank" rel="noreferrer noopener">Determining Sustainable Spending From An Investment Portfolio In Retirement</a> | <a href="http://www.forbes.com" target="_blank" rel="noreferrer noopener">Forbes</a></p>



<p>Investment returns, longevity assumptions, assumed rate of return—these are terms you might be familiar with when reading about PERA’s DB funds. But the same concepts apply to individual plans, like a 401(k), especially when asking how much you can safely withdraw from those accounts in retirement.</p>


Retirement Roundup: Local and Rural Areas Look for Aid


<p>On Friday, March 27, the Coronavirus Aid, Relief, and Economic Security Act (<a href="https://www.copera.org/three-ways-the-cares-act-affects-your-peraplus-accounts" target="_blank" rel="noreferrer noopener" label=" (opens in a new tab)" class="broken_link">CARES Act</a>) was signed into law. The legislation provides nearly $2 trillion in <a href="https://www.npr.org/2020/03/26/821457551/whats-inside-the-senate-s-2-trillion-coronavirus-aid-package" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">economic support</a> to individuals, businesses, health care providers, and governments at the federal, state, and local level. </p>



<p>Reports often highlight the CARES Act’s direct cash
distribution of up to $1,200 for individuals. But the bill contains multiple
other sources of relief for individuals who need access to additional funds
amid this health crisis. For PERA members, the CARES Act makes it easier to
access savings in PERAPlus 401(k) and 457 plan accounts, if needed.</p>



<p><strong>Coronavirus-related Distribution</strong> </p>



<p>The CARES Act adds a new opportunity to receive up to a
$100,000 distribution from a retirement plan account if an individual: (1) is
diagnosed with COVID-19; (2) has a spouse or dependent diagnosed with the
virus; or (3) is quarantined, furloughed, laid off, has their work hours
reduced, or is unable to work due to lack of childcare. </p>



<p>Typically, individuals are charged a 10-percent penalty in
addition to regular taxes if they make withdrawals from a retirement account,
including a 401(k), before reaching the age 59½. The CARES Act waives the
penalty for coronavirus-related distributions during 2020. &nbsp;Further, taxes on this distribution can be
spread out over a three-year period. Individuals will have the opportunity to
pay the distribution back (pending future guidance from the IRS). </p>



<p><strong>RMD Waiver</strong></p>



<p>Required Minimum Distributions (RMDs) are waived for 2020
for Defined Contribution (DC) plans. For PERA retirees, no RMDs are required
for the DC Plan, the 401(k) Plan, or the 457 Plan. Defined Benefit Plan RMDs must
still be taken in 2020. </p>



<p><strong>Expanded Loans</strong></p>



<p>Members who are affected by COVID-19 (under the same criteria as listed in the distribution section) can take a loan of their entire account balance (up to $100,000) from a 401(k) or 457 account within 180 days of enactment of the Act. </p>



<p>The due date on loan repayments for members who are affected by COVID-19 is delayed for one year. Prior to the Act, the maximum loan amount was half the account balance (up to $50,000). </p>



<p><strong>Before Using
Retirement Funds, Consider This</strong></p>



<p>This increased flexibility can bring a much-needed source of money in an emergency. However, many <a href="https://www.copera.org/three-ways-the-cares-act-affects-your-peraplus-accounts" target="_blank" rel="noreferrer noopener" label=" (opens in a new tab)" class="broken_link">financial experts</a> recommend tapping retirement accounts only as a last resort. Withdrawing retirement account funds during a market downturn limits your ability to bounce back when the market recovers. Instead, consider cutting unnecessary expenses and contacting creditors about repayment options before making withdrawals from your retirement accounts.</p>



<p>The development and passage of this law took place rapidly. PERA is working with Voya to interpret and implement these changes as soon as possible. Members with questions are encouraged to call PERA’s Defined Contribution team at (303)398-7665.</p>



<p><strong>Important
Information for PERA Members and Retirees About Receiving Federal Rebates</strong></p>



<p>A major
component of the CARES Act is a rebate of up to $1,200 per individual. These
rebates will be processed by the IRS. </p>



<p>The IRS
plans to use Social Security records&nbsp;and tax returns from 2018 and 2019 to
coordinate these rebates. As a result, PERA retirees who neither receive Social
Security payments nor file federal taxes, as well as PERA members who do not
file federal income taxes, should be aware that they might need to take an
additional step to receive a rebate. Once the IRS determines what this step is,
it will conduct a public awareness campaign to provide additional guidance. </p>



<p>The House Committee on Ways &amp; Means has <a rel="noreferrer noopener" label=" (opens in a new tab)" href="https://www.copera.org/three-ways-the-cares-act-affects-your-peraplus-accounts" target="_blank" class="broken_link">addressed</a> many common questions about this topic.</p>



<p></p>



<p><em>Editor&#8217;s note: We will update this story as more information becomes available. Last updated: March 31, 2020.</em></p>


Three Ways the CARES Act Affects Your PERAPlus Accounts


<p><em>A digest of health care information about cost savings, public policy and staying healthy in retirement. </em></p>



<h4 class="wp-block-heading"><a href="https://www.aarp.org/politics-society/advocacy/info-2019/house-passes-drug-price-bill.html" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Prescription drug legislation in Congress: An update</a> | <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="http://aarp.org" target="_blank">AARP</a></h4>



<p>Recent developments in both houses of Congress show movement on drug pricing legislation. The Democratic caucus in the House of Representatives passed the Elijah Cummings Lower Drug Costs Now Act, with a series of far-reaching drug pricing reforms. The Senate Finance Committee released updates to its drug pricing package. Finally, the Health, Education, Labor, and Pensions Committee <a href="https://www.npr.org/sections/health-shots/2019/12/17/788624397/congress-considers-bipartisan-compromise-legislation-on-surprise-medical-bills" target="_blank" rel="noreferrer noopener" aria-label="reached a deal (opens in a new tab)">reached a deal</a> on surprise billing that includes small drug pricing elements. With the passage of the House bill, pressure may increase on Senate Republicans to sign on to the Finance Committee’s more moderate package. Yet for legislation to pass in this Congress, it may take focused attention and support from the Trump administration, which faces a number of competing priorities.</p>



<h4 class="wp-block-heading"><a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.coloradopolitics.com/news/gardner-members-of-congress-request-delay-of-health-insurance-tax/article_c38a0e9e-1ba3-11ea-bcb7-87fb68d52a2e.html" target="_blank">Gardner, members of Congress request delay of Health Insurance Tax</a> | <a href="http://www.coloradopolitics.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Colorado Politics</a></h4>



<p>U.S. Sen. Cory Gardner and members of
Congress from both chambers and both parties have sent a letter to
congressional leadership requesting a delay in a&nbsp;<a href="https://www.copera.org/health-care-headlines-3-3" target="_blank" rel="noreferrer noopener" class="broken_link">$15.5 billion tax</a>&nbsp;on health insurance companies.</p>



<p>Senators and Representatives who signed the letter indicated a concern that the tax, which would be passed on to consumers, would particularly impact seniors and Americans with disabilities. The Health Insurance Tax (HIT), part of the 2010 Affordable Care Act, imposes a fee on health insurance based on their premiums and market share. Congress put a moratorium on the HIT in 2017, allowed it to resume in 2018, and suspended it again in 2019. It’s <a href="https://www.copera.org/health-care-headlines-3-3" target="_blank" rel="noreferrer noopener" label=" (opens in a new tab)" class="broken_link">unclear</a> when Congress might act on legislation that would suspend the tax through 2021.</p>



<h4 class="wp-block-heading"><a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.kunc.org/post/coloradans-demand-action-health-care-costs-lawmakers-work-public-option" target="_blank">As Coloradans demand action on health care costs, lawmakers work on a public option</a> | <a href="http://www.kunc.org/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">KUNC</a></h4>



<p>The
latest health care proposal coming out of the Capitol from State Rep. Dylan
Roberts (D-Avon), which has bipartisan support, would create a new health
insurance plan. The so-called “public option” would be governed by the state,
but still use private insurance companies. The state would set reimbursement
rates for hospitals and dictate how much the insurance companies must spend on
patient care.</p>



<h4 class="wp-block-heading"><a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://coloradosun.com/2019/12/11/opioid-settlement-money-treatment/" target="_blank">Colorado could soon get a lot of money from opioid settlements. But where should those dollars go?</a> | <a href="http://www.coloradosun.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">The Colorado Sun</a></h4>



<p>Colorado could soon be in line for tens of millions of dollars from legal settlements related to the opioid epidemic. That kind of windfall would represent a major leap forward in the state’s effort to combat the crisis, which has claimed the lives of more than 5,000 Coloradans since 2000. But it would also present a significant challenge over how to spend those funds. Already, the Attorney General’s office is involved in discussions over <a href="https://coloradosun.com/2019/09/13/why-it-might-not-matter-if-colorados-attorney-general-doesnt-think-the-national-opioid-settlement-is-sufficient/">multi-state</a>, <a href="https://coloradosun.com/2019/10/23/colorado-opioid-settlement-mckesson/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">multibillion-dollar</a> settlements with several drug companies. Local governments that filed lawsuits separately could also be in line for dollars coming directly into their budgets.</p>



<h4 class="wp-block-heading"><a rel="noreferrer noopener" label=" (opens in a new tab)" href="https://www.copera.org/health-care-headlines-3-3" target="_blank" class="broken_link">House-Senate fix could break gridlock on &#8216;surprise&#8217; medical bills</a> | <a href="https://www.copera.org/health-care-headlines-3-3" target="_blank" rel="noreferrer noopener" label=" (opens in a new tab)" class="broken_link">Politico</a></h4>



<p>Bipartisan efforts to protect patients from
“surprise” medical bills are regaining momentum after stalling out over the
summer. Leaders of the House Energy and Commerce Committee&nbsp;and the
chairman of the Senate health panel recently announced a deal they said would
rely on “a new system for independent dispute resolution often called
arbitration.&#8221;</p>



<p>The announcement comes as consumer advocates
pushed for a solution that would hold patients harmless in billing disputes
between health plans and providers. Congress set the issue as one of its top
health care priorities this year, citing sometimes jaw dropping bills for care
received out of network.</p>



<h4 class="wp-block-heading"><a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://coloradosun.com/2019/12/06/polis-hospital-prices-affordability/" target="_blank">The Polis administration wants a greater say over hospital prices for more than 1 million Coloradans</a> &nbsp;| <a href="http://www.coloradosun.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">The Colorado Sun</a></h4>



<p>Colorado’s top
insurance regulator has said that he will soon propose a rule that allows him
to dig deeper into hospitals’ deals with health insurance companies, the latest
in the Polis administration’s push for greater say over hospital prices. The
new rule will give him the ability, as part of the rate-review process, to
determine whether the underlying prices that insurance companies negotiate with
hospitals are affordable. It will also allow him to look at whether insurance
companies are passing onto consumers any price breaks that they negotiate with
hospitals or whether they are pocketing the savings for themselves.</p>



<h4 class="wp-block-heading"><a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://khn.org/news/as-his-wifes-caregiver-a-doctor-discovers-whats-missing-at-health-cares-core/" target="_blank">As his wife’s caregiver, a doctor discovers what’s missing at health care’s core</a> | <a href="http://www.khn.org/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Kaiser Health News</a></h4>



<p>Caring for someone with a serious illness stretches people spiritually and emotionally, often beyond what they might have thought possible. In his recently published book, “<a href="https://www.penguinrandomhouse.com/books/573438/the-soul-of-care-by-arthur-kleinman/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">The Soul of Care: The Moral Education of a Husband and a Doctor</a>, Dr. Arthur Kleinman, a professor of psychiatry and anthropology at Harvard University, describes his awakening to the realities of caregiving when his beloved wife, Joan, was diagnosed with a rare form of early Alzheimer’s disease. He learned that no one who goes through this emerges unchanged. He became less self-centered, more compassionate and more aware of how the health care system fails to support family caregivers, the backbone of the nation’s long-term care system.</p>


Health Care Headlines


<p>More than 87,000 PERA members have retirement savings in a PERAPlus 401(k) or 457 account. Rules that govern those accounts could soon change. If the bill becomes law, a person could keep money invested longer and take out up to $5,000 upon the arrival of a new child, among other changes. </p>



<p>In May, the <a href="https://content.copera.org/senators-try-to-revive-retirement-bill/">SettingEvery Community Up for Retirement Enhancement Act of 2019</a> (SECURE
Act) was approved by the U.S. House with 99 percent of the vote—an
overwhelmingly bipartisan tally. Colorado Rep. Ed Perlmutter was a bill
cosponsor, and all seven members of the Colorado congressional delegation—four
Democrats and three Republicans—voted in favor of the bill.</p>



<p>After
the SECURE Act passed the House, it moved to the Senate. While <a href="https://www.cnbc.com/2019/05/24/what-the-secure-act-would-mean-for-you.html">some
expected</a>
a quick passage by <a href="https://www.senate.gov/reference/glossary_term/unanimous_consent.htm">unanimous
consent</a>,
opposition from three senators <a href="https://www.plansponsor.com/in-depth/secure-act-ensnared-senate-flying-house/">has
slowed</a>
the bill’s momentum. Sens. Cruz, R-Texas, Toomey, R-Pa., and Lee, R-Utah, all
reportedly have concerns about components of the bill. The bill could still
pass with a majority vote, but it <a href="https://www.plansponsor.com/congressional-leaders-want-secure-act-passage-2019/">would
require a lengthier process</a>.</p>



<p>In October, seven Republican Senators,
including Colorado Sen. Cory Gardner, <a href="https://www.scott.senate.gov/imo/media/doc/Sen.%20Scott%20Letter%20on%20SECURE%20Act.pdf">wrote a
letter</a>
to McConnell, in which they urged passage of the bill.</p>



<p><strong>What the
SECURE Act does</strong></p>



<p><em>Increase
access to retirement plans</em></p>



<p>About <a href="https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2017/02/retirement-plan-access-and-participation-across-generations">one third</a> of U.S.
workers do not have access to workplace retirement plans, like a 401(k) or defined
benefit (pension) plan. The SECURE Act seeks to expand access to retirement accounts,
making it easier and more affordable for businesses, particularly small
businesses, to offer retirement plans. Every Colorado PERA member already has
the <a href="https://www.copera.org/recap-of-pera-boards-september-meeting">opportunity</a> to have
both a defined benefit plan and a 401(k).</p>



<p><em>Raise the Required Minimum Distribution age to 72</em></p>



<p>The advantage to saving money in a qualified retirement plan, like a 401(k), boils down to two tax benefits: Contributions made to these accounts are made with pretax deductions from a person’s paycheck, and profits from the sale of investments in these accounts are not subject to the <a href="https://www.investopedia.com/terms/c/capital_gains_tax.asp">capital gains tax</a>. Distributions from these accounts in retirement are taxed as ordinary income. Currently, retirees are required to begin taking distributions from these account no later than age 70.5, a rule known as Required Minimum Distribution (RMD). The SECURE Act would raise the RMD age to 72, giving retirees a few more years of tax-free growth. (You can find RMD calculators like <a href="https://content.copera.org/senators-try-to-revive-retirement-bill/">this</a> online).</p>



<p><em>The SECURE Act also would alter the following:</em></p>



<ul><li>Parents could withdraw up to $5,000 from retirement accounts within the first year of giving birth or adopting a child.</li><li>Currently, a person can make contributions to an IRA until they reach the age of 70.5. The Act would remove this age cap.</li><li>Say you retire with a 401(k) balance of $175,000. Understanding how much you can expect to be able to spend per month without depleting the account can be difficult. The Act would require providers of defined contribution accounts to demonstrate how an account balance might translate to monthly lifetime income through the purchase of an annuity or similar product. </li><li>An IRA accountholder can designate a beneficiary—a person who receives the IRA upon the accountholder’s death. Currently, the beneficiary is able to spread out tax-free distributions over his or her lifetime while taking advantage of continued tax-free growth. The bill would limit the amount of time a beneficiary has to withdraw all funds from the IRA to 10 years. A beneficiary who is the spouse of the original IRA accountholder would be exempt from this rule.</li></ul>


Senators Try to Revive Retirement Bill


<p>Earlier in June, PERA Interim Executive Director Ron Baker sent a letter to Colorado’s Congressional delegation asking that they withhold support from potential legislation that could undermine public pension recovery efforts and recent pension reforms in Colorado and around the country.</p>



<p>Over the past eight years, Rep. Devin Nunes (R-CA) has introduced legislation known as the <a href="https://www.copera.org/pera-corrects-the-record-about-proposed-federal-legislation-2" target="_blank" rel="noreferrer noopener">Public Employee Pension Transparency Act (“PEPTA”)</a>. Rep. Nunes recently asked each member of Congress through a “Dear Colleague” letter to co-sponsor similar PEPTA legislation this session.</p>



<p>In his letter, Baker outlines a number of reasons why PEPTA is concerning for public pension plans in general and for Colorado PERA specifically.</p>



<ul>
<li>The legislation would require public employee plans, including PERA, to report their pension liabilities and assets using an assumption that their investments will only earn the U.S. Treasury bonds interest rate. PERA’s $49 billion trust fund is a diversified portfolio of stocks, bonds, real estate, private equity and other assets. Historically, these investments have earned a <a href="https://content.copera.org/pera-corrects-the-record-about-proposed-federal-legislation-2/" target="_blank" rel="noreferrer noopener">rate in excess</a> of the legislation’s artificial benchmark. Any states and local governments associated with public plans that did not comply with this requirement would be stripped of their ability to issue federally tax-exempt bonds.</li>



<li>PEPTA is based on an assumption that many state and local retirement plans are headed toward insolvency and don’t share meaningful information about their financial condition. Each year, PERA produces a Comprehensive Annual Financial Report, a voluminous data source available online. Further, PERA reports to three (soon to be four) legislative oversight committees during the interim session and the regular legislative session.</li>
</ul>



<p>The letter also notes that PEPTA would not lower taxpayer costs, increase transparency, expand accountability, or improve understanding of state and local government retirement plans.</p>



<p>PERA staff will continue to monitor the progress of PEPTA and other federal legislation that could impact public pension plans or PERA members. PERA’s letter to Colorado’s Congressional Delegation is available <a href="https://peraontheissues.com/wp-content/uploads/2018/06/No-PEPTA-Letter-to-Congressman-Lamborn_06-20-2018.pdf" target="_blank" rel="noreferrer noopener">here</a>.</p>


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