
<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>That’s a wrap on the 2026 legislative session. Over the course of 120 days, legislators introduced and debated more than 600 bills and approved a State budget for the next fiscal year.</p>



<p>Legislators also introduced seven bills and one resolution related to PERA. Of those seven bills, six passed and will become law, pending Governor Polis’ signature. Effective dates for passed bills vary and current law applies until the bills take effect.</p>


<div class="callout-heading"><p>For regular updates on legislation and other important topics, <a href="https://www.copera.org/pera-on-the-issues/subscribe">sign up for the biweekly <em>PERA On The Issues</em> newsletter</a>.</p>
</div>


<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Approved bills</h2>



<ul>
<li><a href="https://leg.colorado.gov/bills/HB26-1026" target="_blank" rel="noreferrer noopener"><strong>House Bill 1026</strong></a><strong>: Expanding Plan Options for PERA</strong> – Makes changes to PERA provisions related to purchasing service credit and PERA’s 401(k) and 457(b) plans. Under current law, PERA members can <a href="https://www.copera.org/welcome-pera-members/benefit-basics/purchasing-service-credit">purchase service credit</a> based on previous periods of employment; this bill allows for limited purchases of service credit for periods of unemployment. The bill also requires all PERA-affiliated employers to offer the <a href="https://www.copera.org/retirees/peraplus-401-k-457-plans">PERAPlus 401(k) and 457(b) plans</a>, in both pre-tax and Roth options, to their employees.</li>



<li><a href="https://leg.colorado.gov/bills/HB26-1027" target="_blank" rel="noreferrer noopener"><strong>House Bill 1027</strong></a><strong>: BOCES Definition &amp; Executive Director</strong> &#8211; Under current state law, certain PERA retirees are allowed to return to work for a PERA-affiliated employer without facing a reduction in their PERA benefit. This bill adds executive directors of boards of cooperative services (BOCES) to the list of approved retirees.</li>



<li><a href="https://leg.colorado.gov/bills/HB26-1146" target="_blank" rel="noreferrer noopener"><strong>House Bill 1146</strong></a><strong>: Allow Approved Facility Schools Participate in Public Employees’ Retirement Association</strong> &#8211; Allows approved facility schools—programs that serve students with behavioral issues and other special needs—to apply for affiliation with PERA to provide retirement benefits to their employees.</li>



<li><a href="https://leg.colorado.gov/bills/HB26-1400" target="_blank" rel="noreferrer noopener"><strong>House Bill 1400</strong></a><strong>: Adjust Public Employees’ Retirement Association’s Allocations to Trust Funds</strong> &#8211; Gives PERA flexibility to allocate the State’s annual $225 million direct distribution to whichever division trust funds would help minimize the likelihood of triggering the Automatic Adjustment Provision, as well as redirect a portion of employers’ health care trust fund contributions to instead help pay off pension liabilities. <a href="https://www.copera.org/pera-on-the-issues/legislature-passes-bill-giving-pera-allocation-flexibility">Learn more about this bill</a>.</li>



<li><a href="https://leg.colorado.gov/bills/SB26-023" target="_blank" rel="noreferrer noopener"><strong>Senate Bill 023</strong></a><strong>: School Finance Act</strong> &#8211; The primary purpose of this bill is to establish public school funding for the 2026-2027 budget. It also adds vice principals, assistant principals, and assistant superintendents to the list of positions eligible to work after retirement without limits under the “critical shortage” designation.</li>



<li><a href="https://leg.colorado.gov/bills/SB26-151" target="_blank" rel="noreferrer noopener"><strong>Senate Bill 151</strong></a><strong>: Modify Public Employees Retirement Association Allowed Affiliation and Board of Trustees</strong> &#8211; Expands PERA membership to include employees of DSST chartered under Denver Public Schools, which had previously been exempt from membership as part of the legislation authorizing the merger of Denver Public Schools Retirement System and PERA effective January 1, 2010, and also makes the ex officio Trustee from the Denver Public Schools Division a voting member of the PERA Board.</li>
</ul>



<p></p>



<p><strong>MORE:</strong> <a href="https://www.copera.org/pera-on-the-issues/2026-proposed-pera-related-legislation-status">2026 Proposed PERA-Related Legislation Status</a></p>



<p><a href="https://leg.colorado.gov/bills/HB26-1062" target="_blank" rel="noreferrer noopener">House Bill 1062</a>, which would have removed the cap on state income tax deductions for pensions and other annuity income, failed to make it out of committee.</p>



<p>In addition to the aforementioned PERA-related bills, the Legislature passed <a href="https://leg.colorado.gov/bills/SJR26-016" target="_blank" rel="noreferrer noopener">Senate Joint Resolution 016</a>, which recognizes the importance of retirement security, encourages workers to seek out financial education to improve their retirement readiness, and highlights the importance of lifetime income options in the PERA Defined Contribution Plan and PERAPlus 401(k)/457 Plans.</p>



<p>Legislators also passed <a href="https://leg.colorado.gov/bills/HB26-1331" target="_blank" rel="noreferrer noopener">House Bill 1331</a>, which suspends interim committee activity for 2026. That means legislative committees that typically meet in between sessions—such as the Pension Review Commission and Pension Review Subcommittee—will not meet this year.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Next steps</h2>



<p>For any bills the Governor has not yet signed, he has 30 days after the session ends to take action. If the Governor doesn’t sign or veto a bill, it will automatically become law after the 30 days.</p>


Legislature Passes Six PERA-Related Bills During 2026 Session


<p>The Colorado General Assembly gave its approval to a bill that helps keep the PERA Defined Benefit Plan on track to meet its funding goal by giving PERA additional flexibility in how it allocates contributions to the Plan.</p>



<p>Legislators passed <a href="https://leg.colorado.gov/bills/HB26-1400" target="_blank" rel="noreferrer noopener">House Bill 1400</a>, which now heads to Governor Jared Polis for action.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Background</h2>



<p>In 2025, PERA’s actuaries conducted an analysis of the <a href="https://www.copera.org/automatic-adjustment-provision">Automatic Adjustment Provision</a> (AAP), the mechanism included in Senate Bill 18-200 that automatically adjusts member and employer contributions, retiree annual increases, and the State’s annual $225 million direct distribution based on PERA’s funding progress. The goal was to examine how well the AAP has been functioning so far and consider whether any proactive changes are warranted.</p>



<p>While the AAP has largely worked as intended, the actuaries identified two modifications to help reduce the chance of triggering automatic adjustments in the near future without jeopardizing our funding progress. Both changes involve giving PERA more flexibility in how it allocates contributions to the trust funds.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Flexibility in allocating the State’s direct distribution</h2>



<p>Every year on July 1, the State of Colorado makes a direct payment of $225 million to PERA. Under current state law, PERA is required to allocate the $225 million to three of the five division trust funds (State, School, and Judicial) proportionally based on total payroll.</p>



<p>The division trust funds differ in their funding levels and some are closer to reaching full funding than others. This disparity is likely to continue, which results in the less-funded divisions having a disproportionate impact on the annual AAP calculation and triggering automatic adjustments if their contributions are not keeping up with the amount needed each year to reach full funding.</p>



<p>House Bill 1400 would allow PERA to allocate the State’s direct distribution on an actuarial basis, meaning the money will be deposited to whichever fund(s) would reduce the likelihood of triggering the AAP in the future.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Redirecting a portion of employer contributions to the health care trust fund</h2>



<p>The second provision of the bill reduces employer contributions to PERA’s health care trust fund from 1.02% of employee salaries to 0.52%. The 0.50% reduction is then redirected to the pension trust funds to help pay down the <a href="https://www.copera.org/pera-on-the-issues/understanding-peras-unfunded-liability">unfunded liability</a>.</p>



<p>The health care trust fund is much closer to full funding than the pension trust funds, so this change will make sure those contributions are going where they’re needed most. Employer rates would remain the same, with incrementally more money going to pay off the unfunded liability and keeping PERA on track for full funding.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">What’s next?</h2>



<p>If the Governor signs House Bill 1400 into law, the changes take effect July 1, 2026.</p>



<p>The 2026 legislative session is still underway and other PERA-related bills remain under consideration. Visit our <a href="https://www.copera.org/pera-on-the-issues/2026-proposed-pera-related-legislation-status">2026 Proposed PERA-Related Legislation Status</a> article for the latest information.</p>


Legislature Passes Bill Giving PERA Allocation Flexibility


<p>The Colorado PERA Board of Trustees met in Denver on Friday, March 20.</p>



<p>The Board’s agenda included discussions and action items related to Board elections, the 2026 legislative session, PERA funding levels, and more.</p>



<p>Additional&nbsp;details, including meeting materials and a recording of the meeting livestream,&nbsp;are available on the&nbsp;<a href="https://www.copera.org/about/board-and-leadership/board-meeting-archive">Board Meeting Archive</a>&nbsp;page.&nbsp;</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Board election update</h2>



<p>Elections for open seats on the Board are held each May, and Trustees approved the list of candidates and voted to proceed with elections for two open seats this year:</p>



<ul>
<li><strong>School Division:</strong>&nbsp;one 4-year term to be filled by an active member currently employed in the School Division.&nbsp;&nbsp;</li>



<li><strong>State Division (Higher Education):</strong>&nbsp;one 4-year term, to be filled by an active member currently working for a Higher Education employer in the State Division.</li>
</ul>



<p></p>



<p>Ballots will be mailed in early May to active members in the School and State divisions. Voting will be available by paper ballot, phone, and online via the election website or the Colorado PERA mobile app and member portal.</p>



<p>The Board will announce the results of the election at its June 25 meeting.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">2026 legislative session</h2>



<p>CEO/Executive Director Andrew Roth and Director of Public and Government Affairs Michael Steppat provided the Board with an update on the 2026 legislative session, which began in January and will continue through mid-May.</p>



<p>As of the meeting date, legislators had introduced four PERA-related bills and one resolution. Two of those bills have passed: <a href="https://leg.colorado.gov/bills/HB26-1027" target="_blank" rel="noreferrer noopener">House Bill 1027</a> allows executive directors of boards of cooperative services (BOCES) to return to work after retiring for unlimited amounts of time without facing a reduction in their PERA benefits, and <a href="https://leg.colorado.gov/bills/HB26-1146" target="_blank" rel="noreferrer noopener">House Bill 1146</a> allows approved facility schools—which serve students whose needs aren’t being met in a regular classroom—to apply for affiliation with PERA to provide retirement benefits to their employees.</p>



<p><a href="https://leg.colorado.gov/bills/SJR26-016">Senate Joint Resolution 016</a>, which recognizes the importance of retirement security, encourages workers to seek out financial education to improve their retirement readiness, and highlights the importance of lifetime income options in the PERA Defined Contribution Plan and PERAPlus 401(k)/457 Plans, has also passed.</p>



<p><a href="https://leg.colorado.gov/bills/HB26-1026">House Bill 1026</a> remains under consideration. That bill would allow PERA members to <a href="https://copera.org/purchasing-service-credit/">purchase</a> a limited amount of service credit for periods of unemployment and also require all PERA-affiliated employers to offer the voluntary <a href="https://www.copera.org/retirees/peraplus-401-k-457-plans">PERAPlus 401(k) and 457 plans</a>, in both pre-tax and Roth options, to their employees.</p>



<p><strong>MORE INFO:</strong></p>



<ul>
<li><a href="https://www.copera.org/pera-on-the-issues/checking-in-on-the-2026-legislative-session-so-far">Checking in on the 2026 Legislative Session So Far</a></li>



<li><a href="https://www.copera.org/pera-on-the-issues/2026-proposed-pera-related-legislation-status">2026 Proposed PERA-Related Legislation Status</a></li>
</ul>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Overview of PERA’s unfunded liabilities</h2>



<p>To better understand the context and history of PERA’s unfunded liabilities—i.e., the gap between the amount of money in the division trust funds and the value of current and future benefits owed to PERA members—the Board engaged in discussions with consulting firms Segal, Aon, and Ailman Advisers.</p>



<p>While various factors have contributed to changes in unfunded liabilities over the past two and a half decades, the session centered on factors that have had the largest impacts and included a review of which factors the Board can and cannot control.</p>



<p>Unfunded liabilities pose a challenge to many public pension plans, but PERA is on a path to full funding by 2048. As of Dec. 31, 2024—the date of our most recent <a href="https://www.copera.org/annual-report"><em>Annual Comprehensive Financial Report</em></a>—we remain on track to meet that goal.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Market and portfolio update</h2>



<p>Chief Investment Officer/Chief Operating Officer Amy C. McGarrity presented information on financial market performance so far in 2026. Oil and commodities have been strong performers year-to-date while other asset classes, such as global equities, have been largely flat or negative.</p>



<p>McGarrity also discussed the impact of the conflict in Iran, which has disrupted the supply of oil and other resources since the beginning of March. That conflict has affected markets around the world, McGarrity said, introducing significant uncertainty and volatility across various sectors.</p>



<p>The PERA Board determines PERA’s strategic asset allocation, which is the most significant factor influencing long-term investment performance and asset volatility. Maintaining a disciplined approach helps ensure PERA can meet its obligations throughout market cycles.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">2026 meeting dates</h2>



<p>The PERA Board plans to hold three more regularly scheduled meetings in 2026. Those dates are:</p>



<ul>
<li>June 25</li>



<li>September 23 to 25 (planning session and meeting)</li>



<li>November 20</li>
</ul>



<p></p>



<p>For more information on Board meetings, including recordings and meeting materials, visit&nbsp;the&nbsp;<a href="https://www.copera.org/about/board-and-leadership" target="_blank" rel="noreferrer noopener">Board and Leadership</a>&nbsp;page.&nbsp;</p>


PERA Board Discusses Legislation, Funding at March 2026 Meeting


<p>We’re more than halfway through the 2026 legislative session, which kicked off in mid-January and will continue until mid-May. So far, state lawmakers have introduced nearly 500 bills that could become law.</p>



<p>For an update on this session’s legislative activity, we checked in with Michael Steppat, PERA’s Director of Public and Government Affairs. Throughout the session, Steppat, along with PERA executives, meets with legislators, educates them on and discusses PERA-related issues and policy, and testifies at bill hearings.</p>



<h2 class="wp-block-heading has-medium-font-size text-black"><strong>Can you start by updating us on PERA-related bills that have been introduced so far?</strong></h2>



<p>As of mid-March, legislators <a href="https://www.copera.org/pera-on-the-issues/2026-proposed-pera-related-legislation-status">have introduced four PERA-related bills</a>, one of which is still making its way through the General Assembly.</p>



<p><a href="https://leg.colorado.gov/bills/HB26-1026" target="_blank" rel="noreferrer noopener">House Bill 1026</a> would make changes to PERA provisions related to purchasing service credit and expand access to the PERAPlus 401(k) and 457 plans. Under current state law, qualified PERA members can purchase service credit based on previous periods of employment, and this bill would allow for limited purchases based on periods of unemployment, such as taking time off to raise a child or care for a loved one. It would also require all PERA-affiliated employers to offer the PERAPlus 401(k) and 457 plans, in both pre-tax and Roth options, to their employees.</p>



<p>Many employers already offer these plans to their employees, which have competitive advantages compared to others available in the marketplace. The bill does not mandate that employees participate in them, and it allows employers to continue offering any other existing plans if they choose. That bill has passed the House and is now under consideration in the Senate.</p>



<p><a href="https://leg.colorado.gov/bills/HB26-1146" target="_blank" rel="noreferrer noopener">House Bill 1146</a> would allow approved facility schools to apply for affiliation with PERA to provide retirement benefits to their employees. These are schools serving students whose needs aren’t being met in a regular classroom. That bill has passed.</p>



<p><a href="https://leg.colorado.gov/bills/HB26-1027" target="_blank" rel="noreferrer noopener">House Bill 1027</a>, which would allow executive directors of boards of cooperative services (BOCES) to return to work after retiring for unlimited amounts of time without facing a reduction in their PERA benefits, has passed. That bill was signed into law by Governor Polis on March 12.</p>



<p><strong>MORE INFO:</strong> <a href="https://www.copera.org/pera-on-the-issues/2026-proposed-pera-related-legislation-status">2026 Proposed PERA-Related Legislation Status</a></p>



<h2 class="wp-block-heading has-medium-font-size text-black"><strong>Let’s talk about the State budget. As lawmakers work to cut spending and balance the budget, they’ve been discussing the potential privatization of Pinnacol Assurance. Can you explain more about that and why PERA is part of the conversation?</strong></h2>



<p>Pinnacol Assurance is a quasi-public entity that provides workers’ compensation coverage, serves as the State’s “insurer of last resort,” and is an affiliated employer in the State Division of PERA. The Governor’s Office has proposed to convert it to a private company and to use the proceeds of the State’s interest in Pinnacol for other priorities to help alleviate the budget shortfall. Pinnacol also wants to privatize so it can modernize and serve the needs of its customers, which may include expanding its business outside of Colorado, something it’s currently prohibited from doing.</p>



<p>The privatization of Pinnacol has been a point of discussion in many recent legislative sessions, and the reason PERA comes into play is because Pinnacol’s employees are public employees and therefore PERA members. If Pinnacol were to become a private entity, its employees could no longer be PERA members, and they and Pinnacol could no longer contribute to the Defined Benefit Plan, and so there would be a requirement for Pinnacol to disaffiliate from PERA.</p>



<p>That kind of conversion has financial implications for PERA, since those employees would still be entitled to the retirement benefits they’d earned prior to disaffiliation and given the current unfunded liability of PERA, there is a cost to disaffiliate. Under state law, any employer who disaffiliates from PERA must pay for its share of that unfunded liability. PERA’s actuaries calculate the cost of disaffiliation based on current law, which means using a 5.25% discount rate—PERA’s actuarial investment assumption rate (currently at 7.25%) minus 200 basis points, or 2%—to account for the inherent risks and ensure PERA has the assets to pay the earned benefits over time without that liability shifting to the rest of the State Division fund.</p>



<p>The potential conversion of Pinnacol to a private entity has also been the topic of ballot measures filed recently for the upcoming November election. We’ll continue to monitor this issue and ensure that if privatization moves forward, it won’t have any negative financial effect on PERA.</p>



<h2 class="wp-block-heading has-medium-font-size text-black"><strong>Are there other aspects of the budget process that might affect PERA?</strong></h2>



<p>The Joint Budget Committee is nearing the finish line when it comes to producing the State budget for the next fiscal year. The budget bill, known as the long bill, will be introduced later this month, and there will be a handful of companion bills that relate to the State budget.</p>



<p>The JBC is tasked with cutting hundreds of millions of dollars to produce a balanced budget, which is required by law, as the costs of providing certain governmental services has been increasing faster than what the State is allowed to keep and spend each year. That’s no easy task, and they’ve had to juggle many competing priorities throughout the process.</p>



<p>PERA doesn’t rely on the State budget for the administration or operating costs of the plan, but we always monitor the budget-writing process to watch for any potential impacts. Any changes to PERA contributions—either the State’s annual $225 million direct distribution to PERA or the State’s contributions as a PERA employer—would require separate legislation to go through the regular legislative process and be signed into law by the Governor.</p>



<p>The Governor had included in his budget proposal a temporary 1% reduction in the State’s contributions to PERA as an employer, but the Joint Budget Committee denied that request earlier in the session. We’re grateful that the Legislature remains committed to making consistent contributions to fund public employees’ retirement benefits.</p>



<p><strong>READ MORE:</strong> <a href="https://copera.org/pera-on-the-issues/joint-budget-committee-rejects-proposal-to-reduce-pera-contributions">Joint Budget Committee Rejects Proposal to Reduce PERA Contributions</a></p>



<h2 class="wp-block-heading has-medium-font-size text-black"><strong>What other legislative issues can we expect to come up between now and the end of the session?</strong></h2>



<p>We’re currently working with legislators on a companion bill to the long bill that we think will put PERA on even stronger footing as we make progress toward our funding goal.</p>



<p>PERA’s actuaries conducted a study into some potential changes that could reduce the likelihood of triggering the&nbsp;<a href="https://www.copera.org/automatic-adjustment-provision" target="_blank" rel="noreferrer noopener">Automatic Adjustment Provision</a>&nbsp;(AAP) that took effect with Senate Bill 200 in 2018. The AAP automatically adjusts member and employer contributions, the State’s direct distribution, and retiree annual increases based on our funding progress.&nbsp;</p>



<p>We know those adjustments can be really challenging for our members and retirees, so the bill will include two proposals that are meant to make adjustments less likely in the near future—without jeopardizing our progress toward reaching full funding by 2048.</p>



<p>Those proposals include providing PERA flexibility to&nbsp;allocate&nbsp;the&nbsp;State’s annual $225 million direct distribution&nbsp;to whichever division trust funds&nbsp;would help minimize the likelihood of&nbsp;triggering automatic&nbsp;adjustments and&nbsp;redirecting a&nbsp;portion&nbsp;of employers’ health care trust fund contributions to instead help pay off&nbsp;pension&nbsp;liabilities.&nbsp;The health care trust fund is closer to full funding than the pension trust funds, so we want to make sure those contributions are going where they’re needed most and benefit the largest number of retirees.</p>



<p>It’s also likely that the Legislature will consider a bill suspending certain interim committee activities like they did last session, in order to save money in between sessions. </p>



<p>For the latest updates throughout the session, be sure to <a href="https://www.copera.org/pera-on-the-issues/subscribe">subscribe to the biweekly <em>PERA On The Issues </em>newsletter</a>.</p>


Checking in on the 2026 Legislative Session So Far


<p>The State Legislature’s Joint Budget Committee reaffirmed its commitment to retirement security for public employees by denying a request to reduce contributions to PERA.</p>



<p>In an effort to reduce State spending and balance the budget, Governor Jared Polis had included in his budget proposal a plan to temporarily reduce contributions from employers in PERA’s State Division by 1%.</p>



<p>The Joint Budget Committee (JBC) met on February 4 to consider that and other proposals. After hearing hours of testimony on many competing interests, JBC members voted to deny the Governor’s request. With the vote, the Committee shows the Legislature remains committed to ensuring stable, reliable funding for PERA and a secure retirement for the hundreds of thousands of PERA members who have served our State.</p>



<p>There’s still a lot of legislative work that has to happen before the JBC finalizes its budget in the spring, and <em>PERA On The Issues</em> will continue to monitor the process throughout the session.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">JBC moves to draft other PERA proposals</h2>



<p>The JBC also voted to draft two legislative proposals that PERA developed to strengthen the Defined Benefit Plan’s financial position and reduce the likelihood of triggering automatic adjustments under the <a href="https://www.copera.org/automatic-adjustment-provision">Automatic Adjustment Provision</a> of 2018’s Senate Bill 200.</p>



<p>Those proposals are:</p>



<ul>
<li>Give PERA flexibility to&nbsp;allocate&nbsp;the&nbsp;State’s annual $225 million direct distribution&nbsp;to whichever division trust funds&nbsp;would most help minimize the likelihood of&nbsp;triggering automatic&nbsp;adjustments.</li>



<li>Redirect a&nbsp;portion&nbsp;of employers’ health care trust fund contributions to help pay off&nbsp;pension&nbsp;liabilities.</li>
</ul>



<p></p>



<p>Lawmakers have not yet formally introduced a bill to include either proposal.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Additional legislative activity</h2>



<p>Work continues on other PERA-related bills that are making their way through the General Assembly.</p>



<p>On February 9, the House Finance Committee voted to postpone indefinitely <a href="https://leg.colorado.gov/bills/HB26-1062" target="_blank" rel="noreferrer noopener">House Bill 1062</a>, which would have removed the state income tax deduction cap on income from pensions and other annuities. That means the bill will not move forward this session.</p>



<p>Three other PERA-related bills remain under consideration, including <a href="https://leg.colorado.gov/bills/HB26-1026" target="_blank" rel="noreferrer noopener">House Bill 1026</a>, which passed the House Finance Committee and is now with the House Appropriations Committee. That bill would make two changes: Allow for limited purchases of service credit for periods of unemployment, and require all PERA employers to offer the PERAPlus 401(k) and 457 Plans to their employees.</p>



<p><strong>MORE INFO:</strong> <a href="https://www.copera.org/pera-on-the-issues/2026-proposed-pera-related-legislation-status">2026 Proposed PERA-Related Legislation Status</a></p>


Joint Budget Committee Rejects Proposal to Reduce PERA Contributions


<p><em>The 2026 legislative session commenced January 14 and will continue for up to 120 days.</em></p>



<p><em>Below you&#8217;ll find summaries and status information for proposed legislation that affects PERA and its members and retirees. We&#8217;ll update the status of each bill regularly and encourage you to <a href="https://www.copera.org/pera-on-the-issues/subscribe">subscribe to our biweekly newsletter</a> for regular updates.</em> <em>Note that bill summaries describe each bill as introduced and may not reflect all recent changes.</em></p>



<p>Last updated: May 21, 2026</p>



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



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/HB26-1026" target="_blank" rel="noreferrer noopener">House Bill 1026</a></h2>



<h3 class="wp-block-heading">Expanding Plan Options for PERA</h3>



<p><strong>Summary:</strong> Would make changes to PERA provisions related to purchasing service credit and PERA’s 401(k) and 457(b) plans. Under current law, PERA members can purchase service credit based on previous periods of employment; this bill would allow for limited purchases of service credit for periods of unemployment. The bill would also require all PERA-affiliated employers to offer the PERAPlus 401(k) and 457(b) plans, in both pre-tax and Roth options, to their employees.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/bob-marshall" target="_blank" rel="noreferrer noopener">Rep. Bob Marshall</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/chris-kolker" target="_blank" rel="noreferrer noopener">Sen. Chris Kolker</a></p>



<p><strong>PERA position:</strong> Support</p>



<p><strong>Status: </strong>Passed; sent to Governor May 19</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/HB26-1027" target="_blank" rel="noreferrer noopener">House Bill 1027</a></h2>



<h3 class="wp-block-heading">BOCES Definition &amp; Executive Director</h3>



<p><strong>Summary:</strong> Under current state law, certain PERA retirees are allowed to return to work for a PERA-affiliated employer without facing a reduction in their PERA benefit. This bill would add executive directors of boards of cooperative services (BOCES) to the list of approved retirees.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/tammy-story" target="_blank" rel="noreferrer noopener">Rep. Tammy Story</a>, <a href="https://leg.colorado.gov/legislators/chris-kolker" target="_blank" rel="noreferrer noopener">Sen. Chris Kolker</a></p>



<p><strong>PERA position:</strong> Monitor</p>



<p><strong>Status:</strong> Passed; signed by Gov. Polis March 12</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/HB26-1062" target="_blank" rel="noreferrer noopener">House Bill 1062</a></h2>



<h3 class="wp-block-heading">Expand Deduction for Retirement Benefits</h3>



<p><strong>Summary: </strong>Under current state law, individuals can deduct a portion of their pension or other annuity income from their taxable income, up to the applicable limit. This bill would remove all caps on the deduction beginning with the 2027 tax year.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/ron-weinberg" target="_blank" rel="noreferrer noopener">Rep. Ron Weinberg</a></p>



<p><strong>PERA position:</strong> Support</p>



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



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/HB26-1146" target="_blank" rel="noreferrer noopener">House Bill 1146</a></h2>



<h3 class="wp-block-heading">Allow Approved Facility Schools Participate in Public Employees&#8217; Retirement Association</h3>



<p><strong>Summary:</strong> Would allow approved facility schools—programs that serve students with behavioral issues and other special needs—to affiliate with PERA to provide retirement benefits to their employees.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/jacque-phillips" target="_blank" rel="noreferrer noopener">Rep. Jacque Phillips</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/chris-kolker" target="_blank" rel="noreferrer noopener">Sen. Chris Kolker</a>, <a href="https://leg.colorado.gov/legislators/cathy-kipp" target="_blank" rel="noreferrer noopener">Sen. Cathy Kipp</a></p>



<p><strong>PERA position:</strong> Support</p>



<p><strong>Status: </strong>Passed; signed by Gov. Polis April 2</p>



<h2 class="wp-block-heading has-black-color has-text-color"><span style="text-decoration: underline; color:#000000;"><a href="https://leg.colorado.gov/bills/SJR26-016" target="_blank" rel="noreferrer noopener">Senate Joint Resolution 016</a></span></h2>



<h3 class="wp-block-heading">Improve Retirement Readiness &amp; Financial Well-Being</h3>



<p><strong>Summary:</strong> Recognizes the importance of retirement security, encourages workers to seek out financial education to improve their retirement readiness, and highlights the importance of lifetime income options in the PERA Defined Contribution Plan and PERAPlus 401(k)/457 Plans.</p>



<p><strong>Sponsors: </strong><a href="https://leg.colorado.gov/legislators/william-lindstedt" target="_blank" rel="noreferrer noopener">Sen. William Lindstedt</a>, <a href="https://leg.colorado.gov/legislators/rebekah-stewart" target="_blank" rel="noreferrer noopener">Rep. Rebekah Stewart</a></p>



<p><strong>PERA position:</strong> Monitor</p>



<p><strong>Status:</strong> Adopted</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/SB26-151" target="_blank" rel="noreferrer noopener">Senate Bill 151</a></h2>



<h3 class="wp-block-heading">Modify Public Employees Retirement Association Allowed Affiliation and Board of Trustees</h3>



<p><strong>Summary: </strong>Would expand PERA membership to include employees of DSST chartered under Denver Public Schools, which had previously been exempt from membership as part of the legislation authorizing the merger of Denver Public Schools Retirement System and PERA effective January 1, 2010, and would also make the ex officio Trustee from the Denver Public Schools Division a voting member of the PERA Board.</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/julie-gonzales" target="_blank" rel="noreferrer noopener">Sen. Julie Gonzalez</a></p>



<p><strong>PERA position: </strong>Support</p>



<p><strong>Status:</strong> Passed</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/HB26-1400" target="_blank" rel="noreferrer noopener">House Bill 1400</a></h2>



<h3 class="wp-block-heading">Adjust Public Employees&#8217; Retirement Association&#8217;s Allocations to Trust Funds</h3>



<p><strong>Summary:</strong> Would give PERA flexibility to allocate the State’s annual $225 million direct distribution to whichever division trust funds would help minimize the likelihood of triggering the Automatic Adjustment Provision, as well as redirect a portion of employers’ health care trust fund contributions to instead help pay off pension liabilities.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/emily-sirota" target="_blank" rel="noreferrer noopener">Rep. Emily Sirota</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/jeff-bridges" target="_blank" rel="noreferrer noopener">Sen. Jeff Bridges</a>, <a href="https://leg.colorado.gov/legislators/barbara-kirkmeyer" target="_blank" rel="noreferrer noopener">Sen. Barbara Kirkmeyer</a></p>



<p><strong>PERA position: </strong>Support</p>



<p><strong>Status:</strong> Passed</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/SB26-023" target="_blank" rel="noreferrer noopener">Senate Bill 023</a></h2>



<h3 class="wp-block-heading">School Finance Act</h3>



<p><strong>Summary: </strong>The primary purpose of this bill is to establish public school funding for the 2026-2027 budget. It also adds vice principals, assistant principals, and assistant superintendents to the list of positions eligible to work after retirement without limits under the &#8220;critical shortage&#8221; designation.</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/barbara-kirkmeyer" target="_blank" rel="noreferrer noopener">Sen. Barbara Kirkmeyer</a>, <a href="https://leg.colorado.gov/legislators/eliza-hamrick" target="_blank" rel="noreferrer noopener">Rep. Eliza Hamrick</a></p>



<p><strong>PERA position: </strong>Monitor</p>



<p><strong>Status:</strong> Passed; sent to Governor May 19</p>


2026 Proposed PERA-Related Legislation Status


<p>The second regular session of the 75<sup>th</sup> Colorado General Assembly will begin on Wednesday, January 14. Lawmakers will then spend up to 120 days introducing and debating bills that could become law and passing a budget for the next fiscal year.</p>



<p>Before all the legislative activity begins, we sat down with PERA’s Director of Public and Government Affairs, Michael Steppat, to discuss the session and what we can expect as it relates to PERA.</p>



<h2 class="wp-block-heading has-medium-font-size text-black"><strong>Tell our readers a little bit about the Legislature’s role in overseeing PERA and the work you do.</strong></h2>



<p>It can be helpful to think of the General Assembly as PERA’s plan sponsor while the PERA Board administers benefits. The General Assembly is responsible for determining things like contribution rates and benefit levels, providing oversight through various legislative committees, and setting the amount of the annual benefit increases that retirees receive.</p>



<p>Because lawmakers have the power to change plan provisions and benefits, it’s important to make sure they understand how PERA works and how legislation can potentially affect our members, retirees, and funding progress. A lot of my time leading up to and during the legislative session involves meeting with legislators and other stakeholders on PERA-related issues and potential legislation. I also attend bill hearings to help inform committee members and answer their questions.</p>



<h2 class="wp-block-heading has-medium-font-size text-black"><strong>Ahead of the session, you’ve been talking with lawmakers about some PERA-related proposals. Can you give us some more detail on those?</strong></h2>



<p>We’ve been exploring some options from a study PERA’s actuaries performed earlier this year for a couple of proactive legislative changes meant to reduce the likelihood of triggering the <a href="https://www.copera.org/automatic-adjustment-provision" target="_blank" rel="noreferrer noopener">Automatic Adjustment Provision</a> (AAP) that took effect with Senate Bill 200 in 2018. The AAP automatically adjusts member and employer contributions, the State’s direct distribution, and retiree annual increases based on our funding progress. It is a calculation laid out in statute that essentially compares what came into the fund in any given year versus what should have come in that year to keep PERA on track to full funding by 2048. If we fall behind in a given year, contributions go up the following year while annual increases go down, and vice versa.</p>



<p>We know those adjustments can be really challenging for our members and retirees, so we worked with our actuaries to come up with two legislative proposals that are meant to reduce the likelihood of any automatic adjustments in the near future—without jeopardizing our progress toward reaching full funding by 2048.</p>



<p>Those proposals include providing PERA flexibility to&nbsp;allocate&nbsp;the&nbsp;State’s annual $225 million direct distribution&nbsp;to whichever division trust funds&nbsp;would help minimize the likelihood of&nbsp;triggering automatic&nbsp;adjustments and&nbsp;redirecting a&nbsp;portion&nbsp;of employers’ health care trust fund contributions to instead help pay off&nbsp;pension&nbsp;liabilities.&nbsp;The health care trust fund is closer to full funding than the pension trust funds, so we want to make sure those contributions are going where they’re needed most.</p>



<p>We think these two bill proposals will be beneficial for our members, retirees and employers, because they would reduce the chance of automatic adjustments without having any negative financial impact on our funding progress. Additionally, these proposed changes do not require any new funding mechanisms from the State, which is very important as the Legislature is facing yet another year with a budget shortfall and having to make drastic cuts to balance the budget.</p>



<h2 class="wp-block-heading has-medium-font-size text-black"><strong>Speaking of the budget, lawmakers will be tasked with cutting hundreds of millions of dollars in State spending. Could any of those cuts affect PERA?</strong></h2>



<p>PERA doesn’t rely on the State budget for the administration or operating costs of the plan, but the General Assembly and the State of Colorado as an employer make contributions to PERA that could be subject to legislation.</p>



<p>For example, during the early days of the COVID-19 pandemic, the Legislature paused (and later repaid) its annual $225 million direct distribution to PERA due to a significant budget shortfall. We don’t expect anything like that this year. However, Governor Polis included in his budget proposal a 1% reduction in what the State Division contributes as an employer to PERA. Specifically, the governor’s budget request calls for reducing the Amortization Equalization Disbursement (AED) and Supplemental Amortization Equalization Disbursement (SAED) both by 0.5% for employers in the State Division to help balance the fiscal year 2026-27 budget. The AED and SAED are employer contributions to PERA for the purpose of reducing the unfunded actuarial accrued liability.</p>



<p>The proposed 1% reduction would reduce contributions to PERA by about $40 million over the state’s next fiscal year, adding up to about $180 million by the time PERA reaches full funding in 2048.</p>



<p>PERA leadership remains actively engaged with policymakers to oppose measures that would negatively impact the fund’s financial health and we have already provided formal testimony to the Legislature’s Joint Budget Committee outlining the long-term risks of reduced contributions, to ensure they fully understand the consequences for members and retirees.</p>



<h2 class="wp-block-heading has-medium-font-size text-black"><strong>The Governor’s list of budget recommendations also revives the proposal to privatize Pinnacol Assurance. How does PERA factor into that proposal?</strong></h2>



<p>Pinnacol Assurance is the State’s workers’ compensation insurer, and the Governor’s Office wants to convert it from a quasi-public entity to a private one to take advantage of the hundreds of millions of dollars Pinnacol has in its reserves.</p>



<p>If that happens, Pinnacol could not continue to be part of PERA, since its staff would no longer be public employees. In order to disaffiliate from PERA, Pinnacol would be required to pay its portion of DB Plan liabilities—estimated to be approximately $300 million—to fund the benefits its employees have earned prior to disaffiliation.</p>



<p>This is the second year in a row the Governor’s budget request has proposed privatizing Pinnacol Assurance, but it has also been a policy discussion that has come up multiple times over the past few decades and, so far, without any consensus on potential changes to the structure of the state’s largest workers’ compensation carrier and insurer of last resort. If policymakers can agree on a solution to the more fundamental question of whether Pinnacol should be allowed to privatize, then PERA will factor in and we’ll seek to ensure any disaffiliation payment to PERA is satisfactory to cover the expected liabilities over time.</p>



<h2 class="wp-block-heading has-medium-font-size text-black"><strong>We sometimes hear from members who want to know how they can weigh in on legislation—what’s your advice?</strong></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/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>I also encourage anyone who’s interested in PERA-related policy to join the <a href="https://www.copera.org/about/legislation/ambassador-program" target="_blank" rel="noreferrer noopener">Ambassador Program</a> to receive email updates on the legislative session and bills that might affect PERA.</p>



<p>And of course the biweekly&nbsp;<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>&nbsp;will also have up-to-date information on any legislation that affects PERA.</p>


What to Expect from Colorado’s 2026 Legislative Session


<p>As the year wraps up, we’re taking a look back at the articles that captured the attention of <em>PERA On The Issues</em> readers in 2025. Here are our most-read articles of the year.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">1. Congress passes Social Security Fairness Act and repeals WEP and GPO</h2>



<p>Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) have long been topics of interest to <em>PERA On The Issues</em> readers. It’s no surprise that news about Congress passing the Social Security Fairness Act, which repealed both WEP and GPO, drew a great deal of attention. Our articles on the <a href="https://copera.org/pera-on-the-issues/president-biden-signs-wep-gpo-repeal-bill-into-law" target="_blank" rel="noreferrer noopener">bill’s signing</a>, initial estimates that the bill <a href="https://copera.org/pera-on-the-issues/social-security-fairness-act-rollout-could-take-a-year-or-more" target="_blank" rel="noreferrer noopener">would take a year or more to implement</a>, and then the announcement that the Social Security Administration was <a href="https://copera.org/pera-on-the-issues/social-security-administration-expediting-benefit-processing-for-those-affected-by-wep-gpo" target="_blank" rel="noreferrer noopener">expediting benefit processing</a> together accounted for more than a quarter of all visits to the blog this year.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">2. IRS updates contribution limits and other tax provisions for 2026</h2>



<p>With 2025 winding down, many people are already looking ahead to 2026 and making financial preparations for the new year. Our article <a href="https://www.copera.org/pera-on-the-issues/irs-releases-2026-tax-brackets-contribution-limits-other-tax-updates" target="_blank" rel="noreferrer noopener">highlighting inflation adjustments</a> for retirement plan contribution limits, health savings accounts, tax brackets, and other tax provisions quickly became one of our most-read articles of the year.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">3. Lawmakers propose and pass PERA-related legislation</h2>



<p>During the 2025 legislative session, state lawmakers introduced seven bills that pertained to Colorado PERA, and our article <a href="https://www.copera.org/pera-on-the-issues/2025-proposed-pera-related-legislation-status" target="_blank" rel="noreferrer noopener">tracking those bills throughout the session</a> was the second most popular article of the year. Of those seven bills, <a href="https://www.copera.org/pera-on-the-issues/colorado-legislature-passes-four-pera-related-bills-in-2025-session" target="_blank" rel="noreferrer noopener">four passed and became law</a>.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">4. New tax deduction for seniors included in federal legislation</h2>



<p>The tax and spending bill commonly known as the One Big Beautiful Bill Act (OBBBA) included <a href="https://www.copera.org/pera-on-the-issues/news-you-should-know-how-the-new-6k-deduction-for-seniors-works" target="_blank" rel="noreferrer noopener">a new tax deduction for older Americans</a> that takes effect for the 2025 tax year. The deduction—up to $6,000 per eligible taxpayer—applies to taxpayers who are 65 or older and begins to phase out for individuals with modified adjusted gross income over $75,000.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">5. The OBBBA makes changes to health and food assistance programs</h2>



<p>In addition to the new senior tax credit, the One Big Beautiful Bill Act <a href="https://www.copera.org/pera-on-the-issues/what-the-one-big-beautiful-bill-act-means-for-retiree-health-care" target="_blank" rel="noreferrer noopener">made changes to federal assistance programs</a> like SNAP and Medicaid. In particular, the bill established stricter guidelines for who can qualify for assistance under those programs. It also changed some enrollment processes for people who shop for health insurance on their own instead of receiving coverage through an employer.</p>



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<p>We want to thank everyone who subscribes and reads&nbsp;<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>If you haven’t already, be sure to&nbsp;<a href="https://www.copera.org/pera-on-the-issues/subscribe">sign up for our biweekly newsletter</a>&nbsp;to stay in the loop in 2026.</p>


Year in Review: Our Top Articles of 2025


<h2 class="wp-block-heading has-medium-font-size h5"><a href="https://coloradosun.com/2025/06/04/pera-colorado-law-enforcement-funding-deal-proposition-130/" target="_blank" rel="noreferrer noopener"><strong>How PERA Could Be the Big Winner of Colorado’s Police Funding Deal | The Colorado Sun</strong></a></h2>



<p>One of the PERA-related bills that lawmakers passed during the recently concluded legislative session uses a unique funding mechanism for the voter-approved Proposition 130, which creates a fund to support public safety in Colorado. Under the bill, the State will give PERA a lump sum of $500 million and then may reduce its annual payments to PERA in future years based on our investment earnings, until the public safety fund reaches a total of $350 million.</p>



<h2 class="wp-block-heading has-medium-font-size h5"><a href="https://www.cbsnews.com/news/social-security-fairness-act-payments-june-2025/" target="_blank" rel="noreferrer noopener"><strong>Social Security Says over 2.5 million Retroactive Payments Have Been Processed. Here&#8217;s What to Know. | CBS News</strong></a></h2>



<p>The Social Security Administration says it has processed the majority of retroactive payments due to beneficiaries who had previously been affected by the Windfall Elimination Provision (WEP) and/or Government Pension Offset (GPO). The agency said that while affected individuals should have received their retroactive payments by the end of March and their updated benefit amounts in April, more complicated cases that require manual processing will take more time.</p>



<h2 class="wp-block-heading has-medium-font-size h5"><a href="https://www.npr.org/sections/shots-health-news/2025/06/04/nx-s1-5423538/medicare-drug-price-negotiations-ozempic-otezla" target="_blank" rel="noreferrer noopener"><strong>Medicare seeks lower prices for drugs, including Ozempic : Shots &#8211; Health News : NPR</strong></a></h2>



<p>The Centers for Medicare and Medicaid Services has begun its second round of price negotiations with prescription drug manufacturers. The agency is targeting 15 drugs for lower prices, including popular weight-loss medications Ozempic and Wegovy. Any lower prices would go into effect in 2027.</p>



<h2 class="wp-block-heading has-medium-font-size h5"><a href="https://www.investopedia.com/emergency-fund-for-retirement-11741359" target="_blank" rel="noreferrer noopener" class="broken_link"><strong>Retired? Here&#8217;s 5 Reasons You Still Need an Emergency Fund—Plus How Much It Should Cover | Investopedia</strong></a></h2>



<p>If you’re retired, you may be thinking more about withdrawals from your savings rather than stashing away extra cash, but experts say it’s important to keep saving. Unexpected expenses such as medical bills, home repairs, and other emergencies can wreak havoc on any budget and especially for someone on a fixed income.</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: PERA Could Benefit from Public Safety Law


<p><em>Editor&#8217;s note (6-10-25): This article was updated to show that all four bills have been signed into law.</em></p>



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<p>That’s a wrap on the 2025 legislative session—the Colorado General Assembly concluded on Wednesday, May 7.</p>



<p>Lawmakers introduced more than 650 bills over the course of the 120-day session, seven of which related directly to PERA. Of those, four bills passed both chambers and are now on the governor’s desk. Below are summaries of those four bills and their impact on PERA.</p>



<p>Visit our <a href="https://www.copera.org/pera-on-the-issues/2025-proposed-pera-related-legislation-status" target="_blank" rel="noreferrer noopener">legislation tracking page</a> for more information on these bills and the bills that didn’t pass.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">Which bills passed?</h2>



<p><strong><a href="https://leg.colorado.gov/bills/sb25-028" target="_blank" rel="noreferrer noopener">Senate Bill 28</a>: Public Employees’ Retirement Association Risk Reduction Measures</strong></p>



<p>This bill establishes in state law certain reporting practices the PERA Board of Trustees already performs on a regular basis, including actuarial experience studies and independent reviews through actuarial audits. The bill aims to align the timeline of those activities with the Pension Review Subcommittee’s independent review, which it conducts on a regular basis.</p>



<p><a href="https://leg.colorado.gov/bills/hb25-1105" target="_blank" rel="noreferrer noopener"><strong>House Bill 1105</strong></a><strong>: PERA True-Up of Denver Public Schools Division Employer Contribution</strong></p>



<p>Legislation that merged the Denver Public Schools Retirement System (DPSRS) into PERA in 2010 included a requirement that PERA perform a “true-up” calculation every five years to determine if the Denver Public Schools (DPS) Division’s employer contribution rate should be adjusted to ensure the DPS and School Divisions reach equal funding ratios within 30 years.</p>



<p>This bill reduces the DPS Division employer contribution rate by 3.0%, diverts a portion of the DPS Division’s Health Care Trust Fund contributions towards the DPS Division’s Pension Trust Fund, temporarily removes the DPS Division from the Automatic Adjustment Provision calculation (though it remains subject to any changes from the AAP) and temporarily prevents the DPS Division from receiving allocations of the annual direct distribution from the State in order to negate the impact of the reduced contributions having a negative effect on the AAP calculation.</p>



<p><a href="https://leg.colorado.gov/bills/sb25-147" target="_blank" rel="noreferrer noopener"><strong>Senate Bill 147</strong></a><strong>: Modify Board Management PERA</strong></p>



<p>This bill modifies a number of provisions under current law related to the PERA Board, including changes to how PERA is designated for purposes of open meetings laws, establishing term limits for Trustees, and requiring that certain financial information, including various administrative costs and other expenses, be posted on PERA’s website and updated on an annual basis.</p>



<p><strong>READ MORE:</strong> <a href="https://www.copera.org/pera-on-the-issues/pera-board-supports-bill-that-codifies-board-practices-enhances-transparency" target="_blank" rel="noreferrer noopener">PERA Board Supports Bill That Codifies Board Practices, Enhances Transparency</a></p>



<p><a href="https://leg.colorado.gov/bills/sb25-310" target="_blank" rel="noreferrer noopener"><strong>Senate Bill 310</strong></a><strong>: Proposition 130 Implementation</strong></p>



<p>The final PERA-related bill introduced this session involved Proposition 130, the voter-approved measure that directs the state to spend $350 million to recruit, train, and retain local law enforcement officers. The provisions that apply to PERA relate to funding for the bill, which will involve giving PERA a lump-sum payment of $500 million on July 1, 2025 and reducing future years’ direct distributions to PERA based on our investment earnings on the $500 million.</p>



<p>Despite reductions in future direct distributions, the bill is expected to be a net positive for PERA’s funding and also allows PERA to allocate the $500 million in a way that reduces the likelihood of triggering the AAP based on PERA’s funding progress in the future.</p>



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">What’s next?</h2>



<p>Gov. Jared Polis signed all four PERA-related bills into law.</p>



<p>In addition to the above bills, the Legislature passed Senate Bill 199, which suspends interim legislative activities for the year. That means the Pension Review Commission and Pension Review Subcommittee, which usually meet in the period between sessions and begin work on drafting legislation, will not meet this summer. PERA staff will still appear before the Legislative Audit Committee in August to discuss our financial status and receive the results of the State’s annual audit.</p>



<p>Last session, the Legislature <a href="https://www.copera.org/pera-on-the-issues/lawmakers-pass-bill-to-refresh-study-on-value-of-peras-defined-benefit-plan" target="_blank" rel="noreferrer noopener">approved a bill</a> that directs the Office of the State Auditor to commission an updated study comparing the value of PERA’s&nbsp;hybrid&nbsp;defined benefit plan to other plan designs. We expect to receive the results of that study sometime this summer, and we’ll be sure to share that information when we have it.</p>


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