
<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>The Colorado PERA Board of Trustees voted to support <a href="https://leg.colorado.gov/bills/sb25-147" target="_blank" rel="noreferrer noopener">SB25-147</a>, a bill that proposes changes to statute regarding Board operations and transparency. The Trustees held a special meeting on Friday, February 28 to discuss the bill and take a position.</p>



<p>The bill from sponsors Sen. Byron Pelton, Sen. Chris Kolker, Rep. Lori Garcia Sander, and Rep. Meghan Lukens would modify state law to impose term limits on Trustees; define the PERA Board as a local public body instead of a state public body as it applies to the Colorado Open Meetings Law; and require that PERA post certain financial information online, including staff compensation and various other administrative expenses.</p>



<p>In addition to the above changes, the bill sets out in state law some current Board and staff practices, including:</p>



<ul>
<li>Posting Board meeting materials and recordings on PERA’s website: PERA currently streams every Board meeting on <a href="https://www.copera.org/about/board-and-leadership" target="_blank" rel="noreferrer noopener">copera.org</a> and <a href="https://www.youtube.com/@ColoradoPERA" target="_blank" rel="noreferrer noopener">YouTube</a>, and recordings are available afterward. Agendas for Board meetings are posted in advance and materials from past meetings are also available online.</li>



<li>Providing instructions for members of the public to participate in Board meetings: PERA currently provides multiple ways to communicate with the Board, including public comment (in person and over the phone) at every regular meeting and a Board-specific email address on the <a href="https://www.copera.org/contact-us" target="_blank" rel="noreferrer noopener">Contact Us page</a>.</li>



<li>Posting audited financial statements online: PERA’s <a href="https://copera.org/annual-report" target="_blank" rel="noreferrer noopener"><em>Annual Comprehensive Financial Report</em></a> (ACFR) contains detailed information about PERA’s finances, membership, and operations. The <em>ACFR</em> and all other annual financial reports are <a href="https://www.copera.org/forms-resources/financial-reports-and-studies" target="_blank" rel="noreferrer noopener">available online</a>.</li>
</ul>



<p></p>



<p>In their conversation about the bill and its proposed changes, Trustees discussed the importance of transparency in maintaining trust with stakeholders. The Board’s vote to support the bill demonstrates its commitment to making PERA more open and accountable.</p>



<p>“Strong governance and clear communication with our members and the public are vital to a mission-driven organization like Colorado PERA, and we believe Senate Bill 147 helps affirm our commitment to transparency,” said CEO/Executive Director Andrew Roth. “I want to thank the sponsors for bringing this bill before the Legislature, and we look forward to further engagement with policymakers as it makes its way through the General Assembly.”</p>



<p>On February 25, the Senate Finance Committee voted unanimously to refer the amended bill to Appropriations, where it remains under consideration.</p>



<p>Learn more and read the full text of the bill on the <a href="https://leg.colorado.gov/bills/sb25-147" target="_blank" rel="noreferrer noopener">General Assembly’s website</a>.</p>


PERA Board Supports Bill That Codifies Board Practices, Enhances Transparency


<p>The 2025 legislative session is well underway with more than 400 bills introduced so far.</p>



<p>To hear the latest from the State Capitol, we caught up with PERA Director of Public &amp; Government Affairs Michael Steppat, who meets regularly with lawmakers throughout the legislative process.</p>



<h4 class="wp-block-heading"><strong>Let’s start with a quick recap of the PERA-related bills we’ve seen so far and where they stand.</strong></h4>



<p>So far this session, legislators have introduced six bills that affect PERA or our members. <a href="https://leg.colorado.gov/bills/hb25-1052" target="_blank" rel="noreferrer noopener">One of those bills</a>—which reintroduced last year’s bill to create a temporary tax credit for retirees—has already been defeated in committee.</p>



<p>The five bills that remain under consideration touch on a variety of topics. For example, <a href="https://leg.colorado.gov/bills/sb25-136" target="_blank" rel="noreferrer noopener">SB25-136</a> would remove the state income tax deduction limit on pension income, and <a href="https://leg.colorado.gov/bills/hb25-1150" target="_blank" rel="noreferrer noopener">HB25-1150</a> would require a PERA member who’s convicted of a sex crime to forfeit part of their benefits.</p>



<p>Two of the bills—<a href="https://leg.colorado.gov/bills/sb25-028" target="_blank" rel="noreferrer noopener">SB25-028</a> and <a href="https://leg.colorado.gov/bills/sb25-147" target="_blank" rel="noreferrer noopener">SB25-147</a>—propose changes to state law that in many cases codify work PERA and the PERA Board are already doing. That includes things such as financial studies and reporting, video streaming Board meetings and posting meeting materials online. As a mission-driven organization, transparency is important to the work we do, and we appreciate working with the Legislature to ensure all stakeholders have the information they need.</p>



<p><strong>READ MORE:</strong> <a href="https://www.copera.org/pera-on-the-issues/2025-proposed-pera-related-legislation-status" target="_blank" rel="noreferrer noopener">2025 Proposed PERA-Related Legislation Status</a></p>



<h4 class="wp-block-heading"><strong>Writing the State’s budget is always an important part of the legislative session; how’s that process going this year?</strong></h4>



<p>Lawmakers began the session with a challenging budget situation—a shortfall of nearly $700 million. There have also been some questions about whether anything in Washington, DC will affect the hundreds of millions of dollars Colorado receives from the federal government. Throughout the budget writing process, lawmakers are keeping a close eye on any potential impacts to the state budget.</p>



<p>The Legislature will release its budget proposal, known as the “long bill,” in March and finalize it in April. While the state budget doesn’t determine PERA’s budget or the payment of benefits, we’ll keep an eye out for anything that might affect PERA or PERA employers down the line.</p>



<h4 class="wp-block-heading"><strong>Do any of the changes in the federal government, such as staffing reductions and spending freezes, affect PERA?</strong></h4>



<p>PERA does not receive federal funding and so far, none of the changes in the federal government have any direct impact on PERA. All of our funding comes from employee and employer contributions, investment returns, and an annual $225 million direct distribution from the state. PERA benefits are paid from the PERA trust funds and are not subject to federal funding or programs.</p>



<p>The Colorado General Assembly created PERA and remains in charge of things like benefit provisions and legislative oversight. While the federal government has limited jurisdiction over public retirement plans like PERA, it does oversee other benefits PERA members and retirees may receive, such as Medicare and Social Security.</p>



<h4 class="wp-block-heading"><strong>Speaking of Social Security, what’s the latest on the Social Security Fairness Act and the repeal of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)?</strong></h4>



<p>Since the Social Security Fairness Act <a href="https://www.copera.org/pera-on-the-issues/president-biden-signs-wep-gpo-repeal-bill-into-law">became law in early January</a>, the Social Security Administration (SSA) has been working to figure out how it will implement all the necessary changes and recalculate retiree benefits. That could take some time under the best of circumstances, since it’s a complicated issue with millions of affected beneficiaries.</p>



<p>The SSA said it’s been under a hiring freeze since November so it’s working with limited staff, and that’s likely to cause a delay in implementing the law. If we see further reductions in the SSA workforce, it’s possible the delay could stretch even further. Only time will tell, and we’re keeping an eye out for any updates or developments from SSA.</p>



<p><strong>READ MORE:</strong> <a href="https://www.copera.org/pera-on-the-issues/social-security-fairness-act-rollout-could-take-a-year-or-more" target="_blank" rel="noreferrer noopener">Social Security Fairness Act Rollout Could Take A Year or More</a></p>



<h4 class="wp-block-heading"><strong>What’s the best way to stay up to date throughout the session?</strong></h4>



<p>We post regular updates here on <em>PERA On The Issues</em>, so <a href="https://www.copera.org/pera-on-the-issues/subscribe" target="_blank" rel="noreferrer noopener">subscribing to the biweekly newsletter</a> is a great way to receive the latest news in your inbox. The legislative session will run through early May, and we’ll be sure to let everyone know about any new bills that come up between now and then.</p>


Checking in on the 2025 Legislative Session So Far


<p><em>The 2025 legislative session commenced January 8 and will continue for up to 120 days.</em></p>



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



<p>Last updated: March 7, 2025</p>



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



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb25-028" target="_blank" rel="noreferrer noopener">SB25-028</a></h2>



<h3 class="wp-block-heading">Public Employees&#8217; Retirement Association Risk-Reduction Measures</h3>



<p><strong>Summary:</strong> Codifies into state law certain reporting practices the PERA Board already performs on a regular basis and modifies the cadence of those reports, including actuarial experience studies and independent reviews of actuarial audits.</p>



<p><a href="Sponsors: Rep. Eliza Hamrick, Rep. Rick Taggart, Sen. Chris Kolker"><strong>Sponsors:</strong> Rep. Eliza Hamrick, Rep. Rick Taggart, Sen. Chris Kolker</a></p>



<p><strong>Status:</strong> Passed second reading in the House March 5.</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/hb25-1052" target="_blank" rel="noreferrer noopener">HB25-1052</a></h2>



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



<p><strong>Summary:</strong> Creates a temporary refundable tax credit of $700 for qualifying PERA retirees. To qualify, a retiree would have to be 65 or older at the end of tax year 2025 or 2026, and have annual gross income of no more than $38,000 for single tax filers or $76,000 for joint filers.</p>



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



<p><strong>Status:</strong> House Finance Committee voted to postpone indefinitely Jan. 27.</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/hb25-1105" target="_blank" rel="noreferrer noopener">HB25-1105</a></h2>



<h3 class="wp-block-heading">PERA True-Up of Denver Public Schools Division Employer Contribution</h3>



<p><strong>Summary:</strong> Would reduce the total employer contribution rate for the Denver Public Schools Division from 10.4% to 7.4% of salary beginning July 1, 2025.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/sean-camacho" target="_blank" rel="noreferrer noopener">Rep. Sean Camacho</a></p>



<p><strong>Status:</strong> Introduced Jan. 27.</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/hb25-1150" target="_blank" rel="noreferrer noopener">HB25-1150</a></h2>



<h3 class="wp-block-heading">Forfeiture of PERA Benefits by Sex Offenders</h3>



<p><strong>Summary:</strong> Requires a PERA member to forfeit part of their retirement benefits should that individual be convicted of a sex crime. It would also establish a new fund into which forfeited benefits would be transferred and these monies would be used to provide grants to survivors of a sex crime for necessary medical and mental health resources.</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>Status:</strong> House Finance Committee voted to postpone indefinitely Feb. 24.</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb25-147" target="_blank" rel="noreferrer noopener">SB25-147</a></h2>



<h3 class="wp-block-heading">Modify Board Management PERA</h3>



<p><strong>Summary:</strong> Would modify a number of provisions under current law related to the PERA Board of Trustees, 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&#8217;s website and updated on an annual basis.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/byron-pelton" target="_blank" rel="noreferrer noopener">Sen. Byron Pelton</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/lori-garcia-sander" target="_blank" rel="noreferrer noopener">Rep. Lori Garcia Sander</a>, <a href="https://leg.colorado.gov/legislators/meghan-lukens" target="_blank" rel="noreferrer noopener">Rep. Meghan Lukens</a></p>



<p><strong>Status:</strong> Senate Appropriations Committee voted to refer to Committee of the Whole March 7.</p>



<h2 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb25-136" target="_blank" rel="noreferrer noopener">SB25-136</a></h2>



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



<p><strong>Summary:</strong> For tax years commencing on or after Jan. 1, 2026, would remove all caps on the deduction for amounts received as pensions and annuities from the individual&#8217;s federal taxable income when determining the individual&#8217;s state taxable income.</p>



<p><strong>Sponsors:</strong> <a href="https://leg.colorado.gov/legislators/byron-pelton" target="_blank" rel="noreferrer noopener">Sen. Byron Pelton</a>, <a href="https://leg.colorado.gov/legislators/ryan-gonzalez" target="_blank" rel="noreferrer noopener">Rep. Ryan Gonzalez</a></p>



<p><strong>Status:</strong> Senate State, Veterans, &amp; Military Affairs Committee voted to postpone indefinitely Feb. 27.</p>


2025 Proposed PERA-Related Legislation Status


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



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



<h4 class="wp-block-heading"><strong>What role does the State Legislature play in PERA?</strong></h4>



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



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



<h4 class="wp-block-heading"><strong>How does the recent election impact PERA?</strong></h4>



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



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



<h4 class="wp-block-heading"><strong>We already have an idea of some of the PERA-related legislative issues lawmakers will be looking at this year. Can you tell us more about that?</strong></h4>



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



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



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



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



<h4 class="wp-block-heading"><strong>Aside from PERA-related topics, what are some other legislative priorities lawmakers will likely be pursuing this year?</strong></h4>



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



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



<h4 class="wp-block-heading"><strong>At the federal level, a new Congress is just getting underway. What can we expect in Washington, DC?</strong></h4>



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



<h4 class="wp-block-heading"><strong>In the final days of the last Congress, legislators took the historic step of approving a bill to repeal Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), and President Biden has since signed the bill into law. What’s the latest on that issue?</strong></h4>



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



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



<h4 class="wp-block-heading"><strong>What do you recommend to anyone who wants to get involved in the legislative process?</strong></h4>



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



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


What to Expect from the 2025 Legislative Session


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



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



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



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



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



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



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



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



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



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



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



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



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



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



<p>We want to thank everyone who subscribes and reads <em>PERA On The Issues</em>. We appreciate your readership and we look forward to helping you stay informed in the new year.</p>



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


Year in Review: Our Top Articles of 2024


<p>Lawmakers in Colorado are moving forward with two PERA-related bill drafts following a summer of legislative activity in interim committees.</p>



<p>PERA leaders and staff have been meeting with legislators throughout the summer to provide updates, answer questions, and provide feedback during this annual period of PERA review and oversight.</p>



<h4 class="wp-block-heading"><strong>Drafts of PERA-related bills</strong></h4>



<p>The <a href="https://leg.colorado.gov/committees/pension-review-commission/2024-regular-session" target="_blank" rel="noreferrer noopener">Pension Review Commission</a>, which is responsible for recommending legislation pertaining to PERA and the Fire and Police Pension Association of Colorado, met on Friday, September 27 to finalize two bill drafts related to PERA.</p>



<p>The first, known as Bill A, is similar to a bill from last session that would provide a temporary tax credit for PERA retirees to reduce the impact of inflation. The $700 credit would apply to retirees who are at least 65 years old and have adjusted gross income of no more than $38,000 for single filers or $76,000 for joint filers.</p>



<p>The second draft, Bill B, pertains to PERA studies and reporting. The bill aims to lay out in statute some of the work the PERA Board already does on a regular basis, such as periodic actuarial audits and actuarial experience studies. The bill also would modify the cadence of those reports.</p>



<p>The Commission had been considering a bill to tie to inflation the State’s annual $225 million direct distribution to PERA, based on a recommendation from the Pension Review Subcommittee. Lawmakers decided not to move forward with that bill as one of their official interim committee-recommended pieces of legislation because of its added cost amid a projected shortfall in the state budget. Lawmakers may still decide individually to move forward with any particular bills during the legislative session.</p>



<h4 class="wp-block-heading"><strong>Pension Review Subcommittee recommendations</strong></h4>



<p>Throughout the summer, PERA also engaged with the <a href="https://leg.colorado.gov/committees/pension-review-subcommittee/2024-regular-session" target="_blank" rel="noreferrer noopener">Pension Review Subcommittee</a>, which consists of a mix of legislators and members of the public and reports up to the Pension Review Commission. In addition to making recommendations to the Pension Review Commission, the Subcommittee also makes recommendations to the PERA Board and writes an annual <a href="https://leg.colorado.gov/content/recommendations-letter-citizens" target="_blank" rel="noreferrer noopener">letter to the residents of Colorado</a> on PERA’s financial health.</p>



<p>In the course of its work, the Pension Review Subcommittee came up with three recommendations for the PERA Board:</p>



<ol type="1">
<li>Provide more detail on the benchmarks PERA uses to measure performance of the various asset classes in the PERA Defined Benefit Plan portfolio.</li>



<li>Improve transparency around PERA Board meetings by making meeting recordings and materials more easily accessible online.</li>



<li>Study the impact of allowing non-vested PERA members who refund their account to receive their balance plus investment returns instead of the current Board-established 3% compounding interest.</li>
</ol>



<p>The PERA Board discussed the recommendations at its <a href="https://www.copera.org/pera-on-the-issues/pera-board-discusses-strategic-plan-investment-strategy-and-more-at-2024-planning-session" target="_blank" rel="noreferrer noopener">September Planning Session</a> and <a href="https://www.copera.org/news/colorado-pera-responds-to-pension-oversight-committees" target="_blank" rel="noreferrer noopener">agreed to consider all three</a>. Investment staff provided the Subcommittee with the information requested on benchmarks, the Board agreed to archive meeting recordings and public materials online starting in November; meetings are currently streamed live and available upon request. The Board also agreed staff will study the cost of providing market returns when a member refunds their account.</p>



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



<p>All bill drafts from interim committees go to the Legislative Council Committee for consideration. If approved, lawmakers can then introduce those bills in the next legislative session, which begins on January 8, 2025.</p>



<p>The PERA Board’s next regularly scheduled meeting is set for November 15.</p>


State Lawmakers Pursuing Two PERA-Related Bills in 2025


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



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



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



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



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



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



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



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



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



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



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


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


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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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


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


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



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



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



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



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



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



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



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


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


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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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


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