Retirement insights from a Colorado PERA perspective

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

The first week of May is <a href="https://ourpublicservice.org/our-solutions/recognition/public-service-recognition-week/" target="_blank" rel="noreferrer noopener">Public Service Recognition Week</a>, a time to celebrate and honor the millions of local, state and federal employees who serve communities across the United States every day.



Supporting Colorado’s public employees is a daily mission for PERA, which provides retirement and other benefits to more than 620,000 current and former teachers, state troopers, corrections officers, snow plow drivers, and other public workers. PERA’s mission is to provide retirement security to its members while ensuring the stability of the fund.



PERA’s membership is split into five divisions, with most members participating in the Defined Benefit Plan (some state and local government employees have the option to choose between the Defined Benefit Plan and the Defined Contribution Plan). In the DB plan, each division has its own trust fund that pays benefits for that division. Member and employer contributions to each fund are pooled and invested to ensure that each division’s members — whether public school teachers, state employees, local government workers, or judges — can rely on regular, monthly income they won’t outlive in retirement.



While each PERA division encompasses a different range of careers, each provides vital services to keep Colorado communities thriving.



<figure class="wp-block-image size-large"><a href=""><img decoding="async" src="https://www.copera.org/pera-on-the-issues/honoring-the-important-work-of-colorados-public-employees"" class="wp-image-4996"/></a><figcaption>PERA&#8217;s membership is split into five divisions: State, School, Denver Public Schools, Local Government and Judicial.</figcaption></figure>



<h4 class="wp-block-heading">School Division</h4>



The School Division is by far PERA’s largest, with more than 128,000 active members in 2022. That’s more than half of the total active membership. It’s also the division with the largest number of benefit recipients — more than 72,000.



School Division members include teachers, bus drivers, cafeteria workers, school administrators and other staff of public schools across Colorado, from Adams County to Yuma County. Public school employees carry out the important work of educating, transporting, feeding and supporting thousands of children every day, helping them learn and develop into contributing members of society.



Employees of Boards of Cooperative Education Services (BOCES), which provide various services to multiple districts, are also members of the School Division.



<h4 class="wp-block-heading">Denver Public Schools Division</h4>



Denver Public Schools, the state’s largest school district, had its own retirement system until 2010, when it merged with PERA. Because of the unique nature of merging the DPS plan into PERA, its members remain in a separate division from other school districts, with some differences in rules and regulations.



The DPS division includes more than 15,000 active members and more than 7,000 benefit recipients.



<h4 class="wp-block-heading">State Division</h4>



The second largest PERA division, the State Division, includes more than 54,000 active members from a wide variety of professions that provide important services in every corner of the state. This division includes lawmakers and legislative staff at the State Capitol, as well as employees of various state agencies, such as the departments of transportation, public safety, military and veterans affairs, and agriculture. The State Division also includes Colorado’s many institutions of higher education, from local community colleges to the state’s major research universities.



State troopers, snow plow drivers, park rangers, social workers, corrections officers, college professors and other State Division employees work every day to keep Colorado communities safe, healthy and vibrant places to live.



<h4 class="wp-block-heading">Local Government Division</h4>



Equally important as the state employees who keep Colorado running are the nearly 13,000 Local Government Division employees who power cities and towns across the state. That includes not only government staff but also employees of various utility and sanitation districts, housing authorities, libraries, health departments and fire protection districts.



Local government workers help build, maintain and protect the quality of life that so many of Colorado’s communities are known for.



<h4 class="wp-block-heading">Judicial Division</h4>



The Judicial Division is PERA’s smallest, with fewer than 400 active members. Most courthouse workers in Colorado fall under the State Division, so the Judicial Division covers only judges. The division includes judges who preside over county courtrooms, the Court of Appeals, the Colorado Supreme Court and the 1st through 22nd district courts.



Judicial Division judges have the important task of administering justice in Colorado by overseeing criminal trials, civil cases, probate proceedings, juvenile offenses and much more.



Whatever their division and employer, every PERA member provides an important public service that supports all of Colorado. And when they retire, PERA will be here to provide reliable income and other benefits to ensure every public employee can enter their golden years with peace of mind.



<blockquote class="wp-block-quote">Follow PERA on <a href="https://www.facebook.com/ColoradoPERA/" target="_blank" rel="noreferrer noopener" class="broken_link">Facebook</a>, <a href="https://content.copera.org/nearly-1700-people-respond-to-reader-survey/" target="_blank" rel="noreferrer noopener">Instagram</a> and <a href="https://twitter.com/ColoradoPERA" target="_blank" rel="noreferrer noopener">Twitter</a> for more on Public Service Recognition Week.</blockquote>

Honoring the Important Work of Colorado’s Public Employees

During these days of isolation, we remember that so many of the places we long for and the services we rely on are made possible by the daily efforts of thousands of individuals who have devoted their career, or even a part of it, to working for their fellow citizens. 



This makes recognizing the contributions Coloradans make during Public Service Recognition Week (May 3-9) especially poignant this year. More than 200,000 PERA members work for the benefit of their communities, and 122,000 others are retired from public employment in Colorado. 



The work that public employees do is exceptionally varied. Most people are familiar with the work done by our teachers, troopers, and judges. But that’s just the beginning of the ways in which public employees keep the state running.



The following is a sample of the kinds of work PERA members do that you might be less familiar with.



Colorado Parks and Wildlife operates <a href="https://cpw.state.co.us/learn/Pages/Hatcheries.aspx" target="_blank" rel="noreferrer noopener">19 fish hatcheries</a> across the state, stocking Colorado’s waters with more than 90 million fish per year.



PERA members operate a library in Pueblo that has won awards for its <a href="https://www.azahner.com/works/hoag-rawlings-public-library" target="_blank" rel="noreferrer noopener">distinctive architecture</a> and for the <a href="https://www.copera.org/recognizing-public-service-work-that-brings-us-together" class="broken_link">services</a> it provides to the community.



The <a href="https://www.colorado.gov/pacific/agmarkets/fruit-vegetable-section" target="_blank" rel="noreferrer noopener" class="broken_link">Fruit &amp; Vegetable Inspection Service</a>, based in Monte Vista, inspects more than 2.1 billion pounds of fresh produce every year



The <a href="https://www.colorado.gov/pacific/agbrands" target="_blank" rel="noreferrer noopener" class="broken_link">Brand Inspection Division</a> of the Department of Agriculture has been recording, administering, and inspecting livestock brands since 1865.



The <a href="https://www.copera.org/recognizing-public-service-work-that-brings-us-together" target="_blank" rel="noreferrer noopener" class="broken_link">Northeast Colorado Health Department</a> keeps Logan, Morgan, Phillips, Sedgwick, Washington and Yuma counties healthy—that’s 40 people working hard across 9,200 miles!



The <a href="https://www.copera.org/recognizing-public-service-work-that-brings-us-together" target="_blank" rel="noreferrer noopener" class="broken_link">Washington-Yuma Combined Communications Center</a>, which answers more than 23,000 emergency calls per year, is an example of Colorado’s innovative, collaborative spirit.



You probably knew that the Department of Transportation oversees state roadways. Did you also know it oversees the <a href="https://www.youtube.com/watch?time_continue=6&amp;v=0fKgPrCEgT8&amp;feature=emb_logo" target="_blank" rel="noreferrer noopener">skyways</a>?



Being stuck inside, apart from one another, has provided the occasion for many to think about what happens outside, when we’re together. To all those who do the work mentioned above, and for the <a rel="noreferrer noopener" href="https://www.copera.org/pera-on-the-issues/the-future-of-service-at-pera" target="_blank">thousands of others</a> who weren’t—we’re thinking of you, and we’re thankful for you.



<figure class="wp-block-image size-large"><img decoding="async" src="https://content.copera.org/recognizing-public-service-work-that-brings-us-together/"" class="wp-image-3092"/></figure>

Recognizing Public Service—Work That Brings Us Together

May 5&nbsp;&#8211;&nbsp;11,&nbsp;2019



Celebrated the first full week in May since 1985, <a href="https://psrw.ourpublicservice.org/">Public Service Recognition Week</a>
(PSRW) is a time set aside to honor the men and women who serve our nation as
federal, state, county, and local government employees.



PERA exists to provide secure retirements for Colorado’s
public employees and we join in celebrating their service. More than 600,000
current and former public employees in Colorado are PERA members and, on their
behalf, PERA invests $48 billion in defined benefit plan assets for the sole
purpose of funding retirement benefits for a diverse membership.



<blockquote class="wp-block-quote">
In 1931, before Social Security existed, a group of state employees sought legislation that resulted in what was then known as the State Employees’ Retirement Association (SERA). SERA initially covered only state employees, but over time, retirement coverage expanded to include all Colorado school districts, the State’s judicial system, and a number of local government entities (cities, towns, special districts, and one county). 
</blockquote>



PERA members serve across Colorado:



<ul>
<li>There are five divisions of PERA: State, School, Local Government, Denver Public Schools and Judicial. </li>



<li>Members in PERA’s State Division work for or retired from state agencies and instrumentalities of state government, as well as institutions of higher education.</li>



<li>Members in the School Division and the DPS Division are current and former teachers, school administrators, and other critical support personnel serving 900,000 students across 178 school districts.</li>



<li>Members in the Local Government Division are working for or retired from 140 cities, towns, a county, and a variety of special districts in Colorado.</li>



<li>Members in the Judicial Division, PERA’s smallest division, are the working and retired judges in district and county courts, as well as the Colorado Court of Appeals and the Colorado Supreme Court.</li>
</ul>



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="583" src="https://content.copera.org/wp-content/uploads/2019/05/February2019-1-1-1024x583.jpg" alt="" class="wp-image-44055" srcset="https://content.copera.org/wp-content/uploads/2019/05/February2019-1-1-1024x583.jpg 1024w, https://content.copera.org/wp-content/uploads/2019/05/February2019-1-1-300x171.jpg 300w, https://content.copera.org/wp-content/uploads/2019/05/February2019-1-1-768x437.jpg 768w, https://content.copera.org/wp-content/uploads/2019/05/February2019-1-1.jpg 1362w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Colorado PERA Membership as of February 2019</figcaption></figure>



These 600,000 PERA members and retirees, or one in 10
Coloradans, actively contribute to the quality of life we all enjoy. Here are
just a few examples of public employees doing important work that positively
affects all of us every day. 



<a href="http://www.canoncitydailyrecord.com/news/canoncity-local-news/ci_32523762/hundreds-register-take-part-pueblo-community-colleges-senior">Annual
“mini-college” for senior citizens in Pueblo draws 350 students</a> – <a href="http://www.canoncitydailyrecord.com">Canon
City Daily Record</a> 
Pueblo Community College (PCC) Fremont Campus has been conducting Senior Mini
College for 34 years. It takes dedication and commitment from each PCC Staff
member to help organize and plan this event. Many currently enrolled PCC
students have volunteered to help the Senior Mini College week participants.



<a href="http://www.journal-advocate.com/sterling-local_news/ci_29387651/department-human-services-supervisor-explains-welfare-fraud-investigations?source=most_viewed">How
the Department of Human Services investigates welfare fraud</a> – <a href="http://www.journal-advocate.com/">Sterling
Journal-Advocate</a> 
A fraud investigation can be triggered a number of ways: through an
anonymous letter or phone call, someone comes across something that the person
accidently put on their application that they lied to DHS about, or someone
sees something on social media.



<a href="https://content.copera.org/public-service-recognition-week/">Therisky business of trapping mountain lions</a> – <a href="file:///C:/Users/kaufmani/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/Y7DLXWRT/durangoherald.com">The
Durango Herald</a> 
Wildlife officials have trapped and killed five
mountain lions near a Colorado town after residents reported aggressive
behavior by the predators.



<a href="http://www.broomfieldenterprise.com/news/ci_32525310/womens-empowerment-event-inspires-young-women">Broomfield High School hosts an empowerment conference for young women</a> – <a href="https://www.broomfieldenterprise.com/">Broomfield Enterprise</a> The women’s leadership class at Broomfield High School, made up of about 27 female students, is supervised by Lena Carroll and Andrea Binion and has been in place about four years.



<a href="http://www.eptrail.com/estes-park-colorado-flood-2013/ci_32404797/sanitation-district-and-town-complete-critical-infrastructure-project">How multiple Estes Park agencies are upgrading the area’s infrastructure</a> – <a href="http://www.eptrail.com/">Estes Park Trail-Gazette</a> Through an Intergovernmental Agreement, the Upper Thompson Sanitation District (UTSD) and the Town of Estes Park (TEP) are partnering to complete a utility infrastructure project that will impact the Fish Creek Lift Station and Mall Road. The Fish Creek Lift Station and approximately 1,000 linear feet of 14-inch diameter cast iron force main was constructed in the mid-1970s.



<a href="https://peraontheissues.com/wp-content/uploads/2019/05/Public-Service-Recognition-Week-Governors-Proclamation.pdf">Governor Polis&#8217; Public Service Week Proclamation</a>

Public Service Recognition Week

<h2 class="wp-block-heading">A public service career addresses many of them</h2>



A growing amount of research reveals that women approach
retirement planning differently than men, and <a href="https://www.internationalwomensday.com/">International Women’s Day</a>
on March 8 marks a good opportunity to consider both the risks in retirement
that women disproportionately shoulder and ways that they can be prepared.



According to a 2018 report from Transamerica Center for
Retirement Studies, <a href="https://www.plansponsor.com/women-need-help-improving-retirement-confidence/">55
percent of women</a> fear outliving their retirement savings, compared
to 49 percent of men, and women are growing more concerned: <a href="https://www.plansponsor.com/women-concerns-retirement-outlook/">A survey from
the Nationwide Retirement Institute revealed</a> that in 2017, 31
percent of women anticipated that their post-work life would be better than
their pre-retirement life but that dropped to 26 percent last year.



These fears are well founded. Women live longer than men, to
the point that there are <a href="https://www.nextavenue.org/women-facing-financial-challenges-for-retirement/">5.7
million more</a> American women than men at age 65, and 67 percent of
the over-age-85 population is female. These and <a href="https://www.kiplinger.com/article/retirement/T037-C032-S014-retirement-planning-is-different-for-women.html">other
factors</a>, including lower average income and shorter average careers,
contribute to an increased risk for women of falling into poverty as they age.



Despite this seemingly grim information, there also are
signs of hope for women who are in, or nearing, retirement. In the 2018
election, <a href="https://content.copera.org/women-face-unique-challenges-in-retirement/">arecord number of women</a> were elected to Congress. According to Nancy
Altman, president of Social Security Works and chair of the Strengthen Social
Security coalition, this diversity in elected representatives is seen as <a href="https://www.forbes.com/sites/nancyaltman/2019/01/08/new-congress-will-hold-historic-hearings-on-expanding-social-security-and-medicare/#2e61ceaf6926">a
driving force behind</a> upcoming hearings and potential legislation
designed to strengthen retirement security and address health care programs and
affordability. 



Not only that, when women save and invest their money, they
tend to outperform men by an average of 40 basis points. They <a href="https://www.plansponsor.com/women-prepare-better-for-the-unexpected/">prepare
better</a> than men for unexpected events and more closely track their
daily expenses. They’re <a href="https://www.plansponsor.com/women-require-more-financial-planning-help/">more
open</a> to seeking the counsel of a financial adviser. (<a href="https://www.marketwatch.com/story/what-does-retirement-mean-for-women-2019-02-26">For
more about the issues women face</a> in this area, see <a href="https://retirementvoices.com/">Retirement Voices</a>,
an information-sharing project about retirement concerns designed for
late-career women.)



If these figures demonstrate anything, it’s that women who work
for an employer that offers a defined benefit plan such as PERA’s are far more
prepared for retirement than are average American women. Even if pay is low,
PERA members are saving for a future retirement distribution. This is important
because the proportion of female PERA members and retirees is 66 percent—including
a robust 74 percent who work in or have retired from the School and DPS Divisions—and
they have or are earning a retirement income that cannot be outlived and can be
passed on to survivors. They also have <a href="https://www.copera.org/women-face-unique-challenges-in-retirement" class="broken_link">health careoptions</a> that those who spend their careers in the private sector may
not have access to, as well as the ability to participate in low-cost voluntary
savings vehicles like <a href="https://www.copera.org/women-face-unique-challenges-in-retirement" class="broken_link">PERAPlus</a>.



Women who have chosen a career in public service in Colorado
have, almost by definition, set themselves on a productive path toward
retirement. To further strengthen their financial security, they should
continue to take advantage of the many ways PERA can help ensure a secure
retirement.

Women face unique challenges in retirement

For all the talk about how much public pensions cost state
and local governments—and by extension, taxpayers who don’t work in the public
service sector—the positive economic effects these plans have on virtually
every state and city in the country have received far less attention.



A new report by the <a rel="noreferrer noopener" aria-label="National Institute on Retirement Security (opens in a new tab)" href="https://www.nirsonline.org" target="_blank">National Institute on Retirement Security</a> (NIRS) provides a much clearer picture of just how significant this contribution is. On January 10th, NIRS released “<a rel="noreferrer noopener" aria-label="Pensionomics 2018: Measuring the Economic Impact of Defined Benefit Pension Expenditures (opens in a new tab)" href="https://www.nirsonline.org/reports/pensionomics-2018-measuring-the-economic-impact-of-defined-benefit-pension-expenditures/" target="_blank">Pensionomics 2018: Measuring the Economic Impact of Defined Benefit Pension Expenditures,</a>” which quantifies how much public service retirees spend in and around their communities. 



These amounts could hardly be more significant: In 2016,
retiree spending of pension benefits created $1.2 trillion of economic output
and supported about 7.5 million jobs across the U.S., which is almost 5 percent
of the country’s entire workforce. These funds also poured $202.6 billion into
federal, state, and local coffers in the form of taxes. 



About the results, NIRS executive director Diane Oakley
said, “Pension expenditures are especially vital for small and rural
communities where other steady sources of income may not be found if the local
economy lacks diversity.”



When retirees receive their monthly check, the ripple
effects begin. In 2016, almost $295 billion was paid to about 10.7 million
retired state and local public service workers and their beneficiaries. These
people then use this money to pay for goods and services such as food, health
care and retail products, and most of this everyday spending, of course,
happens where retirees live. The report concludes that each dollar paid in
pension benefits in 2016 supported $2.13 in total economic output nationwide. 



But that’s not all. By their nature, public pensions invest
much of what they receive as contributions from employees and employers, which
means that thanks to pensions’ strong long-term investment returns and the
shared funding model, in 2016, each taxpayer dollar that went to supporting
these pensions generated $8.48 in total economic output.



This already impressive return on investment has an even
more acute impact in Colorado, where 90 percent of the state’s retirees choose
to live after they end their careers instead of heading for retirement hotspots
such as Arizona or Florida. 



Economic and business analysis firm <a href="https://www.paceyecon.com/" target="_blank" rel="noreferrer noopener" aria-label="Pacey Economics (opens in a new tab)">Pacey Economics</a> calculated the economic impact of benefits paid to retirees in the Colorado PERA system, and found that these retirees generate about $6.5 billion in annual economic output on $4.1 billion in benefits paid, which supports about 35,000 non-public service jobs statewide. 



As the accompanying chart illustrates, in almost half the
counties in Colorado, PERA benefit distributions amount to at least 10 percent
of area payroll, and that number rises to more than 25 percent of payroll in
four counties. And per Oakley’s comments, Colorado’s more sparsely populated areas
see the greatest impact from these funds.



The political and economic discussions around public pensions are complex and thorny. But as these debates continue, it’s worth remembering what invaluable contributors they are to the national as well as local economies.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="834" src="https://content.copera.org/wp-content/uploads/2019/01/PayrollbyCountyMap_2018-2-1-scaled-1-1024x834.jpg" alt="" class="wp-image-44085" srcset="https://content.copera.org/wp-content/uploads/2019/01/PayrollbyCountyMap_2018-2-1-scaled-1-1024x834.jpg 1024w, https://content.copera.org/wp-content/uploads/2019/01/PayrollbyCountyMap_2018-2-1-scaled-1-300x244.jpg 300w, https://content.copera.org/wp-content/uploads/2019/01/PayrollbyCountyMap_2018-2-1-scaled-1-768x626.jpg 768w, https://content.copera.org/wp-content/uploads/2019/01/PayrollbyCountyMap_2018-2-1-scaled-1-1536x1251.jpg 1536w, https://content.copera.org/wp-content/uploads/2019/01/PayrollbyCountyMap_2018-2-1-scaled-1-2048x1668.jpg 2048w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">In almost half the counties in Colorado, PERA benefit distributions amount to at least 10 percent of area payroll, and that number rises to 25 percent of payroll in four counties. </figcaption></figure>

Why public pensions benefit everyone

The first leg of <a href="https://www.copera.org/changing-demographics-market-conditions-addressed-peratour" target="_blank" rel="noreferrer noopener" class="broken_link">PERAtour</a>, PERA’s statewide outreach initiative, concluded just last week.



During the inaugural leg of this two-part community engagement effort (the second phase of which will commence in the fall), PERA held 12 meetings in nine cities throughout Colorado, bringing together close to 1,000 PERA members, retirees, employers, and interested citizens in a factual dialogue about PERA’s current funded status and risk profile. The feedback gathered from these conversations, as well as ideas from policymakers and other stakeholders, will be consolidated and reviewed by the PERA Board of Trustees to inform any deliberations about changes to the PERA plan design. (If you were not able to attend an in-person meeting, there is still time to have your voice heard. Visit <a href="https://www.copera.org/changing-demographics-market-conditions-addressed-peratour" target="_blank" rel="noreferrer noopener" class="broken_link">www.peratour.org</a> to submit your comments, explore the issues being discussed, view a narrated version of the presentation shared at all community events, and follow the five-phase journey PERA is undertaking.)



PERA gleaned a number of valuable insights over the course of PERAtour, particularly on the principles and priorities members and retirees consider most pivotal to the PERA Board’s assessment of possible actions to take. The range of voices heard throughout the outreach effort also unveiled some central themes – communal attitudes, beliefs, perspectives – that are explored in further detail on the PERAtour site. Some of those include:



<ul>
<li>PERA beneficiaries demonstrate <a href="https://content.copera.org/one-stop-shop-peratour-changes-pera/" target="_blank" rel="noreferrer noopener">a deep commitment</a> to public service, as well as an ability to rally together to make decisions for the greater good. As one participant in Denver put it, “People choose to work in this sector because they enjoy giving service to our state. Our beloved Colorado benefits from all of us in public service.”</li>



<li>With the shifting demographics of today’s workforce, it is more important than ever for PERA to <a href="https://content.copera.org/one-stop-shop-peratour-changes-pera/" target="_blank" rel="noreferrer noopener">remain attractive</a> to a new generation of employees. One of the most important ways that participants feel PERA can engage with younger public service workers? Educate them about their retirement benefits. All too often, younger employees are simply unaware of the defined benefit plan.</li>



<li>While many of PERA’s beneficiaries have dedicated a substantial part—if not all—of their careers to public service, PERA should also benefit employees who <a href="https://www.copera.org/one-stop-shop-peratour-changes-pera" target="_blank" rel="noreferrer noopener" class="broken_link">spend less time</a> in the system. Thanks to PERA’s hybrid defined benefit plan design, it does. (You can read more about this feature <a href="https://content.copera.org/commitment-public-service-themes-guide-peratour/" target="_blank" rel="noreferrer noopener">here</a>.)</li>
</ul>



These themes reflect just some of the learnings PERA’s community outreach effort has afforded thus far. Given the significant footprint of PERA across the state, it is important for a variety of voices to be involved in the conversation about potential changes that will ensure PERA continues to be a sustainable retirement plan for Colorado’s public employees.

Tag Archives:

Honoring the Important Work of Colorado’s Public Employees

Recognizing Public Service—Work That Brings Us Together

Public Service Recognition Week

Women face unique challenges in retirement

Why public pensions benefit everyone

Commitment to Public Service, Other Themes Guide PERAtour

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