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.

October is National Retirement Security Month, providing a great opportunity as the year winds down to take a look at one’s finances, goals, and plans for retirement.



With recent research showing that many of us <a href="https://www.usatoday.com/story/money/2023/10/12/how-long-does-retirement-last/71074947007/" target="_blank" rel="noreferrer noopener">greatly underestimate how long we’ll live</a>, it’s important to plan ahead and make sure you’re on track to reach your retirement goals.



If you’re a member of the PERA Defined Benefit Plan, you’re already set for lifetime income in retirement. But if you’d like to do more to ensure your retirement security, there are steps you can take.



PERA has been sharing tips throughout October on <a href="https://www.facebook.com/ColoradoPERA" target="_blank" rel="noreferrer noopener" class="broken_link">Facebook</a> and <a href="https://twitter.com/ColoradoPERA" target="_blank" rel="noreferrer noopener">Twitter</a>, and we’re wrapping up National Retirement Security Month with some more helpful information here.



Consider some of the items below if you’re taking stock of your financial health this month:



<ul>
<li>Save additional money in a PERAPlus plan: PERA offers a voluntary <a href="https://www.copera.org/peraplus-401-k-457-plans" target="_blank" rel="noreferrer noopener">PERAPlus 401(k) Plan</a> to all members, and some PERA employers also offer the <a href="https://www.copera.org/peraplus-401-k-457-plans" target="_blank" rel="noreferrer noopener">PERAPlus 457 Plan</a>. Both plans allow you set aside additional pre-tax dollars (there’s also a Roth option) on top of what you contribute to your PERA Defined Benefit Plan or PERA Defined Contribution Plan account.</li>



<li>Make a savings plan: A recent survey found that a surprising number of Americans <a href="https://content.copera.org/national-retirement-security-month-highlights-importance-of-planning-for-future/" target="_blank" rel="noreferrer noopener">have no savings account at all</a>. Saving money is easier said than done, but making a plan to save even a little bit at a time can make a huge difference (not to mention you can take advantage of historically high rates on savings accounts right now).</li>



<li>Take full advantage of your HSA, if you have one: If you have a high-deductible health plan with a health savings account (HSA), you might not be aware of its retirement-planning benefits. In addition to setting aside pre-tax dollars for health care expenses (one of the biggest expenses in retirement), your HSA balance is available to spend on other needs once you reach age 65. Your HSA is also exempt from required minimum distributions (RMDs).</li>



<li>Don’t forget estate planning: Estate planning isn’t just for the wealthy, and it’s not just for deciding who inherits your assets. Good estate planning can also make sure your loved ones <a href="https://www.kiplinger.com/retirement/overlooked-benefits-of-estate-planning" target="_blank" rel="noreferrer noopener">know what to do if you’re no longer able to care for yourself</a>.</li>



<li>Download the new PERA mobile app: The <a href="https://www.copera.org/pera-mobile-app" target="_blank" rel="noreferrer noopener">PERA app</a> allows members to access important information like account balance, projected monthly benefit, and service credit history, as well as fill out forms (and even apply for retirement) from their mobile phone.</li>
</ul>



Regardless of where our members are in their public service career, we have a lot of helpful resources on PERA benefits available online, including:



<ul>
<li><a href="https://www.copera.org/pera-frequently-asked-questions" target="_blank" rel="noreferrer noopener">Frequently asked questions (FAQs)</a></li>



<li><a href="https://www.copera.org/quick-tip-videos" target="_blank" rel="noreferrer noopener">Quick Tip videos</a></li>



<li><a href="https://www.copera.org/webinars" target="_blank" rel="noreferrer noopener">On-demand and live webinars</a></li>



<li><a href="https://www.copera.org/financial-wellness-library" target="_blank" rel="noreferrer noopener">Financial wellness articles</a></li>
</ul>

National Retirement Security Month Highlights Importance of Planning for Future

This is the second in a series of articles for National Retirement Security Month exploring how Colorado PERA provides retirement security to public employees.



<h4 class="wp-block-heading">Stability amid uncertainty</h4>



At a time when many people have struggled to save for retirement on their own, PERA has continued to pay retirement benefits that support retirees and Colorado’s economy.



When the COVID-19 pandemic began in early 2020, businesses shut their doors, stock markets dropped, and many people found themselves facing the loss of income and savings. That economic disruption was especially painful for older Americans who rely on their savings for income in retirement: <a href="https://www.commonwealthfund.org/publications/surveys/2021/sep/impact-covid-19-older-adults" class="broken_link">A recent survey by The Commonwealth Fund</a> found that in the United States, 19 percent of adults 65 and older used up all or most of their savings or lost a source of income during the pandemic. That’s a higher percentage than other high-income countries included in the survey.



For public sector employees who participate in a defined benefit pension plan like what PERA offers, benefit payments have offered some financial stability during otherwise uncertain times.



<h4 class="wp-block-heading">The value of reliable income</h4>



Retirees who rely on retirement plans like 401(k)s or their personal savings have to carefully track their withdrawals during retirement to make sure they don’t overspend and deplete their accounts. But in a defined benefit retirement plan, retirees receive a monthly payment that isn’t determined by their account balance, and a retiree cannot outlive their benefit.



While the COVID-19 pandemic and its effects have been felt far and wide, PERA continued to pay monthly benefits to the thousands of retirees in Colorado who rely on them.



In 2020, PERA paid more than $4.2 billion in pension benefits to more than 107,000 retirees living in Colorado, with an average monthly benefit of $3,204. Those benefit payments translate to billions of dollars in spending, supporting local businesses and jobs. In 2019, <a href="https://content.copera.org/pera-benefits-provide-economic-stability-during-uncertain-times/">a report by Boulder-based Pacey Economics</a> calculated that retiree spending in Colorado supported more than 32,000 jobs.



The stabilizing effect of PERA benefits is especially important in Colorado’s rural areas, where retiree income makes up a greater share of area payroll. In 26 Colorado counties (nearly all rural), these distributions represent at least 10 percent of the county’s total payroll.



In addition, PERA had more than $808 million invested in Colorado-based companies, partnerships, and assets as of the end of 2020. Those investments include equity of companies headquartered in Colorado and real estate investments. PERA also employs investment managers with operations and employees in the state.



Together, PERA benefits and investments strengthen Colorado’s economy and help provide stability during periods of uncertainty. And although changes to PERA — including increased contributions and a decreased Annual Increase — have been difficult for everyone, they have resulted in a more resilient plan that is able to continue to pay monthly lifetime benefits while meeting its funding goal.

PERA Benefits Provide Economic Stability During Uncertain Times

This is the first in a series of articles for National Retirement Security Month exploring how Colorado PERA provides retirement security to public employees. 



October is National Retirement Security Month, and the events of the past year and a half have made clear the importance of planning for the future.



<h4 class="wp-block-heading">The value of a defined benefit pension</h4>



Retirement security is a major concern to many Americans right now. A recent survey by the National Institute on Retirement Security found Millennials and members of Generation X <a href="https://peraontheissues.com/survey-millennials-gen-x-especially-pessimistic-about-retirement-prospects/" target="_blank" rel="noreferrer noopener">are especially worried about saving for retirement</a> and are more likely to be concerned about how the COVID-19 pandemic might have affected their retirement plans.



According to the survey, members of all age groups agree that the average worker cannot save enough money for retirement on their own and it’s important to provide for retirees. To that end, the generations agree on the importance of defined benefit retirement plans — also known as pensions — like what Colorado PERA offers. With a pension, retirees receive a lifetime benefit they can’t outlive.



Earlier this year, we surveyed retired PERA On The Issues readers and asked them what the security of a PERA benefit means to them. Continue reading for their perspectives and their advice for preparing for the future.



<h4 class="wp-block-heading">What does your PERA benefit mean to you?</h4>



For many retirees, the value of a defined benefit is the reliable income.



Allen W., a PERA retiree now living in Wisconsin, said: “[PERA] provides regular monthly income along with Social Security, and my personal investments,” he said. “Without PERA I would have to reduce my standard of living.”



For Mike M., a retired educator from Westminster, quality of life is key: “A PERA retirement plan has allowed me to do the things I never had the time to do while working,” he said. “Travel and recreation and enjoying time with friends and family have been a big part of my life during retirement. A secure retirement plan provides me with the financial resources to do the things I always wanted to do.”



Walter R. of Colorado Springs said he appreciates the peace of mind that comes from knowing his loved ones will be taken care of: “The retirement plan truly helps us,” he said. “In addition, I elected Option 3 which will ensure my spouse continues to receive our retirement pension when I pass.”



<h4 class="wp-block-heading">What advice would you give to others?</h4>



PERA retirees said they’ve learned some important lessons on their journey toward retirement. Mark J., a retiree from Colorado Springs, said his advice for younger workers is to learn as much as they can about their benefits.



“Learn all of the PERA plan details and attend all PERA briefings long before you plan to retire,” he said.



Rob W. of Salida said he learned the importance of saving additional money for retirement: “Enroll in the PERA Defined Benefit plan and start saving in a 401(k) or 457 plan the first month of your employment,” he said.



For others, the advice is simple: Stay the course.



“If you are a working PERA member, stay in PERA if you are in a job you enjoy doing,” Mike M. said. “A retirement plan such as PERA can provide you with retirement security at a time when you need it in later years.”



We’d love to hear from you — if you’d like to share your story about what your PERA benefit means to you, <a href="mailto:POTImail@copera.org" target="_blank" rel="noreferrer noopener">click here</a>.

What ‘Retirement Security’ Means to PERA Members

In this story:



<ul>
<li>Members of Generation X and Millennials are more concerned than other generations about their ability to save enough for retirement</li>



<li>Younger generations are also more likely to be worried about the effects of the pandemic on their retirement planning</li>



<li>Generations agree on the value of defined benefit plans like Colorado PERA</li>
</ul>



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



A <a href="https://www.nirsonline.org/reports/generations/" target="_blank" rel="noreferrer noopener">recent survey</a> by the National Institute on Retirement Security found that Americans who fall into the Generation X and Millennial categories are more pessimistic than older generations about their retirement prospects and are more likely to be concerned about how the COVID-19 pandemic might have affected their retirement plans.



The survey also found the various age groups have some important points of agreement, including the overall state of retirement security and the need for greater access to retirement plans like those offered by Colorado PERA.



<h4 class="wp-block-heading">Where the generations differ in retirement outlooks</h4>



The National Institute on Retirement Security surveyed 1,203 people in December 2020. For the purpose of the survey, Millennials were defined as those who were 25 to 43 years old, Generation X as 44 to 55 years old, Baby Boomers as 56 to 74, and the Silent Generation as anyone 75 and older.



NIRS found that while the generations agree that there’s a retirement crisis in the United States, Generation X and Millennials have generally more pessimistic views of the situation. Seventy-two percent of Millennials and 59 percent of Generation X said they’re concerned about achieving a financially secure retirement, versus 43 percent of Baby Boomers and 26 percent of the Silent Generation.



Additionally, 64 percent of Millennials and 54 percent of Generation X said they’re more concerned about their retirement in light of the COVID-19 pandemic, while 42 percent of Boomers and 25 percent of the Silent Generation said the same.



The younger generations were also far more likely to have dipped into their emergency or retirement savings during the pandemic, according to the survey.



<h4 class="wp-block-heading">Where the generations agree</h4>



The <a href="https://www.nirsonline.org/reports/generations/" target="_blank" rel="noreferrer noopener">NIRS survey</a> found broad agreement across the generations on the challenges workers face while saving for retirement, with large majorities of each group saying the average worker cannot save enough money for retirement on their own.



The four generations also agree that it’s important to provide for retirees. Majorities of each group support Social Security and would be in favor of increasing contributions. Each group also agreed on the importance of defined benefit retirement plans, also known as pensions, which provide retirees with a lifetime benefit they can’t outlive. Eighty-one percent of Millennials described their views of pensions as favorable, and 68 percent of the Silent Generation said the same. All four generations agreed that every American worker should have access to a pension plan.



<h4 class="wp-block-heading">Where PERA factors in</h4>



In Colorado, the state’s largest workforce — public employees like state workers, teachers, corrections officers, snow plow drivers and others who serve our state — has access to a pension through Colorado PERA.<ins></ins>



PERA is a <a href="https://content.copera.org/survey-millennials-gen-x-especially-pessimistic-about-retirement-prospects/" target="_blank" rel="noreferrer noopener">hybrid defined benefit plan</a>, providing a defined benefit pension to most members and offering a choice between the defined benefit plan and defined contribution plan to others. Of those given the choice between the DB and DC plans, 9 out of 10 choose the DB option.



The average PERA member retires at approximately 59 years old and lives until their early 80s, receiving benefit payments from PERA every month while they’re retired. In 2020, PERA paid more than $4.2 billion in pension benefits to more than 107,000 retirees living in Colorado, with an average monthly benefit of $3,204. At a time when many workers are anxious about their ability to save enough for retirement, defined benefit plans like PERA not only provide peace of mind in retirement, they also serve as an effective recruiting tool for public employers looking to attract and retain employees.

Survey: Millennials, Gen X Especially Pessimistic About Retirement Prospects

In this story:



<ul><li>In a recently published study, a majority of Americans agree on how to combat retirement insecurity</li><li>Responses indicate retirees need to know more about managing investments to last through retirement</li><li>A majority of those surveyed said access to a defined benefit program brings security that can&#8217;t be found in 401(k)-style plans alone</li><li>In particular, DB plans help offset market risk and the risk of outliving savings</li></ul>



<hr class="wp-block-separator"/>



“What do Americans think about retirement security?”



This was the central question to a <a href="https://www.nirsonline.org/wp-content/uploads/2021/02/FINAL-Retirement-Insecurity-2021-.pdf" target="_blank" rel="noreferrer noopener">study</a> conducted by the National Institute on Retirement Security. The study took place in 2020 and involved participants from across the country.



<a href="https://peraontheissues.com/national-attitudes-on-retirement-security-part-1/" target="_blank" rel="noreferrer noopener">Part 1 of this story</a> covered the issues that survey participants raised:



<ul><li>67% of respondents said the U.S. faces a retirement crisis</li><li>56% are concerned they won’t become financially secure, and 58% said it’s getting harder as time goes on</li><li>68% said they aren’t able to save enough to guarantee a secure retirement</li></ul>



In addition to highlighting concerns, the study also shed light on ideas and solutions.



<h4 class="wp-block-heading">Better Access to Information</h4>



More than 70% of those surveyed agreed: “the average retiree does not know enough about managing investments to be able to make their retirement savings last.”



This insight could mean that retirees need or want more opportunities to enhance their financial literacy.



Some organizations, including PERA, offer educational opportunities to members and customers in the form of workshops, webinars, and online tools. But not all do.



Furthermore, 55 million Americans do not even have access to the retirement savings plans that often come with these educational opportunities.



<h4 class="wp-block-heading">Limit Uncertainty in Retirement</h4>



Even the best access to sound financial information can’t eliminate certain risks:



<ul><li>Outliving your life expectancy – <a href="https://www.forbes.com/sites/wadepfau/2019/12/06/changing-risks-in-retirement-part-two-unknown-longevity/?sh=a120b57652bb" target="_blank" rel="noreferrer noopener">and your savings</a></li><li>Experiencing underperforming market returns, particularly <a href="https://www.kiplinger.com/article/retirement/t037-c032-s014-retirees-can-t-overlook-sequence-of-return-risk.html" target="_blank" rel="noreferrer noopener">at the beginning of retirement</a> &nbsp;</li><li>Reduced ability to manage money as you age</li></ul>



In the face of these uncertainties, survey participants said that defined benefit plans are a good solution for retirement planning compared to relying completely on self-directed investing plans:



<ul><li>54% said they would trade savings for guaranteed income.</li><li>65% agreed that “pensions do more to help workers achieve a secure retirement as compared to retirement savings plans such as 401(k)s.”</li><li>75% said: “all workers should have access to a pension plan so they can be independent and self-reliant in retirement.”</li></ul>



<h4 class="wp-block-heading">Final Thoughts</h4>



Retirement looks different for everyone. But obtaining a sense of security is a goal that nearly all retirees share.



Different financial tools work together to contribute to increased security:



<ul><li>Access to quality financial education can lead to more informed decision-making and planning</li><li>Access to self-directed retirement plans, including the 401(k) and 457 options PERA members have with PERAPlus, give flexibility about contributions, investments, and withdrawals</li><li>Access to a defined benefit plan like PERA members have leads to a stream of lifetime income, which helps offset many of the risks retirees face</li></ul>



Voicing support for policies that promote financial security helps ensure that retirees are able to spend their retirement years — whatever that looks like for them — in confidence.

National Attitudes on Retirement Security, Part 2

October is National Retirement Security Month. The aim: to increase understanding and emphasize the importance of planning for retirement, particularly for public employees. 



Learn about the history behind this campaign, details and resources available this year, and more below.



<ul><li>The National Association of Government Defined Contribution Administrators (NAGDCA) has been raising awareness of retirement preparedness since 2006. Originally conceived of as National Retirement Security Week, the campaign grew this year and now spans the entire month of October.</li><li>The United States Senate unanimously approved a <a href="https://www.nagdca.org/wp-content/uploads/2020/10/SRes743-NRSM-2020.pdf" target="_blank" rel="noreferrer noopener">resolution</a> acknowledging National Retirement Security Month. The resolution comes “with the goal of increasing the retirement savings and personal financial literacy of all people in the United States and enhancing the retirement security of the people of the United States.”</li><li>Anyone can register for <a href="https://icmarc.secure.force.com/events?SiteId=a0l3a00000Hw8XhAAJ" target="_blank" rel="noreferrer noopener">webinars</a> covering a variety of retirement-planning topics. ICMA-RC, an organization founded in 1972 to help public sector employees build retirement security, is hosting.</li><li>In addition to webinars, ICMA-RC created some of the most visually interesting <a href="https://www.icmarc.org/retirementmonth/for-participants/interactive-calculators.html" target="_blank" rel="noreferrer noopener">retirement calculators</a> you’re likely to come across.</li></ul>



Retirement planning is a year-round activity at PERA, as these stats from 2019 show.



<ul><li>The number of times PERA members logged into their <a href="https://www.copera.org/how-to-balance-saving-for-retirement-with-other-savings-goals" target="_blank" rel="noreferrer noopener">PERA account </a>topped 1.6 million.</li><li>Members were busy projecting future income as they planned their retirement budget. They ran more than 323,000 calculations using the monthly retirement benefit calculator on copera.org.</li><li>More than 29,000 attended a <a href="https://www.copera.org/members/webinars" target="_blank" rel="noreferrer noopener">presentation</a> led by PERA’s Field Education team.</li><li>PERA’s benefit counsellors held 4,560 <a href="https://content.copera.org/are-public-sector-workers-satisfied/" target="_blank" rel="noreferrer noopener">individual appointments</a> with members, most of whom are nearing retirement.</li></ul>

Retirement Planning in the Spotlight this October

Melissa Vigil moved to Fort Collins to earn a Ph.D. in
organic chemistry. Three years later, those plans changed. “I
realized that while I love chemistry and science in general, I wasn&#8217;t a happy
lab rat,” she said. “I switched to teaching to share my passion for science
with students.” 



Eleven years later, Melissa is still teaching at Fossil Ridge High
School, part of Poudre School District. 



Like many Coloradans, Melissa spends a lot of time outside—white
water rafting, skydiving, hiking, snowshoeing, shooting, stand up paddle
boarding, swimming, and more. And, like many who work in public service
careers, she measures success by the impact she has on others. “I feel most
proud when I&#8217;ve done something tangible when I leave for the day,” she said. “Whether that’s having a successful parent-teacher
conference to teach a kid a life lesson bigger than a science concept, finally
getting caught up on grading, or creating a new way to engage students.”



Melissa’s career outlook and values are shared by hundreds of thousands of state and local employees across the country. A recent <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.nirsonline.org/2019/11/amid-worker-shortages-new-research-examines-state-local-employee-views-on-their-jobs-pay-and-benefits/" target="_blank">study</a> published by the National Institute on Retirement Security (NIRS) collected and analyzed data surrounding the sentiments public sector workers have about their jobs and the compensation they receive for it.



What Do
Public Sector Workers Think About Their Jobs?



State
and local employees like helping others, and they like their jobs…



Nearly 90 percent of state and local employees reported being satisfied
with having the ability to serve the public. Although 71 percent say that their
jobs are stressful, 85 percent are satisfied with their jobs.



In Colorado, 90 percent of state employees report feeling that the work they do is important, according to a <a href="https://content.copera.org/are-public-sector-workers-satisfied/" target="_blank" rel="noreferrer noopener" label=" (opens in a new tab)">2017 study</a>.



…Yes, even
Millennials



Amid reports of Millennials hopping from job to job, the NIRS study
showed that 84 percent of Millennials working in state and local government are
satisfied with their current job. Eighty-five percent said they plan to stay at
their current employer until they are eligible for retirement or can no longer
work. 



They
like their jobs despite a mixed view on pay



Twenty-two percent reported their salaries being very competitive,
and 80 percent say they could earn a higher salary in the private sector.



A
defined benefit plan is a major factor in retention



Ninety-four percent of state and local employees have favorable
views of defined benefit pensions. Fifty-eight percent said that moving them
from a pension and into an individual retirement plan would make them more
likely to leave their job. And those Millennials: 74 percent said a pension
benefit is a major reason they chose a public sector job.



The mission of Colorado PERA is to promote long-term financial security for our membership. The passage of Senate Bill 18-200 puts PERA on the path to become <a href="https://www.copera.org/trend-states-make-adjustments-to-retiree-cost-of-living-payments" class="broken_link">fully fun</a><a rel="noreferrer noopener" label="d (opens in a new tab)" href="https://www.copera.org/trend-states-make-adjustments-to-retiree-cost-of-living-payments" target="_blank" class="broken_link">d</a><a href="https://www.copera.org/trend-states-make-adjustments-to-retiree-cost-of-living-payments" class="broken_link">ed</a> within 30 years. 



Retirement
Security in Colorado



Melissa Vigil loves teaching, but she doesn’t think she’ll teach
forever. She said that teaching is a demanding profession. “I want to be able to retire at an age
where I&#8217;m still fighting to give students my best,” she said. “And selfishly,
I&#8217;d like to retire at an age where I can enjoy my retirement. My husband and I
have a long list of places we would love to travel to!” 



As a result, she said “it means everything to be able to rely on a
secure retirement.” But planning for retirement isn’t always easy. “I, like
many people, find it a bit overwhelming,” she said. “What is most helpful for
me is a two pronged approach—some electronic and some in-person information.”



Preparing for retirement isn’t something you do once. Learning about retirement takes place throughout a person’s career. To that end, thousands of people take advantage of PERA’s <a rel="noreferrer noopener" label=" (opens in a new tab)" href="https://content.copera.org/are-public-sector-workers-satisfied/" target="_blank">face-to-face educational opportunities</a> and <a href="https://www.copera.org/members/webinars" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">webinars</a> every year. 



The
Importance of Understanding the Public Sector Mindset



The trends highlighted in the national study mirror those found in
Colorado. “It’s clear from the research that public service is important to
state and local workers like teachers, nurses, police officers, and
firefighters,” said Dan Doonan, NIRS executive director. Driven by a sense of
purpose, state and local workers often accept lower salaries than they could
earn in the private sector. “Understanding at a deep level these employee
preferences and concerns will best position state and local policymakers to
recruit and retain qualified, experienced employees that taxpayers depend
upon.”

Are public sector workers satisfied?

Two members of
PERA’s leadership team have recently been selected by Governor Polis to serve on
Colorado statewide boards impacting private-sector retirement security and
state employees. These appointments underscore PERA executives’ retirement,
investment, financial, and human resource administration knowledge.



Colorado PERA
Chief Investment Officer Amy C. McGarrity was appointed to the <a href="http://leg.colorado.gov/bills/sb19-173">Colorado Secure Savings Plan
Board</a>, which studies the feasibility of creating the
Colorado Secure Savings Plan and other appropriate approaches to increase the
amount of retirement savings by Colorado’s private sector workers. McGarrity
was appointed to serve as a representative with expertise in investment or
retirement savings plan administration. Her term will expire on July 1, 2021.



“PERA has an
excellent track record when it comes to designing supplemental retirement
savings vehicles like the <a href="https://www.copera.org/recap-of-pera-boards-september-meeting" class="broken_link">PERAPlus 401(k) and 457
Plans</a> to help public sector workers increase their
retirement savings,” McGarrity said. “I’m honored to be appointed to the
Colorado Secure Savings Board, and look forward to applying my background and
passion to improving retirement security for all Coloradans.” 



See this PERA on the Issues post for more on the
Secure Savings Plan Board: <a href="https://content.copera.org/colorado-pera-chief-investment-officer-and-internal-audit-director-appointed-to-state-boards/">Colorado
passes private sector retirement savings plans study</a>.



Internal Audit
Director Sarah Wager was appointed by Governor Polis to the <a href="https://www.colorado.gov/pacific/spb/general-information">State
Personnel Board</a> in June. The State Personnel Board
adopts, amends, and repeals the procedures concerning
the State personnel system. Her term on the Board expires June 30, 2022.



Wager
noted, “I’ve worked within the State Personnel System for nearly 25 years, as
an employee, a supervisor, a member of executive leadership, and have been
responsible for overseeing human resource activities at a State agency. I am
excited and honored to use my knowledge of the State Personnel System and
employment matters impacting State employers and employees and to serve on this
Board and contribute to the Board’s important mission.”&nbsp; 



Colorado
PERA is known for its expertise on critical issues impacting the well-being of
public workers and retirement security of all Colorado residents. In their
roles on state boards, McGarrity and Wager will continue to support sound public
policy in their respective areas of expertise to the benefit of government
employees and all Coloradans.

Colorado PERA Chief Investment Officer and Internal Audit Director Appointed to State Boards

<blockquote class="wp-block-quote">
New Pennsylvania study considers increased public assistance, decreased economic activity resulting from insufficient retirement savings.
</blockquote>



Insufficient retirement savings will cost the Commonwealth of Pennsylvania $14.3 billion in state assistance by 2030, according to a new <a href="https://www.patreasury.gov/pdf/Impact-Insufficient-Retirement-Savings.pdf" target="_blank" rel="noreferrer noopener">study</a> from <a href="https://www.copera.org/lack-of-retirement-savings-will-cost-pennsylvania-14-3-billion-by-2030" target="_blank" rel="noreferrer noopener" class="broken_link">Pennsylvania State Treasurer Joe Torsella</a>. The study quantified the fiscal and economic impacts of insufficient retirement savings, considering both increased state public assistance costs and loss of economic activity due to reduced tax revenue, household spending, and jobs.



The study notes that the ability of elderly households to maintain their living standards during retirement has significant implications not just on seniors’ quality of life but also for the state’s economic conditions and fiscal situation. <a href="http://www.post-gazette.com/business/money/2018/01/26/Study-finds-14-3-billion-hit-coming-as-Pa-residents-lack-retirement-savings-Joe-Torsella/stories/201801260124" target="_blank" rel="noreferrer noopener">The study determined</a> that Pennsylvania spent about $702 million in public assistance due to insufficient retirement savings and lost about $70 million in tax revenue in 2015 alone.



As <a href="https://www.nirsonline.org/reports/win-win-pensions-efficiently-serve-american-schools-and-teachers/" target="_blank" rel="noreferrer noopener">recent</a> <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">studies</a> have shown, public sector retirement models <a href="https://content.copera.org/lack-of-retirement-savings-will-cost-pennsylvania-14-3-billion-by-2030/" target="_blank" rel="noreferrer noopener">including the Colorado PERA Hybrid Defined-Benefit Plan</a> provide the most efficient retirement savings, where each dollar saved “<a href="https://www.nirsonline.org/2017/10/pensions-are-critical-tool-for-recruiting-retaining-teachers-offer-best-path-to-retirement/" target="_blank" rel="noreferrer noopener">provides nearly twice the amount of retirement income than money invested in an individual savings plan because of lower costs and sharing key risks</a>.”



An <a href="http://www.philly.com/philly/opinion/editorials/pennsylvania-retirement-savings-plan-joseph-torsella-editorial-20180212.html" target="_blank" rel="noreferrer noopener">editorial</a> from the <a href="http://www.philly.com/inquirer" target="_blank" rel="noreferrer noopener">Philadelphia Inquirer</a> cited Treasurer Torsella’s study, noting that the costs of state support for elderly poor Pennsylvanians are crowding out other beneficial spending: “money that could support schools, parks, and infrastructure. And if senior citizens had more secure retirements, they’d be putting more money into the economy.”



Torsella further explained when releasing the study, “insufficient retirement savings will have far-reaching consequences that go well beyond individual implications. We can find a commonsense solution for Pennsylvanians to save now, or we can pay a steep price in increased budget deficits and lost economic activity later.”

Lack of retirement savings will cost Pennsylvania $14.3 billion by 2030

A digest of timely information and insight about finance, investing, and retirement.



<a href="http://www.latimes.com/opinion/op-ed/la-oe-nari-rhee-teacher-pensions-20170718-story.html" target="_blank" rel="noreferrer noopener">If someone tells you your kid’s teacher would be better off with a 401(k) than a pension, don’t believe it</a>&nbsp;|&nbsp;<a href="http://www.latimes.com" target="_blank" rel="noreferrer noopener">Los Angeles Times</a>



Teachers across the country are facing aggressive political attacks on their pensions. Most classrooms in California are occupied by long-term teachers who count on traditional pensions as their main source of financial security retirement. And California is fairly typical in terms of average teacher experience. Research shows that by the time most active teachers leave service – in their early 50s or later – they will be far better off with their pensions than they would have been with a 401(k).



<a href="http://time.com/money/4860595/how-to-retire-wealthy/" target="_blank" rel="noreferrer noopener">You’re more likely to retire wealthy if you do this one thing</a>&nbsp;|&nbsp;<a href="http://www.time.com/money" target="_blank" rel="noreferrer noopener">Time-Money</a>



Wouldn’t it be great if there was one simple thing you could do to help you better prepare for retirement and make you feel more confident about your prospects for financial security at the same time? Well, there is: Put your retirement plan in writing.



<a href="http://www.plansponsor.com/Social-Security-Faring-No-Better-in-2017/" target="_blank" rel="noreferrer noopener">Social Security faring no better in 2017</a>&nbsp;|&nbsp;<a href="http://www.plansponsor.com" target="_blank" rel="noreferrer noopener">PlanSponsor</a>



Social Security funds are projected to become depleted by 2034, the <a href="http://www.plansponsor.com/Social-Security-Trust-Fund-Still-Projected-to-Last-Through-2034/" target="_blank" rel="noreferrer noopener">same projection as last year</a>, according to an <a href="https://www.ssa.gov/oact/tr/2017/index.html" target="_blank" rel="noreferrer noopener">announcement</a> from the Social Security Board of Trustees. The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds are projected to have 77 percent of benefits payable at that time. The Disability Industry Trust Fund is projected to become depleted in 2028, extended by five years from last year’s estimate of 2023, with 93 percent of benefits payable.



<a href="http://www.cnbc.com/2017/07/18/the-us-is-losing-ground-to-other-nations-on-retirement-security.html" target="_blank" rel="noreferrer noopener">The U.S. is losing ground when it comes to retirement security</a>&nbsp;|&nbsp;<a href="http://www.cnbc.com" target="_blank" rel="noreferrer noopener">CNBC</a>



Among the leading nations for retirement security, the United States didn’t even crack the top 15, according to the <a href="https://www.copera.org/retirement-roundup-would-401k-better-deal" target="_blank" rel="noreferrer noopener" class="broken_link">2017 Global Retirement Index</a> by Natixis Global Asset Management. Europe continued to dominate the top spots.



<a href="https://www.nytimes.com/2017/07/21/your-money/retirement-planning-advice.html" target="_blank" rel="noreferrer noopener">3 things I should have said about retirement planning</a>&nbsp;|&nbsp;<a href="http://www.nytimes.com" target="_blank" rel="noreferrer noopener">The New York Times</a>



Looking back on a career giving advice about saving for retirement, more empathy and more real-world perspective could go a long way. The advice itself – to start young, save aggressively and diversify – might not change, except for one thing: no matter how much money you think you are going to need, save another 15 percent, just in case.



<a href="http://squaredawayblog.bc.edu/squared-away/mid-sized-employer-meets-big-401k-goal/" target="_blank" rel="noreferrer noopener">Mid-sized employer meets big 401(k) goal</a>&nbsp;|&nbsp;<a href="http://squaredawayblog.bc.edu/" target="_blank" rel="noreferrer noopener">Squared Away Blog</a>



Peggy Zembower, the human resources director at an auto dealership, was dismayed when she saw that long-time employees had never increased their retirement saving above the measly 1 percent of pay they’d started at. So she implemented recommendations like automatic enrollment in the plan and auto-escalation of the amount saved over time. Her work has paid off and Thomas Automotive, a mid-sized company with 280 full- and part-time workers, has increased participation in its 401(k) retirement savings plan from 53 percent to 87 percent of employees.

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