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.

Winter is nearly over (according to the calendar, at least), and state lawmakers in Denver are more than halfway through the 120-day Colorado General Assembly. In Washington, DC, senators and representatives from across the country are well into their own legislative work in Congress.



Some of that important legislative work pertains to public employees and their retirement benefits. Here we discuss key actions lawmakers have taken so far in 2023, as well as what may still be ahead.



<h4 class="wp-block-heading">Colorado legislation</h4>



So far this session, state lawmakers have introduced more than 400 bills, seven of which apply directly to Colorado PERA.



Four of those bills have been postponed indefinitely. That means the bill is no longer under consideration and these will not make it to the House or Senate floor for a vote. This can happen if lawmakers decide a bill needs more work or doesn’t have the support to pass.



Several other bills remain under consideration and are working their way through the process in the state legislature. Included in those bills is <a href="https://leg.colorado.gov/bills/sb23-056" target="_blank" rel="noreferrer noopener">SB23-056</a>, which aims to fully recompense PERA for the state’s missed 2020 payment of $225 million to PERA. Legislators <a href="https://peraontheissues.com/colorado-lawmakers-pass-bill-making-up-225m-payment-to-pera/" target="_blank" rel="noreferrer noopener">passed a bill last year</a> that aimed to make up that payment, and Gov. Jared Polis signed it into law. This new bill aims to pay PERA the remaining shortfall of $35.05 million.



Other bills currently under consideration include <a href="https://leg.colorado.gov/bills/sb23-016" target="_blank" rel="noreferrer noopener">SB23-016</a>, which would require PERA to include in its annual&nbsp;<a href="https://www.copera.org/investment-stewardship" target="_blank" rel="noreferrer noopener">Investment Stewardship Report</a>&nbsp;a description of climate-related investment risks, impacts and strategies, and <a href="https://leg.colorado.gov/bills/hb23-1176" target="_blank" rel="noreferrer noopener">HB23-1176</a>, which would create a new defined contribution plan for members of PERA’s School and Denver Public Schools divisions.



<blockquote class="wp-block-quote">
READ MORE: <a href="https://peraontheissues.com/2023-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">2023 Proposed Legislation Status</a>
</blockquote>



As we saw last year, legislative work can continue all the way up to the last minute of the session, so there’s still plenty ahead. That includes the Long Bill, which lays out the State’s budget and spending for every state department and program for the next fiscal year. The Long Bill will be introduced in the Senate in late March. All legislative activity for the current session will wrap up by May 8.



<h4 class="wp-block-heading">Federal legislation</h4>



Lawmakers in Washington, DC have been working on bills affecting public employee retirement.



While Congress passed the package of retirement-related legislation collectively known as SECURE Act 2.0 in late December, many of its dozens of provisions don’t take effect until 2023 or 2024. Those include an increase in the age that retirees must start taking their annual required minimum distributions (RMDs) and new types of penalty-free distributions from retirement accounts.



<blockquote class="wp-block-quote">
READ MORE: <a href="https://peraontheissues.com/whats-in-secure-2-0/" target="_blank" rel="noreferrer noopener">What’s in SECURE 2.0?</a>
</blockquote>



Congress is also tackling an issue that comes up every session: <a href="https://content.copera.org/checking-in-on-legislative-activity-so-far-this-year/" target="_blank" rel="noreferrer noopener">Social Security’s Windfall Elimination Provision and Government Pension Offset</a>. The two provisions of federal law can reduce Social Security benefits for members of Colorado PERA, which serves as a substitute for Social Security. While lawmakers have introduced bills addressing the WEP and GPO in every session of Congress in recent years, the bills never make it to a floor vote for full consideration, with lawmakers citing the cost as a key reason.



So far this year, lawmakers have re-introduced last year’s Social Security Fairness Act, which seeks to repeal both the WEP and GPO. Last year, we saw multiple similar bills, with some aiming to modify the WEP and GPO calculations rather than repealing them. It remains to be seen whether lawmakers will introduce other bills on the topic this year.



<blockquote class="wp-block-quote">
READ MORE: <a href="https://peraontheissues.com/bill-to-repeal-wep-gpo-reintroduced-in-congress/" target="_blank" rel="noreferrer noopener">Bill to Repeal WEP/GPO Reintroduced in Congress</a>
</blockquote>



As always, PERA On The Issues will continue to track these topics and others that come up throughout the year. You can <a href="https://peraontheissues.com/subscribe/" target="_blank" rel="noreferrer noopener">subscribe to our biweekly email newsletter</a> to stay in the loop, as well as sign up for the <a href="https://www.copera.org/ambassador-program" target="_blank" rel="noreferrer noopener">PERA Ambassador</a> email list to be informed about important legislative activity.

Checking in on Legislative Activity So Far This Year

While Colorado’s 2022 legislative ended in May, PERA executives, staff, and consultants continue to meet with lawmakers and various legislative oversight committees in the interim.



The meetings are part of the regular review and oversight of PERA that takes place every year.



An important part of that oversight process is the Legislative Audit Committee, which met on August 9. At that meeting, PERA executives joined representatives from PERA’s actuarial consultant, Segal, and an outside auditor to discuss PERA’s financial status and answer questions from committee members.



An audio recording of the meeting is <a href="https://sg001-harmony.sliq.net/00327/Harmony/en/PowerBrowser/PowerBrowserV2/20220809/-1/13557#info_" target="_blank" rel="noreferrer noopener">available online here</a>.



<h4 class="wp-block-heading">Results of outside audit</h4>



Every year, the state hires an independent auditor to audit PERA’s financial data and internal controls. CliftonLarsonAllen, which has been auditing PERA’s financial reports since 2015, presented its audit of the 2021 Annual Comprehensive Financial Report. The auditors gave the report a clean audit with no significant issues.



A summary of the 2021 Annual Comprehensive Financial Report is <a href="https://peraontheissues.com/pera-board-releases-2021-annual-report-at-june-meeting/" target="_blank" rel="noreferrer noopener">available here</a>.



<h4 class="wp-block-heading">Ongoing oversight at the Capitol</h4>



In recent weeks, PERA has also appeared before the Pension Review Subcommittee and Pension Review Commission, which are responsible for overseeing PERA operations and recommending legislation that affects PERA.



The Pension Review Subcommittee and Pension Review Commission will continue to meet throughout the summer and fall, and PERA On The Issues will keep track of any potential new legislation that arises from those meetings.



PERA also reports to the Joint Budget Committee and the Joint Finance Committee.



These regular meetings allow policymakers to learn more about PERA’s financial footing and ask questions of PERA management, ensuring robust oversight and transparency.

PERA Receives Clean Audit at Legislative Audit Committee Hearing

Colorado’s 2022 legislative session is well underway, with more than 400 bills introduced since lawmakers convened in Denver in January.



To find out the latest on what’s happening under the gold dome, PERA On The Issues sat down with PERA Public and Government Affairs Manager Michael Steppat, who represents PERA at the Capitol.



<h5 class="wp-block-heading" id="what-are-some-of-the-major-issues-lawmakers-have-been-tackling-this-year">What are some of the major issues lawmakers have been tackling this year?</h5>



This legislative session marks the third year legislators have had to deal with the challenges of the pandemic, but it has been more of a return to normal operations despite some COVID safety protocols remaining in place at the Capitol. The pandemic still continues to be one of the major issues in terms of the type of legislation considered, especially as lawmakers decide how to spend nearly $3.6 billion in one-time federal COVID relief funds. It’s important to note that none of these funds may be used for state pensions. However, the state budget for the next fiscal year expects to be around $40 billion, which is a 4% increase from the current one and a state record, boosted by stronger than expected tax revenues.



Other major issues include the kinds lawmakers have frequently taken on in recent years, such as public safety, healthcare, and education.



<h5 class="wp-block-heading" id="we-ve-seen-several-pieces-of-legislation-related-to-pera-so-far-this-session-what-s-the-latest-on-those-bills">We’ve seen several pieces of legislation related to PERA so far this session. What’s the latest on those bills?</h5>



Two bills that would expand the ability for PERA retirees working after retirement without a reduction in benefits, <a href="https://leg.colorado.gov/bills/hb22-1057" target="_blank" rel="noreferrer noopener">HB22-1057</a> and <a href="https://leg.colorado.gov/bills/hb22-1101" target="_blank" rel="noreferrer noopener">HB22-1101</a>, have passed the House and are now under consideration in the Senate. <a href="https://leg.colorado.gov/bills/hb22-1087" target="_blank" rel="noreferrer noopener">HB22-1087</a>, which would exclude special district directors from membership in PERA, has also passed the House.



<a href="https://leg.colorado.gov/bills/hb22-1029" target="_blank" rel="noreferrer noopener">HB22-1029</a>, a bill to make up the state’s annual $225 million payment to PERA that was foregone in 2020 due to pandemic-related budget cuts, has been introduced in the House but it’s not yet scheduled for a hearing. We expect that to happen in the coming weeks.



We’re tracking the status of each PERA-related bill <a href="https://peraontheissues.com/2022-proposed-legislation-status/">here</a>.



<h5 class="wp-block-heading" id="lawmakers-are-working-right-now-to-craft-the-state-budget-for-the-next-fiscal-year-what-can-we-expect-to-see-in-the-budget-that-might-affect-pera">Lawmakers are working right now to craft the state budget for the next fiscal year. What can we expect to see in the budget that might affect PERA?</h5>



PERA funding is certainly part of the budget conversation, as lawmakers are considering not only HB22-1029, the PERA direct distribution bill, but also how best to use money in a cash fund the legislature <a href="https://peraontheissues.com/2021-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">set up last year</a> for future payments to PERA. The Joint Budget Committee will be wrapping up its budget recommendations for the General Assembly to consider later this month.



<h5 class="wp-block-heading" id="is-there-anything-going-on-in-washington-dc-that-pera-members-might-want-to-know-about">Is there anything going on in Washington, DC that PERA members might want to know about?</h5>



Lawmakers <a href="https://content.copera.org/checking-in-with-peras-public-and-government-affairs-manager/" target="_blank" rel="noreferrer noopener">have introduced several bills</a> to modify or repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), which can reduce Social Security benefits for pension recipients, though those bills have once again stalled in Congress. There’s also a bill under consideration, <a rel="noreferrer noopener" href="https://www.barrons.com/articles/securing-strong-retirement-act-means-for-you-51640890247" target="_blank">dubbed Secure Act 2.0</a>, that would make some changes to retirement plans nationwide, such as raising the age for required minimum distributions (RMDs) and expand automatic enrollment in employer-sponsored plans like 401(k)s.

Checking In With PERA’s Public and Government Affairs Manager

Below you&#8217;ll find summaries of proposed legislation affecting Colorado PERA. The status of each bill will be updated regularly. 



Any position the Colorado PERA Board takes on a bill will be reflected below as soon as it becomes available.



Last updated: Aug. 31, 2021



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<h1 class="wp-block-heading"><a href="https://leg.colorado.gov/bills/sb21-228" target="_blank" rel="noreferrer noopener">SB 21-228</a></h1>



Bill Title: PERA Public Employees Retirement Association Payment Cash Fund



Concerning the creation of the PERA payment cash fund to be used for future payments to the public employees&#8217; retirement association, and, in connection therewith, making an appropriation.



Bill Summary: The bill creates the PERA payment cash fund (fund) and appropriates $380 million from the general fund to the fund for the 2020-21 state fiscal year. The state treasurer is required to use the money in the fund for the $225 million direct distribution payment to PERA on July 1, 2022, subsequent direct distributions, and any of the state&#8217;s employer contributions or disbursements.



Sponsors: <a href="https://leg.colorado.gov/legislators/chris-hansen" target="_blank" rel="noreferrer noopener">Sen. Chris Hansen</a> and <a href="https://leg.colorado.gov/legislators/dominick-moreno" target="_blank" rel="noreferrer noopener">Sen. Dominick Moreno</a>, <a href="https://leg.colorado.gov/legislators/julie-mccluskie" target="_blank" rel="noreferrer noopener">Rep. Julie McCluskie</a> and <a href="https://leg.colorado.gov/legislators/kim-ransom" target="_blank" rel="noreferrer noopener">Rep. Kim Ransom</a>



Bill Status: Signed into law by Gov. Polis on May 4, 2021



Bill History: 



<ul><li>May 4: Signed by the Governor</li><li>April 5: Introduced in Senate</li><li>April 6: Passes Senate Appropriations Committee with <a href="https://s3-us-west-2.amazonaws.com/leg.colorado.gov/2021A/amendments/SB228_L.001.pdf" target="_blank" rel="noreferrer noopener">amendment</a></li><li>April 8: Passes Senate second reading </li><li>April 9: Approved by Senate, introduced in House</li><li>April 13: House Committee on Appropriations refers unamended to Committee of the Whole</li><li>April 14: Passes House second reading</li><li>April 15: Approved by House</li></ul>



PERA Board position: The PERA Board did not take a position on this bill.



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<h1 class="wp-block-heading"><a href="http://leg.colorado.gov/bills/HB21-1246" target="_blank" rel="noreferrer noopener">HB 21-1246</a></h1>



Bill Title: PERA Public Employees&#8217; Retirement Association Divestment From Fossil Fuel Companies



Concerning divestment action by the public employees&#8217; retirement association against companies financially involved with fossil fuel companies.



Bill Summary: The bill would require the PERA Board to create an exclusion list of all direct investments PERA has in fossil fuel companies.



Within 6 months after completing the exclusion list, the Board would be required to determine whether divestment from the companies on the exclusion list complies with the Board&#8217;s fiduciary obligations. If the Board determines that divestment from any company on the exclusion list does not comply with its fiduciary obligations, the Board will remove the company from the exclusion list.



If the Board determined that divestment from any company on the exclusion list does comply with its fiduciary duty, the Board would be required to divest from those companies on the exclusion list. And the Board would be required to cease new direct investments in any company that is a fossil fuel company.



Beginning one year after the effective date of the bill, the Board would be required to ensure that no money or assets of the fund are invested in an indirect investment vehicle unless the Board is satisfied that such indirect investment vehicle is unlikely to have in excess of 2% of its assets directly or indirectly invested in fossil fuel companies.



The Board would be required to issue periodic reports to the members of the pension review commission of the General Assembly outlining all actions taken to comply with the requirements of the bill.



Sponsors: <a href="http://leg.colorado.gov/legislators/emily-sirota" target="_blank" rel="noreferrer noopener">Rep. Emily Sirota</a> and <a href="http://leg.colorado.gov/legislators/sonya-jaquez-lewis" target="_blank" rel="noreferrer noopener">Rep. Sonya Jaquez Lewis</a>



Bill Status: Postponed indefinitely



Bill History: 



<ul><li>March 25: Introduced in House</li><li>March 19: Postponed indefinitely by House Finance Committee</li></ul>



PERA Board Position: Per the Board’s <a href="https://www.copera.org/pera-board-of-trustees-updates-divestment-policy-statement" target="_blank" rel="noreferrer noopener">Statement on Divestment</a>, PERA serves the singular purpose of ensuring the retirement security of Colorado’s current and former public servants. Global issues are difficult to prioritize and proper recourse falls beyond the duty of the retirement system. PERA opposes divestment efforts unless such opposition is inconsistent with its fiduciary duty and recommends the legislature thoughtfully consider such proposals with caution and fiduciary care.



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<h1 class="wp-block-heading"><a href="http://leg.colorado.gov/bills/HB21-1136" target="_blank" rel="noreferrer noopener">HB 21-1136</a></h1>



Bill Title: Judicial Division Retirees Temporary Judicial Duties Compensation



Concerning modifications to the policies governing judicial division retirees returning to temporary judicial duties.



Bill Summary: Retired judges may currently perform judicial duties for 60 or 90 days with written permission from the chief justice of the Colorado Supreme court. This bill would allow retired judges to do the same for 20, 30, 60, or 90 days per year. In addition, under current law a retired judge must enter into the agreement prior to retirement or within thirty days prior to the retirement anniversary in the next five years of retirement. This bill would remove that limitation.



Sponsors: <a href="http://leg.colorado.gov/legislators/kerry-tipper" target="_blank" rel="noreferrer noopener">Rep. Kerry Tipper</a> and <a href="http://leg.colorado.gov/legislators/terri-carver" target="_blank" rel="noreferrer noopener">Rep. Terri Carver</a>



Bill Status: Signed into law by Gov. Polis on May 4, 2021 



Bill History: 



<ul><li>May 4: Signed by the Governor</li><li>April 26: Senate passes on third reading</li><li>April 23: Senate passes on second reading</li><li>April 23: Senate Appropriations Committee refers to Committee of the Whole</li><li>April 14: Senate Judiciary refers unamended to Senate Appropriations Committee</li><li>April 9: Introduced in Senate</li><li>April 8: Passed by House</li><li>April 7: House passes with <a href="https://s3-us-west-2.amazonaws.com/leg.colorado.gov/2021A/amendments/HB1136_L.001.pdf" target="_blank" rel="noreferrer noopener">amendments</a></li><li>April 5: House Appropriations Committee refers to Committee of the Whole with <a href="https://s3-us-west-2.amazonaws.com/leg.colorado.gov/2021A/amendments/HB1136_J.001.pdf" target="_blank" rel="noreferrer noopener">amendments</a></li><li>March 1: Introduced in House</li></ul>



PERA Board Position: The PERA Board does not have a position on this bill.



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<h1 class="wp-block-heading" id="block-aed2a52c-4dde-4844-bab2-cc1c9c9133a8"><a href="https://leg.colorado.gov/bills/hb21-1213" target="_blank" rel="noreferrer noopener">HB 21-1213</a></h1>



Bill Title: Conversion Of Pinnacol Assurance



Concerning the conversion of Pinnacol Assurance from a political subdivision of the state into a stock insurance company owned by a mutual insurance holding company.



Bill Summary: This bill would convert Pinnacol Assurance, which provides workers’ compensation insurance, into a private company. As part of this conversion, Pinnacol would disaffiliate from PERA and make a payment to PERA to cover its portion of PERA’s liabilities. Current Pinnacol employees would become inactive PERA members after the disaffiliation date but would be eligible for future benefits. Current PERA retirees who were employed by Pinnacol are not affected by this bill.



Sponsors: <a href="https://leg.colorado.gov/legislators/matt-soper" target="_blank" rel="noreferrer noopener">Rep. Matt Soper</a>



Bill Status: Postponed indefinitely 



Bill History: 



<ul><li>March 22: Postponed indefinitely by the House State, Civic, Military, &amp; Veterans Affairs Committee</li><li>Introduced March 5</li></ul>



PERA Board Position: The PERA Board holds that all disaffiliations should be treated the same and the methodology used to determine the cost for disaffiliation should align with the framework provided by the general assembly under current statute.



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2021 Proposed Legislation Status

Key points from the story:



<ul><li>Like last year, COVID-19 will influence the legislature&#8217;s priorities&#8230;and its calendar</li><li>Leaders have signaled they will pause the legislative session, possibly resuming in mid-February</li><li>Some committee work, including budget writing, will continue throughout this pause</li><li>All eyes are on the state of the economy</li></ul>



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Last year’s legislative session took a strange turn in March. In 2021, it will be unusual off the bat.



On January 13, the legislature will formally start, or “gavel in,” to meet a legal requirement. But it is expected to “gavel out” soon after. This doesn’t mean that session will end. Instead, it will be put on pause until at least mid-February – similar to the mid-session pause we saw last year.



As Colorado’s 100 legislators veer away from the deep ruts of tradition in response to the global pandemic, what will guide them? How will important work get done? What issues will they tackle, and which issues might be pushed aside? These are just some of the many questions Coloradans have as this unusual session begins.



<h5 class="wp-block-heading">When will work get done?</h5>



“The key word still is uncertainty,” said Michael Steppat, PERA’s Public and Government Affairs Manager. “What happens in the building is totally dictated by the external environment.”



Lawmakers don’t have a set date to come back because there’s no way to tell what the public health situation will look like next week, let alone next month.



Lawmakers are still constitutionally bound to meet for no more than 120 days, but last year’s state supreme court ruling means that, during an emergency, the days between gaveling out and gaveling back in don’t count against that limit. This gives increased flexibility to leaders.



<h5 class="wp-block-heading">What work will get done?</h5>



Just because the full legislature won’t meet, that does not mean that legislative work will grind to a halt. Some committees, including the Joint Budget Committee, will continue to meet and move forward with their work.



It might sound obvious, but Steppat said “Lawmakers’ top three priorities are the pandemic, the pandemic, and the pandemic. Everything ties to it.”



As far as PERA-related legislation, Steppat said he’s keeping an eye on the status of PERA’s <a href="https://peraontheissues.com/polis-budget-plan-includes-pera-direct-distribution/">direct distribution</a>, covered more below. Like the past few years, there’s also a possibility that lawmakers consider legislation related to PERA&#8217;s investment program.



<h5 class="wp-block-heading">Writing the budget</h5>



One important waypoint in the legislative calendar is passing a budget. Colorado’s constitution requires lawmakers to pass a budget before they stop work for the year. The Joint Budget Committee (JBC) writes the budget before it’s brought to the full House and Senate.



“Writing a budget isn’t easy, even in a surplus year” Steppat said. “The JBC just went through an unprecedented budget writing process, and that’s not going to get any easier.”



The JBC starts the budget writing process in November and typically completes its proposed budget by late March. The House and Senate usually debate, amend, and pass the budget in the first few weeks of April. From there, it goes to the governor for a signature.



The state’s fiscal year ends on June 30. Steppat said lawmakers likely view that date as a de facto deadline for passing a budget, even if they plan to continue other work into the summer or even fall.



<h5 class="wp-block-heading">The state of the economy</h5>



The sudden shutdown of the nation’s economy led to last year’s budget emergency. As state revenue streams dried up in historic fashion, lawmakers sprinted to cut billions from previously planned spending. Cuts included the $225 million direct distribution to PERA, which PERA On The Issues has <a href="https://content.copera.org/polis-budget-plan-includes-pera-direct-distribution/" target="_blank" rel="noreferrer noopener">covered previously</a>.



Parts of the economy have recovered, but some sectors still face dire circumstances. Overall, uncertainty still looms over everything. To this end, keeping an eye on periodic budget forecasts produced by <a href="https://leg.colorado.gov/agencies/legislative-council-staff/economy-budget" target="_blank" rel="noreferrer noopener">Legislative Council</a> and the <a href="https://www.colorado.gov/governor/Office-State-Planning-Budgeting" target="_blank" rel="noreferrer noopener">Office of State Planning and Budgeting</a> is a good way to stay abreast of any changes.



Governor Polis indicated support for resuming the direct distribution in his budget proposal. Steppat said he is optimistic the direct distribution will be included in the budget that lawmakers send to the governor’s desk.



<h5 class="wp-block-heading">Tracking this unusual session</h5>



While it will look different, the 2021 legislative session is bound to be consequential as lawmakers steer Colorado through these choppy waters. PERA On The Issues will monitor and share updates on any legislation related to PERA.

The Year Ahead for Colorado’s Legislature

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<iframe loading="lazy" title="Colorado PERA: Government Relations with Michael Steppat" width="640" height="360" src="https://www.youtube.com/embed/mSZ3Diqsu38?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
</div></figure>



Michael Steppat serves as Colorado PERA&#8217;s Public and Government Affairs Manager. He tracks <a href="https://peraontheissues.com/2020-proposed-legislation-status/">PERA-related legislation</a> and provides legislative oversight committees with the information they need, among other duties. 



In this short video, you&#8217;ll hear from Michael about the importance of PERA&#8217;s relationship with the legislature and what life is like for him at the Capitol.



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0:26: How does PERA work with the government?



1:11: What factors does PERA consider when looking at new legislation?



1:49: What does a typical day look like for you?

Video: PERA’s Voice is Heard at the Capitol

Despite adjourning quietly late on Friday
afternoon on May 3, the 2019 legislative session will likely be remembered for a
number of bitter legislative battles and a bold agenda from the new leadership at
the State Capitol. Tensions rose quickly once the session started, and there
were numerous legislative hearings that stretched late into the night
throughout the 120-day session. Even though fewer bills were introduced
compared to last session, politics contributed to a backlog of bills in the
final weeks which threatened to derail a number of important issues.



A lower bill count shouldn’t discount the importance of the
2019 legislative session, as it was one of the most consequential in recent
memory. Lawmakers introduced nearly 600 bills that sought to address myriad
issues such as local control of oil and gas operations, rising health care costs,
climate change, free full-day kindergarten, and TABOR. 



PERA Legislation 



<a href="https://content.copera.org/retirement-roundup-everything-you-need-to-do-before-you-retire/">As previously reported</a>, the
PERA Board of Trustees did not identify any legislative agenda items for
consideration this year. There were two bills that directly impacted PERA. 



<a href="http://leg.colorado.gov/bills/hb19-1217">HB 19-1217</a>, concerning the elimination of the 2 percent increase in the member contribution rate to the public employees’ retirement association for members in the Local Government Division, was introduced in early March and sent to the Governor in late April for signature. According to the bill’s sponsors, HB 19-1217 fulfills an agreement that was struck on SB 18-200 last year by eliminating a 2 percent increase in the member contribution rate for PERA members who work for employers in the Local Government Division. As passed, SB 18-200 included a 2 percent increase in the member contribution rate for PERA members in all divisions. Speaker of the House K.C. Becker, along with Senators Court and Tate, were sponsors of both bills. The PERA Board held the position included in their original recommendation to the General Assembly presented in late 2017 that included increases in employee contributions across all divisions.



<a href="http://leg.colorado.gov/bills/hb19-1270">HB 19-1270</a>, sponsored by Representatives Sirota and Hansen, sought to require the Board to take certain actions in connection with climate-related financial risks to the various trust funds managed by PERA. It was postponed indefinitely in its first committee hearing. The bill would have required the PERA Board to retain a third-party organization to conduct a study that would include a comprehensive analysis of climate-related financial risk to PERA’s portfolio, a summary of climate-related financial risk engagement activities that have been undertaken, and a description of additional actions that should be taken based on the study’s recommendations. The PERA Board directed staff to continue to work with the bill sponsors and members of the General Assembly to provide further education on PERA’s investment process related to risk. 



Labor
and Employment Legislation



Some of the more contentious issues of the session dealt with
several labor and employment bills that were introduced in previous sessions
but failed to garner enough support to pass. Legislation prohibiting employers
from asking about an applicant’s criminal history on an initial application (<a href="https://leg.colorado.gov/sites/default/files/documents/2019A/bills/2019a_1025_enr.pdf">HB 19-1025</a>),
allowing local governments to raise the minimum wage beyond the State’s (<a href="https://leg.colorado.gov/sites/default/files/documents/2019A/bills/2019a_1210_rer.pdf">HB 19-1210</a>),
studying the creation and implementation of a state-run paid family leave
program (<a href="https://leg.colorado.gov/sites/default/files/documents/2019A/bills/2019a_188_rer.pdf">SB 19-188</a>), and
changes to ensure equal pay for equal work (<a href="https://leg.colorado.gov/sites/default/files/documents/2019A/bills/2019a_085_rer.pdf">SB 19-085</a>), have
all been sent to the Governor for signature. As <a href="https://content.copera.org/colorado-pera-chief-investment-officer-and-internal-audit-director-appointed-to-state-boards/">previously reported</a> in
PERA on the Issues, <a href="https://leg.colorado.gov/sites/default/files/documents/2019A/bills/2019a_173_rer.pdf">SB 19-173</a> has also
been sent to the Governor. This piece of legislation requires the State
Treasurer to oversee an analysis of four options to fix Colorado’s retirement
crisis and to come back to the Legislature in February 2020 with a recommended
plan for implementation.



The Second Regular Session of the 72nd General
Assembly is scheduled to convene on January 8, 2020. Stay tuned to PERA on the
Issues for updates throughout the interim.

2019 legislative session adjourns “sine die”

The First Regular Session of Colorado’s 72nd General Assembly convened on Friday, January 4, 2019. Unlike 2018, when PERA’s sustainability was a major issue at the State Capitol, the PERA Board of Trustees has not identified any legislative agenda items for consideration this year. However, bills will undoubtedly be introduced that could impact PERA.



As is typical, the first day of session was mostly ceremonial; more substantive policy discussions will begin in the coming weeks. Legislators elected in November were sworn in, and <a href="https://www.copera.org/2019-legislative-session-kicks-off" target="_blank" rel="noreferrer noopener">each chamber officially approved their new leaders</a>, who were chosen shortly after the election. The leaders of each caucus then addressed the entire body regarding their priority issues for the next 120 days. Finally, the first group of bills were officially introduced. The election’s results should drive the agenda this session, and there are many issues likely to dominate the headlines through May 3.



Education



Governor Jared Polis, sworn-in January 8, made education a key part of his campaign, particularly full-day kindergarten funding and expanded access to preschool. This pledge, coupled with <a href="https://ballotpedia.org/Colorado_Amendment_73,_Establish_Income_Tax_Brackets_and_Raise_Taxes_for_Education_Initiative_(2018)" target="_blank" rel="noreferrer noopener">Amendment 73’s</a> failure at the ballot box and the Democratic sweep of the legislative branch, will lead to a much broader debate on education funding. Improving teacher salaries, increasing per-pupil funding, paying down <a href="https://www.coloradoan.com/story/news/2017/04/07/negative-factor-why-colorado-schools-crying-poverty/99823948/" target="_blank" rel="noreferrer noopener">the negative factor</a>, and addressing teacher recruitment and retention are all issues that lawmakers will seek to address.



Transportation



Two measures (<a href="https://ballotpedia.org/Colorado_Proposition_109,_%22Fix_Our_Damn_Roads%22_Transportation_Bond_Initiative_(2018)" target="_blank" rel="noreferrer noopener">Proposition 109</a> and <a href="https://www.copera.org/2019-legislative-session-kicks-off" target="_blank" rel="noreferrer noopener">Proposition 110</a>) intended to increase funds dedicated to transportation projects failed on the ballot in November. This result automatically triggers a provision contained in 2018 legislation that places <a href="http://leg.colorado.gov/sites/default/files/2018a_001_signed.pdf" target="_blank" rel="noreferrer noopener">another measure on the ballot</a> in November of 2019, unless this General Assembly acts on the issue first.



Health Care



The 2019 session will surely see bills introduced dealing with health care. Many candidates campaigned on expanding access, improving quality, and driving down costs.



General Business



As a result of the State Senate flipping from Republican to Democratic control, bills from the past two years that had passed the Democratic-controlled House but were postponed indefinitely (killed) in the Republican-controlled Senate are likely to reappear. Examples include a nationwide effort to strike the criminal history box on employment applications, known as ‘ban the box;’ and the creation of a Family Medical Leave Insurance Program, or ‘FAMLI,’ that is intended to offer a state solution for paid family leave. Other proposals have included creating a state-sponsored retirement program for private sector workers and giving local governments the ability to set their own minimum wage.



Energy and the Environment



Though in November voters rejected <a href="https://ballotpedia.org/Colorado_Proposition_112,_Minimum_Distance_Requirements_for_New_Oil,_Gas,_and_Fracking_Projects_Initiative_(2018)" target="_blank" rel="noreferrer noopener">Proposition 112</a>, a statutory measure intended to increase setbacks for new oil and gas development to 2,500 feet from occupied structures or vulnerable areas, this will still be an issue at the Capitol. Other proposals mentioned by lawmakers and interest groups include a moratorium on new drilling permits and giving local communities more control over oil and gas projects, as regulation of them is currently a matter of statewide concern.



TABOR and Gallagher Amendments



Finally, many key policy issues are dependent on increased funding in an environment that is fiscally limited under current law. An interim committee met throughout the summer of 2018 to try and come up with solutions to address funding challenges by recommending changes to the <a href="https://en.wikipedia.org/wiki/Gallagher_Amendment" target="_blank" rel="noreferrer noopener">Gallagher Amendment</a>. It will be key to watch whether there is political appetite in the General Assembly to pass such a bill, and ultimately assess whether voters would approve any changes in November.



PERA staff will be actively tracking 2019 legislation closely, so stay tuned for updates throughout the session.

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