Pensions & Retirement: PERA Reform

Pensions & Retirement PERA Reform SB 18-200 Support Before governor Sens. Jack Tate, R-Centennial, and Kevin Priola, R-Brighton; Reps. KC Becker, D-Boulder, and Dan Pabon, D-Denver Kevin Bommer, Dianne Criswell kbommer@cml.org, dcriswell@cml.org

SB 18-200 ultimately passed late on the last day of the session.  CML will have a detailed breakdown of the bill's impacts on our PERA-member municipalities, including an error in the final form of the legislation that will inadvertently increase employee contributions starting in July 2019 without a fix early in the 2019 session:

The final summary of the bill with that component looks like this:

  • 5 Year HAS calculation (up from 3 years in current law)
  • Assess PERA benefit on gross salary (before pretax deductions) for members hired on or after 7/1/19
  • Technical stuff about when a local gov't terminates PERA affiliation
  • Direct Distribution of $225 million every year until unfunded liability paid down - mainly paid from General Fund
  • Automatic adjustments to the contribution rate, COLA, and Direct Distribution when blended total contribution amount is less than 98% or greater than 120%
  • 3 year COLA freeze for all (2 year for current retirees, who already have 1; 3 year for new retirees)
  • COLA at 1.5 percent (down from 2% in current law)
  • 64 retirement age for all divisions with 30 years of service -- 65 with at least 5 years vested status (differs by division, state is currently age 60)
  • LGD and Higher Ed have DC Option as of Jan 2019
  • State and Local employers have to pay DC Supplement for expanded population beginning Jan 2021 - assessed on amount that would have gone to DB to pay unfunded liability
  • Employee contribution increases (applies to LGD) to 2% over three years
    • 7/19 – 0.75%
    • 7/20 – 0.75%
    • 7/21 – 0.50%
  • Employer contribution increase (not LGD)
    • 7/19 – 0.25%
  • Police Officer and Firefighter Pension Review Commission becomes Pension Review Committee with a subcommittee dedicated to all things PERA