History of PERA Benefit Changes

1969

• Began crediting 1% of Highest Average Salary (HAS) for years 21 through 40 for years served since 1969. 

• Began annual benefit increase of up to 1.5% per year. 

• Began a "catch-up" for ad hoc post-retirement increases.

1971

• Changed reduced service retirement eligibility to age 55 with 20 years of service and age 60 with 5 years service.

1973

• Raised annual benefit increase to maximum of 3% per year.

• Reduced survivor benefit eligibility requirement from 3 years to 1 year of service.

• Reduced disability retirement eligibility requirement from 15 to 5 years.

1975

• Improved "catch up" benefits for post-retirement increases phasing in over 4 years. 

• Added 1% of HAS credit for service of more than 20 years rendered before 1969. 

1977

• Reduced eligibility for service retirement at age 55 from 35 to 30 years service for school members. (Already in place for state members.)

1980

• Established Cost-of-Living Stabilization Fund for ad hoc increases to benefit recipients to replace "catch up" program. Payments from CLSF increased every even-numbered year from 1982 through 1992. 

1981

• Changed reduced service retirement calculation so reduction is based on date member would qualify for unreduced retirement, instead of age 60 or 65. 

1982

• Changed HAS formula to highest 3 years of salary instead of 5 years.

1984

• Arranged for tax-deferral of member contributions from July 1984 forward. 

1985

• Established Health Care Fund to be used for subsidy of premiums for benefit recipients. 

• 401(k) voluntary tax-deferred investment program established. 

1987

• Increased credit from 1.0% to 1.25% of HAS for years of service from 20 through 40.

• Changed reduced service retirement factor from 7% to 4% for each year prior to service retirement eligibility. 

• Set annual increase for either May or November following one full year of retirement. 

1988

• Improved Judicial Division benefits.

• Added Option 3 benefit for surviving spouse of vested inactive member.

• Added automatic reversion of Option 2 and 3 benefits to Option 1 after death of cobeneficiary, for retirements effective on or after July 1, 1988. 

• Allowed retirees to re-select Option 2 or 3 following marriage. 

• Increased health care premium subsidy from $87 to $95 per month. 

1989

• Improved State Trooper benefits.

• Removed many restrictions on purchasing of service credit. 

1990

• Increased health care premium subsidy from $95 to $115 per month. 

1991

• Began crediting interest on member contributions. 

• Required membership for all employees of PERA employers not exempt by federal law or in another retirement plan. 

• Reduced employer contribution rates by 0.6% of salary in State Division, 0.3% of salary in School Division, and 0.2% of salary in Municipal Division. 

1992

• Raised annual benefit increase from 3% to 4% of base benefit. 

• Increased credit from 1.25% to 1.5% of HAS for each year of service over 20 up to 40 for all current and future benefit recipients. 

• Increased credit from 1.25% to 1.5% of HAS for each year of service over 20 up to 40 for all current and future benefit recipients. 

• Reduced employer contribution rate in School Division by 0.6% of salary to 11.6%. 

1993

• Established reduced service retirement at age 50 with 25 years of service. 

• Indexed benefits for vested inactive members with 25 years service from termination until retirement. 

• Changed annual benefit increase to maximum of 3.5% compounded annually and folded Cost-of-Living Stabilization Fund into pension fund.

1995

• Established pension hybrid changes including a money purchase benefit, an improved rate for interest on accounts equal to 80% of actuarial investment assumption rate (initially 6.8%), and a matching amount equal to 25% or 50% of member contributions and interest. 

• Eliminated 80% of HAS cap for current and future benefit recipients serving over 40 years. 

1997

• Increased credit from 1.5% to 2.5% of HAS for each year of service over 20 for all current and future benefit recipients. Maximum benefit capped at 100% of HAS.

• Enacted two-tier disability benefits to provide temporary benefits to members who become disabled, but are able to do other work where retraining, rehabilitation, and recovery is possible. New structure applicable to members who apply for disability on or after January 1, 1999. 

• Established one-year HAS for future retirees of the Judicial Division. 

• Combined State Division and School Division, and reduced employer contribution rate by 0.1% of salary to 11.5%. 

1998

• Reduced State and School Division employer contribution rate by 0.1% of salary to 11.4% saving employers more than $3.7 million annually.

• Increased age limit for children covered under Health Care Program up to age 19, unless in school full-time, then up to age 24. 

• Changed unreduced service retirement eligibility from 30 years at age 55 to 30 years at age 50. 

• Lowered reduction factors for reduced service retirement between ages 55 and 60 from 4% to 3% per year. 

• Certain elected and appointed state officials authorized to enroll in Defined Contribution Plan. 

1999

• Allocation to health care fund from employer contribution rate increases from 0.8% to 1.1% of salary.

• Contribution by state troopers decreases from 11.5% to 10.0% of salary. 

• PERA hybrid plan match increases to:
  - 50% for refunds paid before retirement eligibility or age 65
  - 100% for refunds or money purchase benefit calculations on or after retirement eligibility or age 65, or upon the death of a member. 

• MatchMaker on members' voluntary contributions to defined contribution plans authorized once PERA's unfunded liability is fully amortized or January 1, 2001, whichever is later. 

• Subsidy for Health Care Program pre-Medicare retirees authorized to double from $115 to $230 per month for retiree with 20 or more years of service on July 1, 2000. 

• PERA authorized to offer Health Care Program to PERA-affiliated employers on a voluntary basis for active members, effective January 1, 2001. 

2000

• Reduced cost to purchase service credit to 15.5% for most members, 20.0% for Judges, and 20.4% for State Troopers. 

• Members retiring June 1, 2000, or later with age (minimum age 55) plus years of service totaling 80 or more can retire without reduction for early retirement. 

• Employer contribution rate in the State and School Division and in the Judicial Division reduced to 10.4% beginning July 1, 2000. 

• State employees hired before July 1, 1988, who have more than 360 hours of sick leave and who are eligible for retirement will be allowed to convert such excess leave into salary before retirement and be paid at the rate of 15% of hours they convert. Other PERA employers can implement the same provisions to their retirement-eligible employees hired before July 1, 1988. This program ends July 1, 2005. 

• School districts can declare a critical shortage (if certain criteria are met) of nonlicensed employees (bus drivers, cooks, custodians, and secretaries). Once this occurs, PERA service retirees hired in nonlicensed positions are allowed to work with no limitation or reduction in PERA benefits. 

2001

• PERA retirees may contribute to the PERA 401(k) Plan from any wages paid to them by PERA-affiliated employers.

• Any PERA retiree who returns to work for a PERA-affiliated employer during the first month of retirement will have his or her benefit reduced by 5 percent for each day worked in the first month of retirement. 

2002

• Small school districts may declare a "critical shortage" of teachers and employ PERA service retirees full-time in teaching positions without reducing the retiree's PERA benefit. 

2003

• Limited amount of noncovered employment that members may purchase for PERA service credit to 10 total years (with exception for new affiliated employers).

• Allowed members who worked for non-United States employers to purchase this employment for PERA service credit purposes.

• Allowed retirees to revert to Option 1 at divorce, with reselection upon remarriage, under certain conditions.

2004

• Suspended MatchMaker contributions on payroll periods that ended on or after June 1, 2004.

• Reallocated 0.08 percent of salary from Health Care Trust Fund to pension trust funds effective July 1, 2004.

• Reduced interest rate on member contributions to 5 percent effective July 1, 2004.

• Employer contributions required on all salary paid to PERA retirees effective July 1, 2005.

• Changed early retirement eligibility and COLA for new employees hired effective July 1, 2005.

• Board voted on September 17, 2004, to raise cost of purchasing non-covered service to the full actuarial cost effective November 1, 2005.

2005

• Closed loopholes that were being used to circumvent the 110-day limit on work after retirement for a PERA employer.

• Required PERA employers to send tax-related forms and data to PERA.

• Expanded the ability to attach a public pension participant's benefits to include restitution for theft or embezzlement of public property, and in the event of a judgment for a willful and intentional violation of fiduciary duties where the offender or a related party received direct financial gain.

• Made technical changes to the program that allows new state employees hired on or after January 1, 2006, to join either PERA or the State's DC Plan.

2006

• Allowed eligible new state government employees hired on or after January 1, 2006, to choose the State 401(a) DC Plan, PERA DC Plan, or PERA DB Plan.

• Applied an Amortization Equalization Disbursement (AED) on salaries earned by PERA members, employees eligible to choose PERA or DC participation, and retirees from PERA employers. The AED will equal 0.5 percent of pay in 2006 and increase each year to reach 3.0 percent in 2012.

• Separated the State and School Division and renamed the Municipal Division the Local Government Division.

• Legislation enacted in 2006 included the following benefit changes effective for new employees hired on or after January 1, 2007:
  
• Raised the Rule of 80 to the Rule of 85 (no reduction for early retirement if age plus service equals 85 or more) for members retiring after age 55.
• Implemented a new COLA fund that will provide an annual increase of 3.0 percent, the increase in the CPI, or an increase that will exhaust 10 percent of the year-end balance at market value of the annual increase reserve, whichever is lower. Payment is subject to sufficient moneys in the COLA fund. Retirees must have been retired at least one year and meet other requirements.
• Incorporated an 8 percent cap per year on HAS years.
• The following changes were part of legislation enacted in 2006 that became effective January 1, 2008:
• Added a Supplemental AED of 0.5 percent per year up to 3 percent by 2013, paid by employer out of employee compensation increases.
• Allowed new hires at community colleges hired on or after January 1, 2008, to choose the PERA DB plan, or the PERA DC plan.

2009

• Reduced interest rate on member contributions to 3 percent effective January 1, 2009.

• Transferred administration of existing State DC plans to PERA. Allowed eligible new State government employees hired on and after July 1, 2009, to choose the PERA DB Plan, or the PERA DC Plan.

2010

• Merged with the entire Denver Public Schools Retirement System (DPSRS) membership along with existing Denver Public Schools hourly employees, future DPS employees, and DPSRS-covered employers into Colorado PERA effective January 1, 2010.

• Reduced the cost of living adjustment (COLA) to an amount equal to the lesser of the CPI-W or 2 percent, effective February 23, 2010, as provided in Senate Bill 10-001.

• Decreased the investment rate of return from 8.50 percent to 8.0 percent per year.

• Increased member contributions for members of the State and Judicial Divisions (including State Troopers/CBI Agents) to 2.5 percent as provided in Senate Bill 10-146 for the period of July 1, 2010, through June 30, 2011. As a result, employer contributions will be reduced by 2.5 percent during the same period.

2011

• State and Judicial Divisions (including State Troopers/CBI Agents) continue to contribute an additional member contribution of 2.5 percent through June 30, 2012, as provided in Senate Bill 11-076. Employer contributions will also continue to be reduced by 2.5 percent during the same period. (See fourth bullet under 2010.)