Month: May 2019

Colorado passes private sector retirement savings plans study

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Several states have, or are considering, state-sponsored retirement savings plans for private-sector employees who do not currently have access to such a plan through their employer. Senate Bill 19-173 will add Colorado to that growing list.

SB 19-173 will examine:

  • What would it cost if Colorado does nothing to help the 45 percent of private sector workers without retirement plans at work save more for their future?
  • Can increasing financial education make a serious impact on how much Coloradans save?
  • Would it make a significant difference to have a marketplace that offers businesses lower-cost plans?
  • Can Colorado follow in other states’ footsteps to create a universal, portable plan that will allow everyone to automatically deduct part of each paycheck and deposit that into an IRA?

In the coming months, State Treasurer (and PERA Trustee) Dave Young will oversee analysis of these options, and come back to the Legislature in February 2020 with an implementation plan for the best way to fix our state’s retirement crisis.

State-sponsored retirement plans are one way states are trying to address the concern that workers are ill-equipped for retirement. Those without adequate retirement savings could become a costly burden to states and municipalities if they lack any financial resources as they age out of the workforce.

The AARP cites research showing that workers are 15 times more likely to save for retirement if they have access to a payroll deduction savings plan at work. Yet a thorough analysis of retirement savings readiness from the National Institute on Retirement Security found that many U.S. workers don’t have access to a workplace retirement plan. In 2013, nearly half (45.5 percent) of private-sector workers did not have access to a retirement plan at work. Retirement access in Colorado looks similar to the rest of the country: about 45 percent of workers do not have access to retirement savings plans through work, according to an analysis of U.S. census data from The Bell Policy Center.

Previous studies have found that younger workers, members of minority groups, and those with low-to-moderate incomes, in particular, have especially low rates of access to workplace savings plans. Access to retirement plans is particularly prominent among those working for small businesses.

The Center for Retirement Research at Boston College cites administrative costs and concerns, along with uncertain business revenue, high employee turnover, and a preference for cash wages as different reasons that small businesses, in particular, do not offer retirement plans.

Several states have taken the lead and established these retirement savings programs (see below). Most of these plans include key features that are designed to encourage retirement savings, such as automatically enrolling employees, using payroll deduction, and automatically increasing contribution amounts over several years. Typically, the plans establish IRAs for workers and cover administrative costs through fees charged to workers’ investment accounts. Generally, the laws require that all employers, at least with a minimum number of employees, must participate unless they offer an alternative retirement plan. The plan designs allow for portability where workers can rollover their savings if they go to work for an employer that offers a retirement plan or if they move to another state. The laws establishing these new plans have also included the creation of oversight authorities that will administer the programs.

The following information provides a summary of key features of several states’ retirement savings plans for private sector workers.

State-Sponsored Savings Plans

California

CalSavers, California’s plan for private-sector retirement savings, is in a pilot stage and will begin registering employers with five or more employees beginning on July 1, 2019. By June 29, 2020, all employers with 100 or more workers that do not offer another retirement savings plan are required to register. Over time, smaller employers will be required to register, with those with five or more employees required to register by June 30, 2022.

Connecticut

The ConnecticutRetirement Security Authority was created in 2016 through an act of the Connecticut General Assembly. Though the law allowed the program to begin effective January 1, 2018, the program launch has beendeferred to an unspecified future date. The authority will implement a program that will require participation of employers with five or more Connecticut employees that do not already offer a retirement plan.

Illinois

Illinois Secure Choice launched in early 2018. By November 2018, all Illinois employers with 500 or more workers that have been in business for more than two years and do not offer another retirement plan were required to register. All employers with 25 or more employees are required to register by November 2019.

Maryland

Maryland $aves, designed by a legislative commission and signed into law in 2016, is the retirement savings plan required of Maryland businesses that do not offer their own workplace retirement savings. The program is expected to start operations in late 2019.

New Jersey

The New Jersey Secure Choice savings program was signed into law on March 28, 2019. It is designed to help workers whose employers don’t provide their own retirement savings plans through automatic payroll deductions. Workers at employers with 25 or more employees will be automatically enrolled in the program.

Oregon

Oregon was the first state to implement a state-sponsored retirement plan in 2017. By December 15, 2018, all employers with 20 or more workers were required to register with the plan or certify that they are exempt (already offering an employer-sponsored retirement plan, such as a 401(k)-type plan). Over time, smaller employers will be required to register, with those with four or fewer employees required to register by May 15, 2020.

Washington

Washington’s Small Business Retirement Marketplace, operated by the Washington Department of Commerce, is a central online platform where pre-screened financial services firms offer low-cost retirement savings plans to businesses and individuals. The Marketplace is an effort to simplify the process of finding a retirement savings plan and making it easy to compare plans that have been approved by the state.

New York

New York approved Secure Choice legislation in 2018 to begin creating a program in 2019.

For more information:

Several other states are also considering legislation.

MarketWatch: State-sponsored retirement plans will help more people prepare for old age — why do they have so many critics?

PERA Joins a Lawsuit to Defend Transparency and Shareholder Rights

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On May 23, Colorado PERA filed a motion to join a lawsuit to ensure that investors continue to have the right to sue companies that have engaged in illegal behavior.  

The decision is consistent with PERA’s commitment to its fiduciary duties and to investment stewardship and transparency. The case in question aims to force the multinational company Johnson& Johnson to allow its shareholders to vote on whether all lawsuits brought against the company for corporate wrongdoing should be handled through mandatory arbitration, rather than in court. The lawsuit, which is being heard before the U.S. District Court for the District of New Jersey, could effectively end shareowner security class action cases against Johnson & Johnson.

The lawsuit was filed by a single Johnson & Johnson shareowner, and the company opposes the measure. Colorado PERA and the California Public Employees’ Retirement System (CalPERS) filed a joint motion on behalf of shareholders and in support of Johnson & Johnson’s opposition. The pension funds and the company contend that forced arbitration illegally denies shareholders the right to protect their investments in court, and would reduce transparency by limiting public disclosures of settlements.

In contrast to forced arbitration, class action securities litigation is a fundamental right that enables shareholders to seek judicial remedies when a company has committed securities fraud. Securities fraud is an illegal practice covering a wide range of financial market manipulation and deception of investors who are making purchase or sale decisions based on false information.

“Colorado PERA members rely on PERA’s trust fund and its investment earnings for their future financial security, and we must protect that financial security by holding corporate wrongdoers accountable,” said Adam Franklin, General Counsel for Colorado PERA. “It is imperative that investors retain a proper mechanism to correct corporate fraud in a judicial forum. Shareholder rights are not adequately protected by mandatory arbitration—its inherent lack of transparency fails to serve as a deterrent for future wrongdoing.” 

CalPERS and Colorado PERA together manage more than $400 billion and both hold significant investments in Johnson & Johnson. In joining this suit, the pension funds are protecting their respective stakes in the company while also helping to set a legal precedent that will make it more difficult for other corporations to require forced arbitration. PERA officials previously expressed their opposition to mandatory arbitration in a June 2018 letter to SEC Chairman Jay Clayton.

Joining this lawsuit is just one example of how Colorado PERA engages with companies to ensure they adopt responsible business practices and act in the best interest of their shareholders. Each year, Colorado PERA participates in more than 6,000 annual and special meetings and actively votes its proxies as a way to ensure the accountability of public companies in which the fund invests. PERA’s proxy voting policy is unique to the organization and furthers the goals of promoting performance, transparency, and sound corporate governance in ways that align with PERA’s fiduciary responsibility. PERA believes that advocating for best business practices is a critical way to promote the financial sustainability of the Fund.

A timetable for the case has not been announced. For more information about Colorado PERA’s approach to stewardship, visit copera.org.

Contributions to Colorado pensions lower than average

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As percentage of government spending, employer contributions to Colorado’s public pensions remain low.

Contributions to Colorado’s public pensions from government employers remain low as a percentage of direct general spending, according to information recently released from NASRA, the National Association of State Retirement Administrators.

For Fiscal Year 2016, contributions made by state and local governments to pension trust funds accounted for 4.7 percent of all direct state and local government spending. In Colorado, that percentage was lower: 3.6 percent of all direct state and local government spending was pension contributions, NASRA found.

State and local government spending on pensions varies widely among states, from 1.9 percent of spending to nearly 10 percent. There are a number of reasons for this variation, including levels of benefits, conservative assumed investment returns, and historic underfunding, thus requiring governments to increase contributions if they are making a good-faith effort to pay the necessary level of funding to pay benefits.

Additionally, states like Colorado that don’t participate in Social Security tend to have higher pension benefit levels and, therefore, higher costs. If not for the pension plan, those employers and employees would be contributing 12.4 percent of payroll to Social Security.

Colorado’s 3.6 percent was also lower than the median (half higher/half lower) of the 10 other non-Social Security states and the District of Columbia, or 3.9 percent of direct government funding, according to NASRA.

The research also found that, since 1988, investment earnings have accounted for 62 percent of public pension revenue. Employer contributions have made up another 26 percent, and employee contributions the remaining 12 percent.

While employer and employee contribution rates to Colorado PERA will increase on July 1, 2019, as required by provisions of SB 200, the state will still enjoy relatively low pension contributions as a fraction of government spending, particularly considering that PERA is a replacement for Social Security.

2019 Health Care Legislation Overview

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During the 2019 legislative session that concluded on May 3, the Colorado General Assembly was active in debating health care. As promised during the 2018 campaigns, the new leadership at the State Capitol wanted to address rising health care costs. While none of the bills directly impact PERACare, there were several bills that will change the health care landscape in Colorado.

For more details on PERA legislation, see 2019 legislative session adjourns “sine die”

A summary of health care-related legislation is below. The most recent bill status is included in the summary. For more details on these bills, please use the links in each brief.

  • SB 19-004 – Address High-Cost Health Insurance Pilot Program

Signed into law by Governor Polis on May 17, this legislation is designed to mitigate the higher cost of health care insurance in the rural and mountain areas of the state through the use of health care coverage cooperatives.

  • SB 19-005 – Import Prescription Drugs from Canada

This bill was signed by Governor Polis on May 16 and allows for the design and implementation of a wholesale drug importation program for the exclusive benefit of Colorado residents that would provide Colorado consumers access to safe and less expensive prescription drugs.

  • HB 19-1004 – Proposal for Affordable Health Coverage Option

The Division of Insurance is tasked with developing a proposal that considers the feasibility and cost of a state option for the delivery of health care insurance. Requirements are that the plan leverage the current state health care infrastructure and that it improve quality and access to health insurance. The Division of Insurance must submit a recommendation to the General Assembly’s Joint Budget Committee on or before November 15, 2019. This bill was signed into law on May 16.

  • HB 19-1168 – State Innovation Waiver Reinsurance Program

The goal of this legislation, signed into law by Governor Polis on May 17, is to make private health insurance that is available on the individual market more accessible and more affordable by encouraging competition by carriers throughout the state.The desired outcome would be to decrease the costs of care.

  • HB 19-1176 – Health Care Cost Savings Act of 2019

This bill has been sent to the Governor. It would create a task force to analyze health care financing systems and provide the General Assembly with information to better understand how to provide adequate health care to Colorado residents.

  • HB 19-1174 – Out-of-network Health Care Services

This bill was signed into law by the Governor on May 14. The law aims to better protect health care consumers by ending surprise medical bills when out-of-network medical services are used.

While it remains to be seen what impact, if any, the above legislation will have on health care costs in the state, PERA staff will continue to monitor the health care landscape and any potential effects on PERACare.

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.

Retirement Roundup: Running out of money in retirement

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

Here’s how many U.S. households will run out of money in retirement | Yahoo Finance
Saving too little for retirement is a major fear of most Americans, and studies have shown that more Americans fear insufficient retirement savings than fear death. Running out of money is indeed very frightening, as no one wants to be without the cash they need in their 70s and 80s. But how likely is it that you’ll actually run out of money during your retirement years? Unfortunately, research from the Employee Benefit Research Institute shows there’s a pretty good chance that many Americans will run short of cash. In fact, the data about retirement savings shortfalls is startling. The good news is, if you know the risk of running out of money, you can take some steps to reduce the chances you’ll become one of the seniors with too little saved to see you through. 

Here are the best new ideas in retirement | MarketWatch
Ten thousand Americans retire every day. And they do it in 10,000 different ways. With such infinite possibility comes boundless anxiety, which is why no financial rite of passage inspires more hope — or dread — than retirement. What does retirement even mean in 2019? To many, it still marks the beginning of the end of life, a ride off into the Sun Belt in a golf cart (or hearse). But now that we are living, working, and loving longer than ever before, retirement might be better described as the end of midlife. The typical retirement lasts decades, far longer than we spend in school, longer even than some careers. Given these changes, our institutions, financial instruments, and even our vocabulary no longer seem adequate to cope with the challenges of retirement. We need new ways of talking and thinking about this life stage (and all life stages).

Retire early with health insurance: Closing the coverage gap | Forbes
Retiring early is very difficult, but it can be within reach, especially for diligent savers with low expenses, individuals with a strong pension, and high-earning executives with substantial assets. Figuring out when you can retire at any age is driven predominantly by your expenses — not savings — so determining how much income you will require each year to support your lifestyle is the key component of the equation. Particularly for investors who wish to retire early (before Medicare coverage begins at age 65), estimating your health care costs and insurance options is a pivotal factor in determining whether your retirement dreams can become a reality.

House passes bill requiring SEC to set up senior task force | ThinkAdvisor
In April, the House passed the Senior Security Act of 2019, HR 1876, which requires the Securities and Exchange Commission to set up an interdivisional task force to help investigate and combat financial exploitation of seniors. HR 1876 also directs the Government Accountability Office to study and report on the economic impact and consequences of elder financial exploitation. The bill, introduced by Rep. Josh Gottheimer, D-NJ, and Trey Hollingsworth, R-Indiana, passed the House by a 392-20 vote and was sent to the Senate for consideration.

More Baby Boomers skip downsizing in retirement, stay in their homes | USA Today
It’s always been a sort of final chapter of the American dream: Get married and have kids. Buy a house. Move to a bigger house. Downsize to a smaller one. But a growing number of aging baby boomers are saying, “No, thanks” to downsizing, choosing instead to remain in the same sprawling houses in which they raised kids and created lifelong memories. “We’re just not seeing that much downsizing,” says Alexandra Lee, a housing data analyst at Trulia, a real estate research firm. While many older Americans are still stepping down to smaller homes, they’re doing so later in life. The trend is contributing to a housing supply shortage across much of the country.

Social Security’s buying power has dropped 33 percent since 2000 | Money
Social Security benefits have lost one third of their buying power since 2000, according to a recent report from The Senior Citizens League, a non-profit organization, largely because retirees’ monthly benefit checks have not kept up with the skyrocketing costs of prescription drugs and other essential goods and services. Since 2000, typical expenses for seniors have risen twice as fast as the yearly cost-of-living adjustment (COLA) to Social Security, the report says. This annual raise is supposed to counteract the impact of inflation on Social Security, and while benefits rose 2.8 percent for 2019 (the highest increase since 2012), it is not enough to compensate for the mounting bills that seniors have to pay.

2019 legislative session adjourns “sine die”

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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

As previously reported, the PERA Board of Trustees did not identify any legislative agenda items for consideration this year. There were two bills that directly impacted PERA.

HB 19-1217, 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.

HB 19-1270, 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 (HB 19-1025), allowing local governments to raise the minimum wage beyond the State’s (HB 19-1210), studying the creation and implementation of a state-run paid family leave program (SB 19-188), and changes to ensure equal pay for equal work (SB 19-085), have all been sent to the Governor for signature. As previously reported in PERA on the Issues, SB 19-173 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.

PERA and Social Security

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One of the most popular topics discussed on PERA on the Issues is Social Security. From federal proposals to repeal the Windfall Elimination Provision (WEP)/Government Pension Offset (GPO) to the latest Social Security trust fund depletion date estimates, there is a lot of information to digest. For most Colorado public employees, Colorado PERA serves as a substitute for Social Security and may therefore affect anticipated Social Security benefit amounts.

History of PERA and Social Security

When Colorado PERA was established in August of 1931, Social Security did not exist. After hearing from a group of state employees who wanted a way to plan and save for retirement, the Colorado General Assembly acted to create the State Employees’ Retirement Association (SERA). At first, only state employees were covered by SERA. Voluntary coverage under the plan was offered to school districts and local governmental entities in the 1940s and SERA was renamed the Public Employees’ Retirement Association to better reflect the broader membership in the association.

When the Social Security Act was passed by Congress in 1935, state and local governmental entities were specifically excluded from participating in Social Security. Congress questioned whether it could compel the states and their political subdivisions to include their employees in the system. Consensus thought at the time was that by requiring the states to participate, it may be considered unconstitutional under the Tenth Amendment to the U.S. Constitution as a levy of taxes on states and localities.

What is FICA?

FICA is a U.S. federal payroll tax (most PERA members only pay the Medicare tax). It stands for the Federal Insurance Contributions Act and is deducted from each paycheck. FICA helps fund both Social Security and Medicare programs, which provide benefits for retirees, the disabled, and children. The money you pay in taxes is not held in a personal account for you to use when you get benefits. Today’s workers help pay for current retirees’ and other beneficiaries’ benefits. Any unused money goes to the Social Security trust funds to help secure today and tomorrow for you and your family. Source: Social Security Administration.

In 1951, Congress added Section 218 to the Social Security Act, which allowed a state to independently decide whether or not to include some or all of its public employees in Social Security. Colorado executed a Section 218 agreement but narrowly defined the employees who would participate in Social Security. That same year, all school districts other than Denver Public Schools (DPS) were required to participate in PERA. (This was because DPS had their own separate retirement system at the time.)

Still today, most public employees in Colorado do not participate in Social Security (although a few Local Government Division employers participate in both PERA and Social Security). PERA serves as a substitute for Social Security; instead of paying the 6.2 percent FICA tax (made up of 5.3 percent for Old-Age and Survivors Insurance and 0.9 percent for Disability Insurance), most PERA members contribute a portion of their pay to the PERA trust funds that provide retirement, survivor, and disability benefit coverage, just like Social Security does.

Two separate federal provisions are in place today that may reduce a public employee’s or retiree’s Social Security benefit: the Windfall Elimination Provision and the Government Pension Offset. As a result, an anticipated Social Security benefit may be reduced due to participation in PERA. A PERA benefit, however, will not be reduced by any Social Security benefit received.

Windfall Elimination Provision (WEP)

In order to qualify for a Social Security benefit, workers must earn 40 credits (typically, working in a Social Security-covered job for 10 years). PERA members with at least 40 credits in Social Security, however, may have their worker benefit reduced by the WEP as a result of not contributing to Social Security while working for a public employer.

According to the Social Security Administration, Social Security benefits are intended to replace only some of a worker’s pre-retirement earnings, and lower-paid workers receive a greater replacement percentage of career average earnings than higher paid workers. Prior to the WEP being enacted in 1983, non-Social Security government workers had the advantage of receiving a Social Security benefit representing a higher percentage of their actual earnings. Congress passed the WEP to remove the advantage because these workers also qualified for a pension from a job for which they didn’t pay Social Security taxes.

Social Security and You

Because most PERA members do not participate in Social Security while working for a PERA employer, their anticipated Social Security benefit may be affected by the Windfall Elimination Provision and the Government Pension Offset. More details about PERA and Social Security can be found here, and online Social Security benefit reduction calculators are available for the WEP and GPO.

The law protects non-Social Security workers who receive a low government pension from having the WEP result in a smaller combined benefit by guaranteeing that the WEP will not reduce a Social Security benefit by more than one-half of the non-Social Security pension (so a PERA member would never end up with less overall as a result of the WEP). Furthermore, the maximum WEP reduction to a Social Security benefit in 2024 is $587, and the WEP does not apply to an individual with 30 or more years of substantial Social Security earnings (and it is prorated for 21-29 years of substantial earnings).

Government Pension Offset (GPO)

The GPO applies to PERA retirees who also receive a Social Security spousal or widow(er) benefit and reduces the Social Security benefit by two-thirds of the PERA benefit. “Dependent” benefits were established in the 1930s to compensate spouses who stayed home to raise a family and were financially dependent on the working spouse. According to the Social Security Administration, now that it is common for both spouses to work, the GPO requires the “dependent” benefit to be offset by the dollar amount of their own retirement benefit, and it ensures the benefits of government employees who do not pay Social Security taxes are treated the same as workers in the private sector who pay Social Security taxes. Because the average PERA benefit is usually larger than the average Social Security spousal benefit, an “average” PERA member’s spousal benefit may be eliminated by the GPO.

Learn more about Colorado PERA and Social Security here.

Retirement Roundup: How much retirement savings will you need?

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

How much retirement savings will you need? Try 16.4 times your salary | USA Today
One of the most challenging elements of saving for retirement is figuring out how much money to sock away for it. While it’s possible to estimate some of your senior living costs, factors outside your control, like inflation, tax increases, and health problems, can render your savings insufficient even if you’ve done a pretty respectable job of building a retirement nest egg. Now when you sit down to estimate how much income you’ll need to retire with, it’s common to calculate that number as a multiple of your ending salary. For example, investing giant Fidelity says older workers should aim to sock away 10 times their ending salary by age 67. But global professional services firm Aon disagrees, and in a recent report, it finds that the average retiree will need 16.4 times his or her ending salary to cover the cost of retirement.

Retired people share the secrets of early retirement | MarketWatch
The idea of retiring early might sound heavenly, but there’s plenty to learn before taking the leap. One person asked Quora, in a questions-and-answers forum, “What is something that almost nobody knows about retiring early?” Many answers were from people who retired in their 50s, either because they chose to retire or were forced to leave. A few responses were from those of the “Financial Independence, Retire Early” (FIRE) movement, where people quit their jobs in their 20s and 30s and live off of the money they saved while living frugally and investing. The upshot: Depending on how you prepare, early retirement can be a blessing or a curse.

Why a Nobel laureate’s plan to use Social Security to fix retirement won’t work | Forbes
Nobel Prize-winning economist Richard Thaler made a splash recently by slamming 401(k)s and promoting Social Security. It was a bit surprising given Thaler’s conservative bent. He proposed that the Social Security Administration should get into the annuity business by allowing retirees to direct some of their retirement savings toward their Social Security balances to beef up their monthly payments. Thaler wants to solve a problem that all Americans with 401(k) and IRA plan balances face. How do you take $92,000 — the median level of holdings for workers approaching retirement age — and make it last a lifetime? That is, how do you avoid outliving your money? Unfortunately, there are three problems with this proposal.

Howdo Medicare options factor into retirement plans? | Kiplinger
If you have a financial adviser, he probably spends a fair amount of time talking about the risks you’ll face in retirement. He’ll test for risk tolerance and discuss how your investing philosophy should change as you age. He’ll set up an income plan and help find ways to fill any gaps between the income sources you can rely on and what you think you’ll need for the lifestyle you want. He may even get into the rising costs of health care — especially long-term care — and how to better provide for those costs. But what a lot of advisers don’t talk about, or help their clients navigate, are the health care coverage options available through Medicare when you become eligible at age 65. That’s a big omission, considering that in a 2018 online survey by the Nationwide Retirement Institute, conducted by The Harris Poll, seven in 10 respondents said they wished they better understood Medicare coverage.

Gen X struggling most with retirement readiness and confidence | PlanSponsor
A recent report, “What is ‘Retirement’? Three Generations Prepare for Older Age,” prepared by the Transamerica Center for Retirement Studies, looked at the retirement outlook of Baby Boomers, Generation X and Millennials. All generations — Baby Boomers, Generation X and Millennials — associate retirement with freedom, enjoyment, and being stress-free. Among those of all ages, 72 percent are looking forward to retirement. Among Baby Boomers, this is 81 percent. For Gen Xers, it is 70 percent, and Millennials, 68 percent. However, among all age groups, 76 percent think people in their generation will have a harder time achieving financial security in retirement than their parents. This is slightly lower for Baby Boomers (69 percent), but higher for Generation X (81 percent) and Millennials (79 percent).

Saving for retirement vs. college? There’s a clear winner | Cincinnati.com
Given that the average 2018 college graduate with loans left school with about $29,800 in student debt (according to studentloanhero.com), the urge to shield your kids from such a crushing burden is probably as strong as ever. The best-case scenario is that you save for retirement and for your kids’ college fund simultaneously. But if you’re thinking of putting all or the majority of your savings towards college costs, resist. There are no scholarships for retirement. There are no loans. If you’re not setting enough money aside now, you’ll be out of luck once retirement arrives. And if you look at retirement as basically being ‘unemployed’ for 20 or 30 years, that’s a daunting, if not terrifying, prospect. Even scarier? You then become your kids’ problem at some point. Do you really want to spend retirement living in their basement?

Public Service Recognition Week

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May 5 – 11, 2019

Celebrated the first full week in May since 1985, Public Service Recognition Week (PSRW) is a time set aside to honor the men and women who serve our nation as federal, state, county, and local government employees.

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

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

PERA members serve across Colorado:

  • There are five divisions of PERA: State, School, Local Government, Denver Public Schools and Judicial.
  • Members in PERA’s State Division work for or retired from state agencies and instrumentalities of state government, as well as institutions of higher education.
  • Members in the School Division and the DPS Division are current and former teachers, school administrators, and other critical support personnel serving 900,000 students across 178 school districts.
  • Members in the Local Government Division are working for or retired from 140 cities, towns, a county, and a variety of special districts in Colorado.
  • Members in the Judicial Division, PERA’s smallest division, are the working and retired judges in district and county courts, as well as the Colorado Court of Appeals and the Colorado Supreme Court.
Colorado PERA Membership
as of February 2019

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

Annual “mini-college” for senior citizens in Pueblo draws 350 students – Canon City Daily Record
Pueblo Community College (PCC) Fremont Campus has been conducting Senior Mini College for 34 years. It takes dedication and commitment from each PCC Staff member to help organize and plan this event. Many currently enrolled PCC students have volunteered to help the Senior Mini College week participants.

How the Department of Human Services investigates welfare fraud – Sterling Journal-Advocate
A fraud investigation can be triggered a number of ways: through an anonymous letter or phone call, someone comes across something that the person accidently put on their application that they lied to DHS about, or someone sees something on social media.

Therisky business of trapping mountain lions – The Durango Herald
Wildlife officials have trapped and killed five mountain lions near a Colorado town after residents reported aggressive behavior by the predators.

Broomfield High School hosts an empowerment conference for young women – Broomfield Enterprise
The women’s leadership class at Broomfield High School, made up of about 27 female students, is supervised by Lena Carroll and Andrea Binion and has been in place about four years.

How multiple Estes Park agencies are upgrading the area’s infrastructure – Estes Park Trail-Gazette
Through an Intergovernmental Agreement, the Upper Thompson Sanitation District (UTSD) and the Town of Estes Park (TEP) are partnering to complete a utility infrastructure project that will impact the Fish Creek Lift Station and Mall Road. The Fish Creek Lift Station and approximately 1,000 linear feet of 14-inch diameter cast iron force main was constructed in the mid-1970s.

Governor Polis’ Public Service Week Proclamation