Month: November 2023

News You Should Know: How Colorado’s Special Session Will Affect Your Finances

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What the Colorado Legislature Passed During the Special Session and How It Will Affect Your Wallet | The Colorado Sun

After voters rejected Proposition HH, state lawmakers convened for a special session focused on property tax relief. In all, lawmakers passed seven bills aimed at providing financial relief and assistance, including property tax relief and increased TABOR refunds for lower earners.

Federal Lawmakers Seek 401(k) Plans for Teen Savers in New Bill | Bloomberg Law

Lawmakers introduced a bill that would change federal law to make it easier for 18-to-20-year-olds to save for retirement in employer-sponsored plans. The bill, known as the Helping Young Americans Save for Retirement Act, would lower the minimum participation age in plans like 401(k)s from 21 to 18.

Why It’s So Tough to Reduce Unnecessary Medical Care | CBS News

A recent report shows that despite efforts to reduce unnecessary health care spending in Colorado, spending on so-called “low-value” care — such as unneeded testing — has barely changed. Despite financial incentives and patient demands to provide more care than is necessary, one Colorado hospital has found some innovative ways to cut waste.

The IRS Makes Tax Filing Simpler for Next Year With Long-Awaited Improvements | Yahoo! Finance

Thanks to a boost in funding, the IRS is rolling out a number of changes that should make tax filing season a little easier. Updates include better customer service staffing, expanded electronic communication options and a more user-friendly tax refund tracker, with more changes on the way.

News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

Recap of PERA Board’s November 2023 Meeting

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The PERA Board of Trustees met on Friday, Nov. 17 for its final regular meeting of 2023.

Below are highlights of some of the major topics of discussion and important actions the Board took during the meeting.

2024 Board election

The Board approved the calendar for the 2024 Board election, during which four seats will be up for election: Two in the State Division, one in the School Division, and one in the Denver Public Schools Division.

Candidacy information will be available to members of those divisions in early January, and the election will take place in May.

Member contribution interest rate

Every PERA Defined Benefit Plan account accrues interest, compounded annually. If a PERA member leaves PERA-covered employment and requests a refund of their account, they receive their contributions, the interest earned on that balance, and any applicable employer match. If that member keeps their account with PERA, the balance will continue to accrue interest and the member has multiple options upon reaching retirement eligibility, including choosing a lifetime monthly benefit.

The Board is responsible for setting the interest rate every year; it currently stands at 3 percent. The Board’s policy, updated in 2020, evaluates the interest rate as a component of members’ overall retirement benefit. After discussing the issue, Trustees voted to keep the interest rate at 3 percent for 2024.

Asset/liability study update

In September, the Board kicked off an important analysis of PERA’s investment portfolio and asset allocation strategy known as an asset/liability study. The project will help the Board determine if it needs to make any changes to PERA’s mix of investments. PERA’s strategic asset allocation is the primary driver of investment returns, and the Board adopted its current allocation following the last asset/liability study in 2019.

The Board’s investment consultant, Aon, said in the meeting that it continues to work with PERA’s investment staff to gather and analyze information. That process will continue over the next few months, with additional discussion in January.

READ MORE: Asset/Liability Study: A Guide to Building a Strategic Portfolio

PERA-related legislation

With the 2024 General Assembly around the corner, the Trustees discussed the upcoming session and potential PERA-related legislation. The conversation included two bills that lawmakers on the Pension Review Commission expect to introduce: One that aims to expand the number of PERA retirees who can work for school districts without reductions in their benefits, and one that proposes a $700 tax credit for qualifying retirees in tax years 2024 and 2025.

READ MORE: Pension Review Commission Eyes Two Bills for 2024 Legislative Session

The Board’s first meeting of 2024 will take place on Jan. 19.

Pension Review Commission Eyes Two Bills for 2024 Legislative Session

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The Pension Review Commission, a legislative panel that meets in between regular legislative sessions, plans to introduce new PERA-related bills in the 2024 Colorado General Assembly.

The Commission has the responsibility of overseeing PERA and proposing legislation that could affect the plan and benefits. It met in October to discuss ideas for legislation, and committee members voted to move forward with two PERA-related bill drafts.

PERA-related bill drafts

The Commission drafted one bill that relates directly to PERA and Plan benefits. Titled Additional PERA Service Retirees for Schools, the bill draft aims to expand the number of PERA retirees who can work for school districts without reductions in their benefits. Under current law, school districts can hire 10 such retirees when there is a critical shortage. The bill draft, if passed, would remove the critical shortage requirement and allow larger districts to hire more retirees.

The other bill draft aims to provide some financial assistance to PERA retirees in the form of a temporary tax credit. That bill draft, PERA Retiree Refundable Income Tax Credit, would provide a tax credit of $700 for qualifying retirees on their tax returns for tax years 2024 and 2025. Lawmakers introduced a similar bill last year, but it didn’t pass.

What’s next?

The PERA Board of Trustees typically discusses PERA-related bills after they’re introduced at the Capitol and will take a formal stance on any that could affect PERA’s finances.

Legislators on the Pension Review Commission will introduce their bills in the next legislative session, which begins in January. The bills will follow the usual process of making their way through the legislature before passing or failing.

PERA On The Issues will keep track of PERA-related legislation throughout the session and provide updates when they’re available.

Subscribe to our biweekly newsletter to stay in the loop.

News You Should Know: IRS Updates 401(k)/IRA Contribution Limits for 2024

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401(k) Limit Increases to $23,000 for 2024, IRA Limit Rises to $7,000 | Internal Revenue Service

The IRS announced new, higher contribution limits for retirement accounts in 2024. The limit for contributing to a 401(k) or 457 plan next year will be $23,000 (up from $22,500 in 2023) and the IRA limit will rise to $7,000 (up from $6,500). The catch-up contribution limit for 401(k)/457 plans remains unchanged at $7,500.

Jared Polis Pushes to Pay Off Colorado’s School Funding Shortfall | The Colorado Sun

Colorado Gov. Jared Polis released his 2024-2025 budget proposal, and it calls for fully funding K-12 education in the state for the first time since 2009. The budget proposal also calls for increases in teacher pay and additional investments in Colorado’s workforce. The state legislature is ultimately responsible for setting the state’s budget, and that process will take place during next year’s General Assembly.

How the U.S. Retirement System Stacks Up Against the Rest of the World | Marketplace

A new ranking of retirement systems around the world puts the United States in the middle of the pack — 22nd out of 47 systems. Here’s a look at the factors that went into the rankings and what’s keeping the U.S. from being ranked among the best in the world.

Five Financial Moves to Make as Year’s End Approaches | Kiplinger

The end of the year is fast approaching, and it’s a great time to take stock of your finances and any goals you set for the year — and start thinking about next year. Here are a few important items to consider in your year-end review.

News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.