While the proposed conversion of Pinnacol Assurance from a quasi-public entity to a private one—and its potential financial implications for Colorado PERA—was the subject of discussions during the recently concluded legislative session, lawmakers did not move forward on the issue. Supporters of privatization had been pursuing a ballot measure on the topic, but that proposal is also off the table as stakeholders discuss other options for the workers’ compensation insurer.
The 2026 legislative session ended in mid-May after 120 days during which lawmakers introduced and debated hundreds of bills. Here are some over-arching themes from the session, from bipartisan work to the major task of passing a balanced budget.
The Federal Reserve has a new chair for the first time in nearly a decade. Kevin Warsh, who previously served as a governor on the Fed’s board, is replacing outgoing chair Jerome Powell. He takes over the central bank during a challenging period when inflation remains above the Fed’s 2% target.
If you’re turning 65 soon, you’re approaching a major milestone in life that brings with it some important decisions that can affect your finances in retirement. Take this quiz to test your knowledge on topics like Medicare, Social Security, and longevity.
News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.
It’s no secret that Social Security is facing financial trouble in the near future; the program is expected to deplete its reserves in less than ten years, according to the latest estimates.
There have been many suggestions for improving Social Security’s finances, one of which would involve requiring all public employees to participate in Social Security. Some public-sector pension plans—like Colorado PERA—serve as a replacement for Social Security, so neither workers nor their employers contribute via payroll deductions.
However, such a shift in federal policy could have unintended negative consequences, according to a recently released report from the Coalition to Preserve Retirement Security (CPRS) and benefits consulting firm Segal. (The Colorado PERA Board of Trustees employs Segal as its actuarial consultant.)
Many states have been providing their public employees with retirement benefits longer than Social Security has been around. For example, the Colorado General Assembly created Colorado PERA in 1931, four years before the federal government established Social Security.
It wasn’t until 1950 that Social Security began accepting state and local government workers into the program. Colorado was among the states that stuck with its own plan to provide retirement, disability, and survivor benefits to the majority of its public workforce (some PERA members and members of other public pension plans may contribute to both a pension and Social Security).
Note: If you’re a PERA member who has earned a Social Security benefit from other employment, you’ll receive benefit payments from both PERA and Social Security in retirement. Learn more on the PERA and Social Security page.
According to the CPRS report, more than four million public employees across the country today are not covered by Social Security, and nearly 250,000 of them are in Colorado.
The impact of mandatory Social Security
The potential implications of requiring participation in Social Security can be difficult to predict, since each state or local government and plan is different and could take a different approach.
For states that would opt to preserve existing plans and also join Social Security, there could be significant added costs. Employees and employers both contribute 6.2 percent of payroll through Federal Insurance Contributions Act (FICA) taxes. Adding those contributions to existing payroll deductions for public employee retirement benefits would eat into workers’ paychecks and put financial strain on school districts, state and local governments, and other public employers.
The CPRS report estimates the cost of additional contributions nationwide to be somewhere between $45 billion and $60 billion in the first five years. In Colorado alone, mandatory Social Security could cost more than $2.5 billion, according to the report.
There’s also the potential impact on existing retirement plans to consider. Even if existing plans closed to new members to try to offset the added cost of FICA taxes, for example, the plans would still have to pay retirement benefits their members had earned. And without contributions coming in from working members and their employers, those plans would face additional risk and uncertainty.
In addition, public retirement plans are structured to attract and retain qualified public employees and may provide better benefits that Social Security, especially for workers in demanding and dangerous positions. For example, plans that cover first responders often allow members to retire earlier than plans that don’t. Forcing all employees into Social Security could remove this benefit and make it harder to hire and maintain a talented public workforce.
Requiring all public employees to participate in Social Security isn’t a sure bet when it comes to shoring up the program’s finances. While increasing the number of participants would increase the amount of money coming into the Social Security trust funds, those new members would also add liabilities—earned benefits—over time, leading to additional expenses for Social Security.
Improving the financial sustainability of the Social Security program is an important goal, and one that will likely require a great deal of discussion between legislators, government officials, and other stakeholders.
While requiring public employee participation may be a part of that conversation, it’s important to keep in mind the potential impacts on employees, employers, governments, and taxpayers who could face additional costs, uncertainty, and other risks.
The latest estimates show Social Security is likely to deplete its reserves in less than a decade, which could lead to benefit reductions if Congress doesn’t take action before then. A recent proposal calls for shoring up the system by limiting benefit payments for higher earners. This article examines the pros and cons of that option as well as other proposals for improving Social Security’s funding.
An executive order will soon make it easier for private-sector employees to enroll in a retirement plan if they don’t have one at work. The order establishes a new website, which will launch in 2027, that allows workers to compare and enroll in privately-run individual retirement accounts (IRAs). Eligible workers can also receive matching contributions from the federal government.
You may be thinking regularly about retirement and making sure your finances are in order, but how well have you prepared for other aspects of aging? A new survey from the MIT AgeLab and John Hancock Insurance, called the Longevity Preparedness Index, goes beyond money to assess readiness on a variety of factors, such as social support, health, and ease of access to your home.
Cities in Florida and Arizona may be traditionally popular spots for people looking to relocate in retirement, but locations around the country are gaining ground. This list examines some cities with high percentages of retirement-age citizens and the positive and negative factors that may influence a decision to move there. While no cities in Colorado made the list, one city in a neighboring state came in near the bottom while another ranked in first place.
News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.
That’s a wrap on the 2026 legislative session. Over the course of 120 days, legislators introduced and debated more than 600 bills and approved a State budget for the next fiscal year.
Legislators also introduced seven bills and one resolution related to PERA. Of those seven bills, six passed and will become law, pending Governor Polis’ signature. Effective dates for passed bills vary and current law applies until the bills take effect.
House Bill 1026: Expanding Plan Options for PERA – Makes changes to PERA provisions related to purchasing service credit and PERA’s 401(k) and 457(b) plans. Under current law, PERA members can purchase service credit based on previous periods of employment; this bill allows for limited purchases of service credit for periods of unemployment. The bill also requires all PERA-affiliated employers to offer the PERAPlus 401(k) and 457(b) plans, in both pre-tax and Roth options, to their employees.
House Bill 1027: BOCES Definition & Executive Director – Under current state law, certain PERA retirees are allowed to return to work for a PERA-affiliated employer without facing a reduction in their PERA benefit. This bill adds executive directors of boards of cooperative services (BOCES) to the list of approved retirees.
House Bill 1146: Allow Approved Facility Schools Participate in Public Employees’ Retirement Association – Allows approved facility schools—programs that serve students with behavioral issues and other special needs—to apply for affiliation with PERA to provide retirement benefits to their employees.
House Bill 1400: Adjust Public Employees’ Retirement Association’s Allocations to Trust Funds – Gives PERA flexibility to allocate the State’s annual $225 million direct distribution to whichever division trust funds would help minimize the likelihood of triggering the Automatic Adjustment Provision, as well as redirect a portion of employers’ health care trust fund contributions to instead help pay off pension liabilities. Learn more about this bill.
Senate Bill 023: School Finance Act – The primary purpose of this bill is to establish public school funding for the 2026-2027 budget. It also adds vice principals, assistant principals, and assistant superintendents to the list of positions eligible to work after retirement without limits under the “critical shortage” designation.
Senate Bill 151: Modify Public Employees Retirement Association Allowed Affiliation and Board of Trustees – Expands PERA membership to include employees of DSST chartered under Denver Public Schools, which had previously been exempt from membership as part of the legislation authorizing the merger of Denver Public Schools Retirement System and PERA effective January 1, 2010, and also makes the ex officio Trustee from the Denver Public Schools Division a voting member of the PERA Board.
House Bill 1062, which would have removed the cap on state income tax deductions for pensions and other annuity income, failed to make it out of committee.
In addition to the aforementioned PERA-related bills, the Legislature passed Senate Joint Resolution 016, which recognizes the importance of retirement security, encourages workers to seek out financial education to improve their retirement readiness, and highlights the importance of lifetime income options in the PERA Defined Contribution Plan and PERAPlus 401(k)/457 Plans.
Legislators also passed House Bill 1331, which suspends interim committee activity for 2026. That means legislative committees that typically meet in between sessions—such as the Pension Review Commission and Pension Review Subcommittee—will not meet this year.
Next steps
For any bills the Governor has not yet signed, he has 30 days after the session ends to take action. If the Governor doesn’t sign or veto a bill, it will automatically become law after the 30 days.
When preparing for retirement, you might think the first year after leaving full-time employment will provide the biggest challenge as you adjust to your new lifestyle. However, it turns out many people have a lot of plans for year one, and it’s actually a couple years in that they begin to realize how much their life has changed. Here are some tips for making the adjustment a little easier.
New research provides evidence that state-run retirement plans with automatic enrollment continue to encourage private-sector employers to offer plans of their own, expanding access to retirement savings. According to Pew, Colorado had the highest rate of new plan formation among states with so-called “auto-IRAs” in 2023, the first year of the Colorado SecureSavings program.
Two new bills under consideration in Congress aim to make it easier for caregivers to save money for retirement. If passed, the bills would remove some of the current limits on retirement plan contributions for people who leave the workforce to care for a loved one, particularly with regard to Roth IRA and catch-up contributions.
People are increasingly turning to generative AI tools like ChatGPT for financial advice, including planning for retirement. Experts say AI is good at some aspects of financial planning and the technology is improving rapidly, but it’s important to use caution as AI still has its limits and isn’t bound by the same regulations as human advisers.
News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.
The Colorado General Assembly gave its approval to a bill that helps keep the PERA Defined Benefit Plan on track to meet its funding goal by giving PERA additional flexibility in how it allocates contributions to the Plan.
Legislators passed House Bill 1400, which now heads to Governor Jared Polis for action.
Background
In 2025, PERA’s actuaries conducted an analysis of the Automatic Adjustment Provision (AAP), the mechanism included in Senate Bill 18-200 that automatically adjusts member and employer contributions, retiree annual increases, and the State’s annual $225 million direct distribution based on PERA’s funding progress. The goal was to examine how well the AAP has been functioning so far and consider whether any proactive changes are warranted.
While the AAP has largely worked as intended, the actuaries identified two modifications to help reduce the chance of triggering automatic adjustments in the near future without jeopardizing our funding progress. Both changes involve giving PERA more flexibility in how it allocates contributions to the trust funds.
Flexibility in allocating the State’s direct distribution
Every year on July 1, the State of Colorado makes a direct payment of $225 million to PERA. Under current state law, PERA is required to allocate the $225 million to three of the five division trust funds (State, School, and Judicial) proportionally based on total payroll.
The division trust funds differ in their funding levels and some are closer to reaching full funding than others. This disparity is likely to continue, which results in the less-funded divisions having a disproportionate impact on the annual AAP calculation and triggering automatic adjustments if their contributions are not keeping up with the amount needed each year to reach full funding.
House Bill 1400 would allow PERA to allocate the State’s direct distribution on an actuarial basis, meaning the money will be deposited to whichever fund(s) would reduce the likelihood of triggering the AAP in the future.
Redirecting a portion of employer contributions to the health care trust fund
The second provision of the bill reduces employer contributions to PERA’s health care trust fund from 1.02% of employee salaries to 0.52%. The 0.50% reduction is then redirected to the pension trust funds to help pay down the unfunded liability.
The health care trust fund is much closer to full funding than the pension trust funds, so this change will make sure those contributions are going where they’re needed most. Employer rates would remain the same, with incrementally more money going to pay off the unfunded liability and keeping PERA on track for full funding.
What’s next?
If the Governor signs House Bill 1400 into law, the changes take effect July 1, 2026.
The 2026 legislative session is still underway and other PERA-related bills remain under consideration. Visit our 2026 Proposed PERA-Related Legislation Status article for the latest information.
Colorado PERA provides lifetime retirement income to the state’s public employees and that poses a unique challenge: Estimating the cost of member benefits for many years into the future and ensuring the plan has enough money to pay them.
In discussions about how PERA is doing in that regard, the term “unfunded liability” often comes up.
It’s a term that isn’t always well understood, but examining a plan’s unfunded liability and the factors behind it can provide members and other stakeholders with a better sense of the plan’s financial footing and its future.
What is unfunded liability?
Unfunded actuarial accrued liability (UAAL)—or simply unfunded liability—is a common term used in funding for public pension plans. It refers to the gap between the amount of money a plan has in its trust funds and the value of current and future benefits members have earned to date.
In other words, UAAL is like a debt owed to members. The liability is the money the plan will eventually have to pay, and the portion that isn’t covered by current plan assets is considered “unfunded.”
Unfunded liability can be a helpful tool for measuring a pension plan’s financial health. While many plans carry some level of unfunded liability, UAAL that continues to grow can be a sign of underlying issues that may jeopardize the financial sustainability of the fund, such as inappropriate actuarial assumptions or insufficient contribution levels.
By the end of 2016, PERA’s unfunded liability had grown large enough that it prompted recommendations from the PERA Board of Trustees and responsive action from the Colorado General Assembly. Senate Bill 200, enacted in 2018, included various reforms designed to pay down PERA’s unfunded liability with the goal to fully fund the Defined Benefit Plan within 30 years, and PERA continues to make progress toward that goal.
The history of PERA’s unfunded liability
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At the end of 2000, PERA was over 100% funded. That means the plan’s trust funds—which contain all the money that comes into the plan (including investment earnings) and from which the plan pays benefits—held more than what was needed to pay all earned benefits to date. By the end of 2016, the funded percentage had fallen below 60%, driving the Board’s recommendations and the bipartisan efforts of the General Assembly to pass Senate Bill 200 in 2018. By the end of 2024, PERA had improved its funding level to 69%, while also mitigating risk through the adoption of more appropriate economic and demographic assumptions over this eight-year period.
While various factors have contributed to the increase in PERA’s unfunded liability over the past two and a half decades, three of those factors have had the largest impact:
Assumption changes aimed at better reflecting reality: To ensure PERA’s projections are as accurate as possible, the Board regularly reviews and adjusts its actuarial assumptions—which include things like the expected lifespan of the retiree population and expected salary trends in public employment—through a process known as an actuarial experience study. Over the years, adjustments to assumptions resulting from these studies have gone both ways, with some changes reducing liabilities and other changes increasing liabilities. Certain adjustments, such as lowering the portfolio’s assumed rate of return and the adoption of generational mortality, are more impactful than other assumption changes and resulted in a net growth in PERA’s unfunded liability.
Plan experience worse than expected: Actuarial assumptions help pension plans like PERA make projections about the cost of benefits decades into the future. When reality differs significantly from expectation—for example, shifts in demographics and salaries for public employees—they affect the projections for how much money PERA will need to have on hand to pay retirement benefits.
Investment returns worse than expected: PERA’s investment portfolio has performed well relative to benchmarks over the long term, but investing in the markets exposes the portfolio to risks; like any investor, PERA is not immune to the effects of major market downturns. For example, the dot-com bubble in the early 2000s and the 2008 financial crisis led to unprecedented losses in financial markets. These major events resulted in negative investment returns far beyond general expectations.
When it comes to reducing PERA’s unfunded liability, the largest factor has been changes to plan provisions, such as the reforms included in Senate Bill 1 in 2010 and Senate Bill 200 in 2018. Those reforms include higher contributions from working members and their employers, an annual $225 million direct distribution from the State, lower annual increases for retirees, and increased age and service requirements for a full retirement benefit, all of which have helped put the plan on more solid financial footing.
PERA’s enhanced contribution structure, which better ensures sufficient funding to support current benefit accruals, is a key element to maintaining PERA’s sustainability. Strong investment returns on those contributions also make a difference. When the portfolio achieves a return that’s better than the assumed rate of return, that investment income increases the value of plan assets and reduces the unfunded liability. PERA’s assets have grown faster than liabilities over the past decade, and that trend is expected to continue.
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Getting PERA to full funding
Unfunded liabilities don’t accrue overnight, and it can take many years to eliminate that debt. PERA’s goal is to reach full funding by 2048, and as of the date of our most recent Annual Comprehensive Financial Report, we remain on track to meet that goal.
The Automatic Adjustment Provision automatically adjusts, as necessary, member and employer contributions, retiree benefit increases, and the State’s annual $225 million direct distribution to PERA, based on funding progress. This mechanism helps ensure we don’t fall behind on the target of achieving full funding by 2048.
The PERA Board of Trustees also plays an important role. While Trustees can’t control factors such as inflation, public employee salaries, or the number of plan participants, the Board regularly monitors and adjusts the factors in its control, such as actuarial assumptions, the amount of risk in the investment portfolio, and plan costs.
Reducing the unfunded liability is a challenge, but it’s an important one to tackle. Through a combination of sensible policy updates, good plan governance, and fiduciary care, PERA is making progress toward full funding and a more secure future for Colorado’s retired public employees.
State lawmakers are working on finalizing the fiscal year 2026-2027 budget after months of work to identify approximately $1.5 billion in spending cuts. Medicaid costs account for a large portion of state spending and were also a major focus of budget cuts. Once the Legislature approves a budget, it will go to Governor Jared Polis for action.
Like many public employees across the country, most PERA members do not participate in Social Security for their retirement or survivor and disability benefits. There are sometimes calls to mandate Social Security for all public employees, but a new report highlights the significant added costs and other issues that could arise from requiring participation.
When do American workers actually retire? It can vary widely based on personal circumstances, but according to some research, the average retirement age has been inching upward over the past several decades.
April is Financial Literacy Month, which provides a great opportunity to test your own knowledge about money. This quiz from NerdWallet covers the basics on topics such as taxes, saving, and debt.
News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.
There’s been a trend in recent years of states passing legislation requiring personal finance education for high school graduation. As of the end of 2025, 39 states—including Colorado—now have a statewide financial literacy requirement in place.
The number of American workers requesting hardship withdrawals from their 401(k) accounts hit a new high last year, according to a report from Vanguard. The increase in withdrawals could be due to increased financial pressure as well as legislation that made it easier to withdraw money. At the same time, a separate report found account balances were up in 2025.
Beginning later this year, parents will be able to open so-called “Trump accounts” to jumpstart their children’s savings. The accounts come with a $1,000 starting contribution, and like other savings accounts, they also come with a number of rules and regulations around who can open an account, who can contribute and how much, and when distributions are allowed.
Many workers are unaware of the Saver’s Credit, which allows eligible individuals to receive a tax credit for a portion of their contributions to an employer-sponsored retirement plan. The maximum credit is $1,000 for individuals ($2,000 for married couples filing jointly) and workers must meet income requirements in order to claim the credit.
News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.
The Colorado PERA Board of Trustees met in Denver on Friday, March 20.
The Board’s agenda included discussions and action items related to Board elections, the 2026 legislative session, PERA funding levels, and more.
Additional details, including meeting materials and a recording of the meeting livestream, are available on the Board Meeting Archive page.
Board election update
Elections for open seats on the Board are held each May, and Trustees approved the list of candidates and voted to proceed with elections for two open seats this year:
School Division: one 4-year term to be filled by an active member currently employed in the School Division.
State Division (Higher Education): one 4-year term, to be filled by an active member currently working for a Higher Education employer in the State Division.
Ballots will be mailed in early May to active members in the School and State divisions. Voting will be available by paper ballot, phone, and online via the election website or the Colorado PERA mobile app and member portal.
The Board will announce the results of the election at its June 25 meeting.
2026 legislative session
CEO/Executive Director Andrew Roth and Director of Public and Government Affairs Michael Steppat provided the Board with an update on the 2026 legislative session, which began in January and will continue through mid-May.
As of the meeting date, legislators had introduced four PERA-related bills and one resolution. Two of those bills have passed: House Bill 1027 allows executive directors of boards of cooperative services (BOCES) to return to work after retiring for unlimited amounts of time without facing a reduction in their PERA benefits, and House Bill 1146 allows approved facility schools—which serve students whose needs aren’t being met in a regular classroom—to apply for affiliation with PERA to provide retirement benefits to their employees.
Senate Joint Resolution 016, which recognizes the importance of retirement security, encourages workers to seek out financial education to improve their retirement readiness, and highlights the importance of lifetime income options in the PERA Defined Contribution Plan and PERAPlus 401(k)/457 Plans, has also passed.
House Bill 1026 remains under consideration. That bill would allow PERA members to purchase a limited amount of service credit for periods of unemployment and also require all PERA-affiliated employers to offer the voluntary PERAPlus 401(k) and 457 plans, in both pre-tax and Roth options, to their employees.
To better understand the context and history of PERA’s unfunded liabilities—i.e., the gap between the amount of money in the division trust funds and the value of current and future benefits owed to PERA members—the Board engaged in discussions with consulting firms Segal, Aon, and Ailman Advisers.
While various factors have contributed to changes in unfunded liabilities over the past two and a half decades, the session centered on factors that have had the largest impacts and included a review of which factors the Board can and cannot control.
Unfunded liabilities pose a challenge to many public pension plans, but PERA is on a path to full funding by 2048. As of Dec. 31, 2024—the date of our most recent Annual Comprehensive Financial Report—we remain on track to meet that goal.
Market and portfolio update
Chief Investment Officer/Chief Operating Officer Amy C. McGarrity presented information on financial market performance so far in 2026. Oil and commodities have been strong performers year-to-date while other asset classes, such as global equities, have been largely flat or negative.
McGarrity also discussed the impact of the conflict in Iran, which has disrupted the supply of oil and other resources since the beginning of March. That conflict has affected markets around the world, McGarrity said, introducing significant uncertainty and volatility across various sectors.
The PERA Board determines PERA’s strategic asset allocation, which is the most significant factor influencing long-term investment performance and asset volatility. Maintaining a disciplined approach helps ensure PERA can meet its obligations throughout market cycles.
2026 meeting dates
The PERA Board plans to hold three more regularly scheduled meetings in 2026. Those dates are:
June 25
September 23 to 25 (planning session and meeting)
November 20
For more information on Board meetings, including recordings and meeting materials, visit the Board and Leadership page.
