Issues & Perspectives Archives

America Saves Week 2026: Do You Have a Savings Plan?

Posted on March 31, 2026March 31, 2026 by Kurt Sevits

News headlines often declare that Americans aren’t saving enough money. In fact, a recent survey by Bankrate found less than half of those surveyed had enough money to afford a $1,000 emergency expense.

April 6 through April 10 is America Saves Week, an annual initiative of the Consumer Federation of America, a nonprofit consumer advocacy organization. It promotes the value of saving money and the importance of making a plan to save.

The America Saves Week campaign encompasses five themes throughout the week to help make the process of building a saving plan less overwhelming. It’s all about taking small steps that make a big difference in your financial future.

Building a strong foundation

A strong financial foundation begins with knowing where you are and where you want to go. That means taking time to understand your income, track your spending, and identify your goals.

One of the easiest ways to strengthen your financial foundation is to automate your savings. When you schedule regular transfers from your checking to your savings account, you remove the temptation to spend first and save later. You can start small with just $10 or $20 from each paycheck and increase the amount over time.

Expect the unexpected

Whether it’s a flat tire, a medical bill, or a surprise home repair, unexpected expenses can happen any time. Having an emergency fund—even a modest one of just $500—can protect you from relying on credit cards or feeling stressed when something goes wrong.

That first $500 is your first win. From there, you can build toward a larger goal, like one month of living expenses, and eventually three to six months.

Dream big and plan with purpose

Beyond savings for emergencies, you might also be working toward a major milestone in life, such as buying a home, starting a family, or paying for education. Identifying the milestones that are important to you and being deliberate about saving can help focus your efforts and gives you something tangible to work toward.

Rewrite the debt narrative

Rewriting the debt narrative is all about shifting your mindset: Every payment you make, no matter how small, moves you closer to financial freedom and confidence.

Tackling debt can feel overwhelming, but two popular strategies can make it more manageable. The snowball method involves focusing on your smallest debt first for quick wins and motivation, while the avalanche method focuses on paying off your highest-interest debt first to save the most money over time.

Your story, your future

Whatever your savings goal, start small and build on that momentum over time. Financial success rarely happens overnight. It’s built through small, consistent habits that add up over time. Every intentional step you take today will help shape the life you want tomorrow.

PERA resources to build financial confidence

Our Financial Wellness Library contains articles on topics such as saving and planning, creating a budget, and getting ready to retire.

We also offer a variety of webinars—live and on-demand—to help PERA members better understand their benefits and retire with confidence.

MORE RESOURCES:

Report: Many Workers Struggle to Save for Retirement on Their Own

Posted on March 3, 2026March 3, 2026 by Kurt Sevits

A new report is shedding light on the challenges many workers continue to face when saving for retirement.

According to the National Institute on Retirement Security (NIRS), nearly half of working-age Americans don’t participate in any employer-sponsored retirement plan and struggle to reach recommended levels of savings. In fact, many have little to no savings at all, NIRS found.

Despite decades of policy changes and other efforts to bolster retirement security, it’s clear that many workers—especially those in the private sector—are still unable to save for retirement on their own.

The state of workers’ retirement readiness

For its report titled, “Retirement in America: An Analysis of Retirement Preparedness Among Working-Age Americans,” NIRS researchers used data from the U.S. Census Bureau’s Survey of Income and Program Participation. That data is as of December 2022.

Unsurprisingly, NIRS found that employees who have access to a retirement plan through work are much more likely to save money for retirement than those who don’t. Regardless of plan access, however, the analysis found most workers still aren’t saving enough.

Among all working-age adults (defined here as workers between the ages of 21 and 64), the median balance of defined contribution (DC) retirement accounts like 401(k)s was just $955 in 2022. Examining only accounts that had a positive balance and eliminating those with no savings at all, the median was $40,000. According to NIRS, workers with positive DC account balances had reached a median of just 18% of their recommended savings based on age.

There are many reasons why people might not save as much money as experts recommend, including competing financial priorities such as living expenses and debt.

Taking on debt to attend college, for example, can simultaneously improve a person’s access to employment and benefits while also making it more difficult to achieve savings goals. NIRS found that while adults who carry student loan debt are more likely to have and participate in a retirement plan through their employer, they also tend to have lower account balances and lower net worth.

Public pensions and retirement security

Access to and participation in a retirement plan is much higher in the public sector, where many employees have access to a defined benefit (DB) plan, also known as a pension. For example, NIRS found that 88% of public administration workers and 74% of educational service workers participate in a retirement plan while overall participation is around 50%. As of the end of 2022, just 17 percent of all American workers were participating in a DB plan.

A DB plan has the benefit of making saving for retirement easy—for most Colorado PERA members, enrollment in the PERA DB Plan is automatic and their contributions to the plan are set in statute. That means employees don’t have to opt in or decide how much to save. And when they retire, PERA members can count on receiving reliable and predictable monthly income they can’t outlive.

Colorado PERA also offers all members access to the voluntary PERAPlus 401(k) and some employers offer the PERAPlus 457 Plan, providing members with additional tools to ensure they have the savings they need to meet their retirement goals.

While saving for retirement continues to be a challenge for many American workers, PERA remains committed to providing a secure retirement to the hardworking Coloradans who serve our state.

Year in Review: Our Top Articles of 2025

Posted on December 15, 2025December 15, 2025 by Kurt Sevits

As the year wraps up, we’re taking a look back at the articles that captured the attention of PERA On The Issues readers in 2025. Here are our most-read articles of the year.

1. Congress passes Social Security Fairness Act and repeals WEP and GPO

Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) have long been topics of interest to PERA On The Issues readers. It’s no surprise that news about Congress passing the Social Security Fairness Act, which repealed both WEP and GPO, drew a great deal of attention. Our articles on the bill’s signing, initial estimates that the bill would take a year or more to implement, and then the announcement that the Social Security Administration was expediting benefit processing together accounted for more than a quarter of all visits to the blog this year.

2. IRS updates contribution limits and other tax provisions for 2026

With 2025 winding down, many people are already looking ahead to 2026 and making financial preparations for the new year. Our article highlighting inflation adjustments for retirement plan contribution limits, health savings accounts, tax brackets, and other tax provisions quickly became one of our most-read articles of the year.

3. Lawmakers propose and pass PERA-related legislation

During the 2025 legislative session, state lawmakers introduced seven bills that pertained to Colorado PERA, and our article tracking those bills throughout the session was the second most popular article of the year. Of those seven bills, four passed and became law.

4. New tax deduction for seniors included in federal legislation

The tax and spending bill commonly known as the One Big Beautiful Bill Act (OBBBA) included a new tax deduction for older Americans that takes effect for the 2025 tax year. The deduction—up to $6,000 per eligible taxpayer—applies to taxpayers who are 65 or older and begins to phase out for individuals with modified adjusted gross income over $75,000.

5. The OBBBA makes changes to health and food assistance programs

In addition to the new senior tax credit, the One Big Beautiful Bill Act made changes to federal assistance programs like SNAP and Medicaid. In particular, the bill established stricter guidelines for who can qualify for assistance under those programs. It also changed some enrollment processes for people who shop for health insurance on their own instead of receiving coverage through an employer.

We want to thank everyone who subscribes and reads PERA On The Issues. We appreciate your readership, and we look forward to helping you stay informed in the new year.

If you haven’t already, be sure to sign up for our biweekly newsletter to stay in the loop in 2026.

IRS Releases 2026 Tax Brackets, Contribution Limits, Other Tax Updates

Posted on November 20, 2025November 20, 2025 by Kurt Sevits

The IRS recently announced adjustments to marginal tax rates, retirement plan contribution limits, and other provisions that will be helpful for financial planning in the new year.

2025 0BBBA updates

While most of the changes below apply to tax year 2026, the federal tax and spending bill known as the One Big Beautiful Bill Act (OBBBA) made some important changes that apply to tax year 2025.

Notably, the standard deduction for 2025 increased to $15,750 for single tax filers and $31,500 for married couples filing jointly.

The OBBBA also established a new tax deduction for taxpayers who are at least 65 years old. For tax years 2025 through 2028, eligible seniors can deduct an additional $6,000 from their taxable income. The deduction phases out for individuals with modified adjusted gross income over $75,000.

2026 retirement plan contribution limits

In the new year, employees will be able to set aside more money in defined contribution retirement accounts such as 401(k), 403(b), and 457 plans.

The maximum amount a person can contribute to those plans is $24,500 for 2026, an increase of $1,000 from 2025. The catch-up contribution limit for most employees who are 50 or older will increase to $8,000.

Under the SECURE 2.0 Act, workers who are 60, 61, 62, or 63 have a higher catch-up contribution limit. That limit remains unchanged for 2026 at $11,250.

For individual retirement accounts (IRAs), the annual contribution limit will increase to $7,500 in 2026 and the catch-up contribution limit will be $1,100.

2026 HSA/FSA contribution limits

The amount of money workers can contribute to medical savings accounts also will increase in 2026.

HSA: Individuals enrolled in a high deductible health plan (HDHP) with a health savings account (HSA) will be able to contribute up to $4,400, and those with family coverage will be able to save a maximum of $8,750.
FSA: For workers who don’t have an HDHP with an HSA and instead use a flexible spending account (FSA), the maximum contribution for 2026 is $3,400. For plans that allow unused balances to roll over, the maximum amount that can be rolled over will increase to $680.

2026 tax rates

Below are updated marginal tax rates for single taxpayers and married couples filing jointly. Visit the IRS website for more tax tables and additional details.

Note that since these changes are for tax year 2026, they will generally apply to tax returns filed in 2027; 2025 tax rates will apply to returns filed in 2026.

37% for incomes over $640,600 ($768,700 for married couples filing jointly)
35% for incomes over $256,225 ($512,450 for married couples filing jointly)
32% for incomes over $201,775 ($403,550 for married couples filing jointly)
24% for incomes over $105,700 ($211,400 for married couples filing jointly)
22% for incomes over $50,400 ($100,800 for married couples filing jointly)
12% for incomes over $12,400 ($24,800 for married couples filing jointly)
10% for incomes of $12,400 or less ($24,800 for married couples filing jointly)

2026 standard deduction

The standard deduction for 2026 will increase to $16,100 for single tax filers and $32,200 for married couples filing jointly.

Taxpayers who are 65 or older can take an additional standard deduction, which is also adjusted for inflation. For tax year 2026, that amount is $2,050 for single taxpayers and $1,650 for married taxpayers or surviving spouses.

Visit the IRS website for more information on these and other tax changes.

PERA benefits and taxes

Colorado PERA benefits are subject to federal income tax, as well as applicable state and local taxes. PERA retirees who would like to update their tax withholding can do so by logging in to their secure member account or completing a paper Form W-4P.

Retirees and benefit recipients can expect to receive their 1099-R tax forms for tax year 2025 in January 2026.

Learn more at copera.org/taxes-on-benefits.

How Are Public Pensions Doing?

Posted on November 11, 2025November 11, 2025 by Kurt Sevits

A recent assessment finds the funding levels of public pension plans across the United States have generally improved in recent years despite market volatility and other challenges.

It’s a positive sign that while access to defined benefit pensions in the private sector has dwindled, many states remain committed to providing their public employees with a secure retirement.

Assessing the financial health of public pensions

Pew Research Center, a nonpartisan research firm, keeps track of the financial health of public pensions in all 50 states. Its latest report focuses on plans’ funded ratios, which provide a comparison between a plan’s assets and its future obligations to members. For example, if a plan is 70% funded, that means the plan currently has 70% of the money it would need to pay out all benefits its retirees and working members have earned to date.

In 2023, the most recent year for which Pew has data for each plan, the overall funded ratio for public pensions was 74%. Thirty-five out of 50 states reported funding ratios in 2023 that were higher than in 2022, according to Pew.

A key factor Pew examined is net amortization, a measure of whether a plan receives enough funding and income from investments to reduce its unfunded liabilities—the portion of benefit obligations for which the plan does not have money on hand—while also paying benefits. A positive net amortization trend means the fund is bringing in enough money to pay down debt. Pew found most plans, including Colorado PERA, showed positive amortization from 2019 to 2023.

PERA’s funded status

Thanks to the reforms included in Senate Bill 200 in 2018, PERA is on a path to full funding by 2048. As of December 31, 2024, the combined funded ratio for the five Division Trust Funds (State, School, Local Government, Judicial, and DPS) was 69.2%. In 2018, that number was only 59.8%. Senate Bill 200’s Automatic Adjustment Provision (AAP), which adjusts member and employer contributions, retiree annual increases, and the State’s direct distribution to PERA based on our funding progress, has been an important part of that improvement. The AAP is assessed every year so adjustments can be made as needed without requiring legislative intervention.

As of the end of 2024, PERA remains on track and adjustments via the AAP will not be necessary in 2026.

With budget discussions now underway at the State Capitol, PERA CEO/Executive Director Andrew Roth and Board Chair Hon. Rebecca R. Freyre recently wrote a guest opinion explaining the importance of consistent contributions in keeping PERA on track to reach its funding goal.

“While PERA is on a path to full funding by 2048, it’s important that we stay on that path and follow the plan laid out in SB18-200,” they wrote. “While we’re making progress, we need the General Assembly’s support to keep that momentum going. We all owe it to our members and retirees to stay the course.”

Read more on the Colorado Politics website.

Providing Retirement Security for Colorado

Posted on October 28, 2025October 28, 2025 by Kurt Sevits

October is National Retirement Security Month, and as we wrap up the month, we’re reflecting on how PERA has enabled generations of Coloradans who serve their communities to retire with dignity and peace of mind.

The state of retirement

Surveys often find workers who save for retirement on their own struggle to save enough to support their retirement goals. A recent survey by Schroders found more than 80 percent of workers with an employer-based retirement plan worry about outliving their savings, while more than half fear losing too much money if the stock market drops.

Social Security also faces an uncertain future; the latest forecasts show its trust funds are likely to run out of money in less than a decade, which would lead to future reductions in benefits unless Congress takes action.

PERA, however, is on a clear path. With continued support from the State of Colorado, we expect to reach full funding by 2048, a goal that reflects both our responsibility to our members and our long-term planning discipline.

Pensions and retirement security

The value of a defined benefit plan—also known as a pension—is in the name: it defines what your benefit will be. A PERA member can calculate their retirement income from the day they’re hired because they know the factors that determine it—age, salary, and length of service. There’s no guesswork about how much to save, how to invest it, or when to withdraw. And most importantly, that income is guaranteed for life, no matter what happens in the stock market.

Retirement security is also economic security: When retirees spend their income—on groceries, housing, health care, and other goods and services—they’re supporting Colorado businesses and jobs.

In 2023, PERA paid $4.56 billion to more than 114,000 retirees living in Colorado. According to an analysis by Boulder-based Pacey Nehls Economic Consulting, those benefit payments resulted in $7.1 billion in total economic output and supported 28,525 jobs. Retirees also paid nearly $382 million in local and state taxes on those benefits, helping support public services that make Colorado a great place to live.

How can I promote retirement security?

PERA’s Ambassador Program engages members in the retirement security conversation by sharing the value of PERA to all of Colorado. You can sign up for the Ambassador mailing list to stay in the loop and be notified of any potential legislative changes that might affect PERA, as well as lend your voice to the conversation.

We love to hear from PERA members and retirees who have dedicated their careers to serving Colorado. Browse member stories and fill out our form to share your own PERA story with us.

In addition, independent member and retiree groups like Secure PERA advocate for strengthening and protecting retirement security for Colorado’s public employees. The National Public Pension Coalition does the same on a national scale.

Providing retirement security is what we at PERA have been doing for 94 years, and we plan to continue that work for many more generations to come. Colorado’s public employees deserve it.

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How Private Equity Helps Us Secure Public Employee Retirement

Posted on October 1, 2025October 7, 2025 by Kurt Sevits

At Colorado PERA, we invest for one purpose: To provide a secure and reliable retirement for the people who spend their careers serving our state. We do that by managing a diversified investment portfolio that includes everything from traditional stocks and bonds to investments in real estate and private equity.

Private equity is often less well-understood by individual investors than other types of investments and is an important component of institutional portfolios. Here’s why we invest in this asset class and how it contributes to our members’ hard-earned retirements.

What is private equity?

Simply put, private equity generally refers to investments made in companies that aren’t traded on the public stock exchanges. Those investments can include:

Venture capital: Providing money to young businesses like startups.
Growth capital: Investing in more mature businesses looking to grow or expand.
Buyouts: Purchasing a company or a portion of a company with the goal of growing its value.

We invest in private equity through carefully selected limited partnerships and funds that are managed by experienced professionals. Those funds cover a variety of business areas with high potential for growth, such as technology, energy, and health care.

Why PERA invests in private equity

The PERA Board of Trustees, which oversees PERA’s investments, believes a well-diversified portfolio is key to making sure we can deliver on our promises to members. Our investments in private equity are an important part of that strategy, despite being a relatively small portion of the portfolio. As of June, private equity amounted to 7.5% of the total PERA portfolio with a long-term target of 10%.

We first started investing in private equity in the early 1980s, and those investments have paid off in the years since. In the past decade, for example, private equity has earned an annualized return of 11.5% compared to the total fund’s 8.6% return.

That strong performance helps strengthen the trust funds and ensures we can continue paying benefits well into the future.

Private equity and transparency

Because private companies aren’t publicly listed, financial details on those companies aren’t always available to the public. State law also limits what we can disclose.

Still, we are committed to being as open as possible. You can view a list of our private equity investments on our website, including how much money we’ve committed and each fund’s internal rate of return. We also were an early supporter of the Institutional Limited Partner Association (ILPA), which aims to improve reporting and transparency within the private equity field.

Our team of investment professionals reports regularly to the Board of Trustees, which has a fiduciary duty to act in the best interests of members and retirees. That includes making sure our private equity investments meet our standards for risk-adjusted returns.

Want to learn more?

We produce our Investment Stewardship Report every year to provide more insight into how we manage investments on behalf of our more than 700,000 members and retirees. You can explore a digital interactive summary at copera.org/stewardship-snapshot.

Private equity may be a small portion of our investment portfolio but it’s an important part of the long-term strategy that helps secure our members’ retirements. By investing wisely in both public and private markets, we’re making sure the trust funds remain strong not just for today’s members and retirees, but for generations to come.

Learn more by watching our video, “Investing in Your Future: How PERA Grows Member Benefits.”

Do Employees Change Jobs More Than They Used To?

Posted on September 17, 2025September 17, 2025 by Kurt Sevits

New research on career trends casts doubt on the common belief that younger workers today are hopping from job to job at higher rates than previous generations.

The research from the National Institute on Retirement Security (NIRS) found that while there have been shifts in the labor market in recent decades, job tenure patterns have largely remained the same from one generation to the next.

What the data says

In discussions about employment trends, it’s not uncommon to hear some variation of “young people aren’t sticking around anymore,” and data does show younger workers tend to switch jobs more than others. In their paper, “Debunking the Job-Hopping Myth: A Data-Driven Look at Tenure and Turnover Among Younger Workers,” researchers from NIRS argue that not only has that long been the case, but things aren’t much different now than they used to be.

In analyzing data from the U.S. Bureau of Labor Statistics, NIRS found that employees between the ages of 25 and 34 tended to stay with a given job for about three years in 1983. Fast forward to 2024 and that same age group had a median job tenure of 2.7 years—a difference of only a few months.

The same is true for slightly older workers: the NIRS analysis found job tenure in the 35-44 age group has also remained consistent since the 1980s.

However, NIRS found a surprising trend in the data—it turns out workers approaching retirement age aren’t staying in their jobs as long as they used to. Both the 45-54 and 55-64 age groups showed noticeable declines in career tenure since the 1980s.

Image credit: National Institute on Retirement Security

The researchers argue the change in older groups could be for a number of reasons, including a decline in access to defined benefit (DB) pension plans in the private sector. Because pension benefits are based on a worker’s length of service, they provide a strong financial incentive to stay put compared to other types of retirement benefits.

Employee retention in the public sector

According to NIRS, 86 percent of public employees today have access to a DB plan at work compared to just 15 percent of private sector workers, and rates of quitting are much higher in the private sector. Retirement benefits are a big reason.

In Colorado, as part of a recent study comparing the PERA DB Plan to other types of plans, researchers surveyed State of Colorado employees and a large majority said their retirement plan played an important role in their career decisions. Of those surveyed, 81% said retirement benefits were a factor in their decision to work for the State and 83% cited retirement benefits as a factor in their decision to remain in State employment.

The research from NIRS makes it clear that the need for stable, secure retirement benefits is as strong today as it was decades ago. While some employment trends change over time, workers settling into their careers and planning for the future still value strong benefits that provide peace of mind.

Study Confirms PERA a Valuable Tool for Recruiting, Retaining Public Workers

Posted on August 19, 2025August 19, 2025 by Kurt Sevits

A new independent study found Colorado PERA continues to be a valuable tool for recruiting and retaining public employees by providing cost-effective retirement benefits.

As part of its regular review and oversight of PERA, the General Assembly approved the study with House Bill 1427 and directed the Office of the State Auditor to enlist an actuarial firm experienced with public pension plans to conduct the analysis. The State last performed a study like this one a decade ago.

Methodology

The study, conducted by Cheiron, compared PERA’s Hybrid Defined Benefit (DB) Plan to various theoretical alternative plan designs, compared the DB Plan to the PERA Defined Contribution (DC) Plan, and included results from a survey of current and former state employees on the importance of retirement benefits in their employment decisions.

The nine alternative plans included in the analysis incorporated a variety of benefit accrual and payment methods, from a combination of Social Security and a defined contribution plan like many employers in the private sector offer, to a cash balance plan in which a worker’s account balance is converted to an annuity at retirement.

The study primarily looked at the costs associated with each plan and potential income replacement ratios—or the percentage of pre-retirement pay a person can expect to receive in retirement—for both short- and long-term public employees.

PERA vs. other plans

While no single plan design offers the best possible benefits for every individual, the study found the PERA DB Plan provides higher income replacement than the alternatives for employees who spend the majority of their careers in public service.

Some of the alternative plan designs and the PERA DC Plan can provide higher income replacement for non-career employees, according to the study, because of the “front-loaded” nature of accruing savings in a defined contribution plan. Contributions an employee makes early in their career have a lot of time to grow, which is more beneficial for workers who switch jobs throughout their careers. By contrast, a defined benefit pension is “back-loaded” since a worker’s benefit is based on their highest earnings, which are usually toward the end of their career. This can encourage late-career workers to remain in their jobs, which benefits employers by retaining experienced employees and reducing costly turnover.

A line chart showing the different accrual patterns between defined benefit and defined contribution plans. The DB plan line slopes upward as years increase, while the DC plan line slopes downward. — The “back-loaded” accrual of benefits in a traditional defined benefit plan compared to the “front-loaded” nature of defined contribution plans. In a DC plan, a worker’s early-career contributions have more time to grow, while in a DB plan the worker’s contributions later in their career have a larger effect on the benefit. Source: Cheiron.

The study noted plans that tend to be more beneficial for non-career employees also come with trade-offs, such as higher costs and more risk placed on the employee. For example, plans that require the worker to manage their own retirement savings and investments also require that worker to manage the risks associated with overspending in retirement or outliving their savings.

It’s also important to note that in the PERA DB Plan, income replacement ratios are predictable—a member can use their highest average salary (HAS) table to estimate their benefit well before they retire. In a DC plan, on the other hand, retirement income depends significantly on investment returns, which are much less predictable.

The PERA DB Plan’s “hybrid” nature also carries features that make it attractive to members regardless of career tenure. Those include portability—members can take their contributions with them when they leave PERA employment—as well as compounding interest, an employer match, and a money purchase benefit calculation that can provide a higher benefit for some non-career employees.

Because every employee has different financial goals, PERA offers a choice between DB and DC plans for some public employees, and the PERA DB Plan remains a valuable and desirable benefit for career employees.

State employee survey results

An important part of any analysis of retirement benefits is the perspective of the workers receiving those benefits. For this study, Cheiron surveyed thousands of State employees who had the option to choose between the PERA DB Plan and the PERA DC Plan.

Of those surveyed, 81% said retirement benefits were a factor in their decision to work for the State of Colorado and 83% cited retirement benefits as a factor in their decision to remain in State employment.

When it came to choosing which plan to enroll in, the PERA DB Plan was the clear choice with 77% of those who gave it a great deal of thought choosing DB over DC, according to the survey.

Conclusions

While career patterns shift over time, the report makes it clear that providing a secure lifetime retirement benefit continues to draw people to careers in public service. This study confirms that as Colorado’s public workforce evolves, PERA is well-positioned to meet the changing needs of its diverse membership and provide retirement security for generations to come.

For more information, read the full report.

Measuring the Impact of $4.5B+ in Annual Retirement Benefits in Colorado

Posted on July 10, 2024June 11, 2025 by Kurt Sevits

Every month retired public employees across the state receive their benefit payments from Colorado PERA. Retirees then spend their income in their communities, supporting local economies and jobs and providing an important stabilizing economic force.

In 2023, PERA paid $4.56 billion in benefits to 114,432 retirees living in Colorado, resulting in $7.1 billion in total economic output and supporting 28,525 jobs in the state, according to a newly released report from Boulder-based Pacey Nehls Economic Consulting. The Economic and Fiscal Impacts report also found PERA retirees paid nearly $382 million in state and local taxes on those benefits, supporting schools, roads, and other vital services.

The multiplier effect

When retirees spend their pension income, it sets off a multiplier effect as businesses then spend money to stock more inventory and hire staff, employees of those businesses spend their own income, and governments collect taxes on all that spending. The result is every dollar in PERA benefits grows as it cascades through the economy.

This cycle of spending illustrates the economic measure of “value-added,” which counts only the additional production of goods and services resulting from PERA distributions rather than total output.

Pacey Nehls estimates a PERA retiree’s economic output multiplier at 1.56, meaning an extra 56 cents are generated in the economy for every dollar a retiree spends. In total, PERA retiree spending resulted in $3.39 billion in added economic value statewide last year.

The stabilizing effect

Regional per capita annual PERA retirement distributions in 2009 and 2023

The consistent flow of billions of dollars in PERA retirement benefits into communities across the state every year helps add stability to the state and local economies. This stabilizing effect is especially strong in some of Colorado’s rural areas, where public employees make up a larger portion of county payroll and their retirement benefits are higher per capita.

For example, the Denver metro area has the most overall PERA distributions in Colorado at more than $2.3 billion last year, which equates to $708 per person. Meanwhile, the Pueblo-Southern Mountain region’s $382 million in PERA benefits comes out to $1,555 per person.

The stabilizing effect of PERA benefits was especially helpful during the COVID-19 pandemic. When businesses, schools, governments, and other entities shut down or greatly reduced staff due to the health emergency, PERA continued to pay benefits to retirees across the state, providing consistent, reliable money to local economies when other economic activity was lower than usual.

For more information, including detailed breakdowns by region and county, download the Economic and Fiscal Impacts report here.