Category: Legislation & Governance

New Report Compares Inflation to Annual Increase

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Key points from this story:

  • PERA prepares a SB 10-001 report every five years
  • The report must show two things: how the annual increase compares to inflation and what progress has been made toward eliminating the unfunded liability
  • The 2020 report shows that inflation has risen an average of 1.5% per year since 2010 while the annual increase has risen an average of 1.4%

Although the annual increase retirees receive has decreased in recent years, it is generally keeping pace with inflation over the long term — one of the key findings in a report PERA delivered to the General Assembly this month.

Background of the Report

In 2010, the General Assembly passed Senate Bill 10-001, which made structural changes to PERA. In addition to these changes, the bill required PERA to prepare and submit a report to lawmakers every five years.

The report is required to show two things: the progress made toward eliminating unfunded liabilities and an analysis of how the annual increase retirees receive compares to inflation.

PERA prepared the first such report for the General Assembly in 2015. On January 1, 2021, PERA submitted a report that updates the original report with data from 2015-2020.

The Annual Increase and Inflation

The annual increase in 2020 was 1.25%. In 2021, the annual increase will also be 1.25%. This amount has changed many times throughout PERA’s history. The formula used to determine the annual increase amount changed most recently with the passage of SB 10-001 and again with SB 18-200.

The annual increase helps retirees keep pace with inflation throughout retirement. That does not mean that the annual increase will equal inflation in any given year, however. In 2017, for example, the annual increase was higher than inflation (2.0% vs 1.0%) while, in 2019, inflation was higher (2.5% vs 0.0%).

As part of this report, PERA is required to compare how the annual increase, over time, compares to inflation. The 2020 report showed that inflation rose an average of 1.5% per year since 2010 while the PERA annual increase rose 1.4% per year since 2010. Between 2010 and 2019, inflation rose a total of 16.2% while the annual increase rose 14.9%.

Measuring Inflation

It’s also important to note that inflation is measured using a specific measure, called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

The CPI-W accurately captures broad changes to the cost of food, energy, housing, and more. This is useful as PERA has retirees that live throughout the United States.

However individuals don’t experience inflation at a national level — you experience the inflation of the area in which you live. For example, in any given year a person living in Grand Junction might experience inflation at a rate higher than the national average while someone living in Alamosa might experience a lower rate of inflation. Or vice versa. Additionally, the cost of health care has been rising faster than inflation for years.

Managing these changes can be difficult. However, a secure lifetime benefit with an annual increase that compounds annually remains a valuable tool to have in retirement over the long term.

Progress Toward Eliminating PERA’s Unfunded Liability

The report also included an update on PERA’s progress toward the goal of eliminating all unfunded liabilities (this information is also provided publicly every year in PERA’s Comprehensive Annual Financial Reports).

The report states that the changes in SB 10-001 led to an immediate reduction in $8.9 billion of liabilities and the SB 18-200 changes reduced liabilities by another $3.9 billion.

PERA’s liabilities aren’t a static figure, however, and are updated every year. For example, strong investment returns in 2019 led to PERA making faster-than-expected progress.

Demographic changes are another factor that can affect PERA’s liabilities. PERA undergoes an experience study every four years to ensure that the projections it uses for inflation, retiree lifespans, the ages at which members retire, and more are as accurate as possible.

The most recent experience study showed that, among other things, the trend of retirees living longer than originally projected continues. This trend adds liabilities to PERA, as longer lifespans mean a larger lifetime benefit will be owed to retirees on average.

A likely result of these adjustments is that the automatic adjustment provision (AAP) will go into effect after the release of the next CAFR, in June 2021 (the final determination regarding the AAP is part of the CAFR process and is released with the release of the CAFR). If this happens, the changes would go into effect in July 2022.

While changes like these can be difficult, they have resulted in a more secure and resilient plan members can rely on in the future.

Meet the New Chair of PERA’s Board

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In November, PERA’s Board elected a new chair and vice chair. This is the first of a two-part series introducing these new leaders.

This month, Marcus Pennell begins a two-year term as the chair of PERA’s Board of Trustees. Pennell is new to the role but certainly not new to the Board. He brings with him nearly 15 years of experience on the Board, where he most recently served as vice chair.

Pennell recently spoke to PERA On The Issues about his background and his perspective on the work the Board does. The conversation is summarized below.

Thanks for joining us, Marcus. Before we get to PERA, tell us a bit about yourself.

I grew up in Washington. My mom’s a nurse and my dad’s a welder and mechanic. I’ve been teaching in Colorado since 2001 and currently am a physics teacher at Ralston Valley in Arvada. My wife is a principal. I have two kiddos: a 14-year-old who is freshman in high school and a 22-year-old who is in law school.

What made you interested in running for the Board in the first place?

I believe that public service is a good thing for every person to do. What you do depends on your skillset.

Some people volunteer at their church. Some at a soup kitchen. There are lots of places where you can volunteer and lots of things you can do. Find something you can do that will benefit others. Not as a stepping stone to something else—something where you’re truly doing it for others.

This is my skillset. I understand how pensions work. I understand how systems work. I understand how to get people from point A to point B in their thinking.

What should others know about your approach to leadership as you assume the responsibilities of chair?

I think as a leader I am much more interested in process, not an agenda. How we go about doing our business is often as important as the business itself. I want to hold fast to the tenets of: having good information; having a clear picture of where PERA stands in relation to its goals; of knowing what our business practices are, what our CAFR looks like, the results of our audits, etc. It’s our job to make well-reasoned decisions and then constantly evaluate as we go.

We live in a probabilistic world. If we knew what was going to happen in the future, we could just put PERA on cruise control. Part of the reason the Board exists is to provide good decision-making in a changing world.

How do you explain the role of PERA’s Board to other PERA members?

When I’m asked that question, I ask how long that person can talk with me. If they have 10 or 20 minutes, it usually ends up being a better conversation. PERA is sophisticated. It’s hard to communicate in soundbites.

Ultimately, the Board is a group of people willing to lend their expertise to make the high-level decisions to give the organization direction. We don’t do the investing. We don’t advise the legislature on particular wording deep in some bill. We do set high-level expectations for management. We oversee how PERA is run at a high level, make sure it is transparent. We are making sure PERA is a well-run organization.

How do you describe the value that PERA delivers?

PERA exists because it’s more efficient to provide retirement benefits when you invest as one big fund. Over time, you can make more money this way compared to hundreds of thousands of individuals on their own. The efficiencies you find with our economies of scale are one of the biggest driver of saving money.

All of that is good for members. PERA provides for member retirements in a way that is economically feasible and sustainable. And PERA is doing a great service not just for members, but also for the state of Colorado. If you can fund all these member retirements in a way that’s cost effective, then the cost to the state and to the different PERA employers ends up being less than it otherwise would be. That’s a good deal for everybody.

What’s one thing about PERA that can be difficult to understand?

PERA’s Board isn’t the only body with a role. The state legislature also plays a big role, for example. In fact, they lay out the specifics of the Board’s role in statute. If you don’t take the time to figure out which role belongs to which body, it can be easy to point a finger at the wrong body.

There’s a lot of thoughtful, informed, caring people on the Board, within PERA staff, and in the state legislature. Those people aren’t always in agreement about what the best way to do things is, but people agree that the goal is to provide the best benefit at the lowest cost.

If you are interested in learning more, you can learn about the levers at our disposal. But there is no SparkNotes version of PERA.

What’s one thing about PERA that you’d like more people to be aware of?

That there is a culture of service to members that goes above and beyond merely complying with laws and regulations. The letter of the law and rules are important, and we also strive to transcend that – to be an organization that is honorable, one that carries itself in a manner befitting the important and good work we do for people.

An Update on 2023 WEP/GPO Legislation

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Editor’s note: This article has been updated to include details on new bills that have been introduced since it was originally published.

As the 118th session of Congress continues, lawmakers in both chambers have introduced bills to address two provisions of federal law that can reduce Social Security payments to retirees who receive a pension like Colorado PERA.

The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) both affect Social Security benefits, but in slightly different ways. The WEP can reduce Social Security benefit payments to retirees who receive a pension based on work during which they did not contribute to Social Security (though it does not apply to workers with 30 or more years of substantial SS earnings). The GPO reduces Social Security dependent benefit payments to spouses, widows, and widowers who receive a government pension.

It’s important to note that a person’s PERA benefit is never reduced due to Social Security or other benefits. Read more about PERA and Social Security.

Did you know?
The PERA Defined Benefit Plan predates and serves as a replacement for Social Security in Colorado, so PERA members do not pay Social Security taxes like most private-sector workers. Because Social Security pays a larger benefit to lower-income workers, the years during which a worker didn’t contribute to Social Security can lead to the worker earning a higher benefit than they would otherwise be entitled to. The WEP and GPO were enacted to counteract that effect.

In January, members of the House of Representatives reintroduced H.R. 82, the Social Security Fairness Act, which would fully repeal both the WEP and GPO. The bill gained wide bipartisan support in 2022 but never made it to a floor vote.

The reintroduced bill has since gained the support of more than 250 members of the House of Representatives, including five from Colorado: Reps. Diana DeGette (D-CO-1), Joe Neguse (D-CO-2), Jason Crow (D-CO-6), Brittany Pettersen (D-CO-7), and Yadira Caraveo (D-CO-8).

Since we last covered this issue, lawmakers in Congress have introduced additional bills that aim to either repeal or modify WEP and/or GPO.

Sen. Sherrod Brown (D-OH) introduced S. 597, the Senate’s version of the Social Security Fairness Act, in March. Like the House version of the bill, S. 597 aims to fully repeal both the WEP and GPO. Sens. John Hickenlooper (D) and Michael Bennet (D) have both signed on as cosponsors.

In addition to the repeal bills, other bills propose changing the WEP formula to lessen its impact on public workers.

In June, Rep. Richard Neal (D-MA-1) introduced H.R. 4260, the Public Servants Protection and Fairness Act. Under that bill, retirees would receive a Social Security benefit based on whichever formula provides the higher amount—the current WEP formula or the new proportional formula.

In September, Rep. Jodey Arrington (R-TX-19) introduced H.R. 5342, the Equal Treatment of Public Servants Act. Like Rep. Neal’s bill, H.R. 5342 proposes an updated WEP formula to calculate retirees’ Social Security benefits, but only the new formula would apply to those who become eligible for benefits in 2068 or later.

As in previous years, these bills face a tough road ahead. Lawmakers have introduced bills to modify or repeal the WEP and GPO every session in recent years, but the efforts never make it very far in the legislative process despite gaining many cosponsors from both parties. Lawmakers usually cite the cost associated with the bills — with Social Security facing insolvency in about a decade, many consider it a tough sell at the moment, but expect it will stand a greater chance of success if included as part of broader reforms to the program which Congress may need to consider in the next few years.

PERA On The Issues will continue to track these bills and other Social Security-related legislation and provide updates when available.

Remember to subscribe to our biweekly newsletter to stay in the know.

Checking in on Legislative Activity So Far This Year

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Winter is nearly over (according to the calendar, at least), and state lawmakers in Denver are more than halfway through the 120-day Colorado General Assembly. In Washington, DC, senators and representatives from across the country are well into their own legislative work in Congress.

Some of that important legislative work pertains to public employees and their retirement benefits. Here we discuss key actions lawmakers have taken so far in 2023, as well as what may still be ahead.

Colorado legislation

So far this session, state lawmakers have introduced more than 400 bills, seven of which apply directly to Colorado PERA.

Four of those bills have been postponed indefinitely. That means the bill is no longer under consideration and these will not make it to the House or Senate floor for a vote. This can happen if lawmakers decide a bill needs more work or doesn’t have the support to pass.

Several other bills remain under consideration and are working their way through the process in the state legislature. Included in those bills is SB23-056, which aims to fully recompense PERA for the state’s missed 2020 payment of $225 million to PERA. Legislators passed a bill last year that aimed to make up that payment, and Gov. Jared Polis signed it into law. This new bill aims to pay PERA the remaining shortfall of $35.05 million.

Other bills currently under consideration include SB23-016, which would require PERA to include in its annual Investment Stewardship Report a description of climate-related investment risks, impacts and strategies, and HB23-1176, which would create a new defined contribution plan for members of PERA’s School and Denver Public Schools divisions.

READ MORE: 2023 Proposed Legislation Status

As we saw last year, legislative work can continue all the way up to the last minute of the session, so there’s still plenty ahead. That includes the Long Bill, which lays out the State’s budget and spending for every state department and program for the next fiscal year. The Long Bill will be introduced in the Senate in late March. All legislative activity for the current session will wrap up by May 8.

Federal legislation

Lawmakers in Washington, DC have been working on bills affecting public employee retirement.

While Congress passed the package of retirement-related legislation collectively known as SECURE Act 2.0 in late December, many of its dozens of provisions don’t take effect until 2023 or 2024. Those include an increase in the age that retirees must start taking their annual required minimum distributions (RMDs) and new types of penalty-free distributions from retirement accounts.

READ MORE: What’s in SECURE 2.0?

Congress is also tackling an issue that comes up every session: Social Security’s Windfall Elimination Provision and Government Pension Offset. The two provisions of federal law can reduce Social Security benefits for members of Colorado PERA, which serves as a substitute for Social Security. While lawmakers have introduced bills addressing the WEP and GPO in every session of Congress in recent years, the bills never make it to a floor vote for full consideration, with lawmakers citing the cost as a key reason.

So far this year, lawmakers have re-introduced last year’s Social Security Fairness Act, which seeks to repeal both the WEP and GPO. Last year, we saw multiple similar bills, with some aiming to modify the WEP and GPO calculations rather than repealing them. It remains to be seen whether lawmakers will introduce other bills on the topic this year.

READ MORE: Bill to Repeal WEP/GPO Reintroduced in Congress

As always, PERA On The Issues will continue to track these topics and others that come up throughout the year. You can subscribe to our biweekly email newsletter to stay in the loop, as well as sign up for the PERA Ambassador email list to be informed about important legislative activity.

Bill to Repeal WEP/GPO Reintroduced in Congress

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Editor’s note (June 7, 2023) : Since we published this article, more legislation has been introduced in Congress. Visit PERA On the Issues for the latest.

Federal lawmakers seeking to repeal Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) are giving it another try this year.

U.S. Representatives Abigail Spanberger (D-VA) and Garrett Graves (R-LA) reintroduced the Social Security Fairness Act of 2023 (H.R. 82) in January. A similar bill received widespread bipartisan support in 2022 but never made it to a floor vote. Bills that don’t pass expire at the conclusion of each Congress.

The WEP and GPO, which are part of federal law, can reduce Social Security benefits for recipients of public pensions like Colorado PERA that serve as a substitute for Social Security. It’s important to note that a person’s PERA benefit is never reduced due to Social Security or other benefits.

While some bills in recent years have aimed to modify one or both the WEP and GPO, H.R. 82 seeks to fully repeal both provisions. As of early February, the bill had nearly 150 cosponsors, two of whom are from Colorado: Rep. Joe Neguse (D-CO-2) and Rep. Jason Crow (D-CO-6). The previous version of the bill received over 300 cosponsors, including four from Colorado.

Why hasn’t Congress taken any substantial action on WEP/GPO despite strong support? Essentially, it comes down to cost. Eliminating or changing the WEP/GPO provisions of Social Security would mean providing larger checks to benefit recipients, costing the system more money. Recent projections show the Social Security trust funds are expected to be depleted in about a decade, so it’s a tough sell.

Since major changes may be needed to shore up Social Security’s financial footing, it’s possible changes to WEP/GPO could be included in a larger reform package. But it’s not clear when or if that might happen.

What’s Colorado PERA doing about it? Since this is a federal issue to be determined by Congress, we encourage members and retirees to contact their members of Congress to share their opinion about these provisions and how they affect them. PERA will continue to work with the Colorado General Assembly to ensure PERA is on-track to meet its funding goal in order to continue to provide current and future retirees with monthly income in retirement that cannot be outlived.

PERA On The Issues will continue to track any legislative action on WEP/GPO throughout the year. Subscribe to our biweekly newsletter for updates on this bill and other news related to public employee retirement.

Colorado Legislators Pass Three PERA-Related Bills During 2023 Legislative Session

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It was a sprint to the finish line as lawmakers finished their work on hundreds of bills in the final days of the 2023 legislative session.

Colorado’s first regular session of the 74th General Assembly ended on May 8, 2023. Over the course of 120 days, legislators took up seven bills affecting Colorado PERA. Here’s a brief summary of the three that passed and are awaiting the signature of Gov. Polis to become law.

Senate Bill 23-016 includes multiple provisions that are meant to reduce greenhouse gas emissions in the state. The PERA-related provision in the bill requires a description of climate-related investment risks, impacts, and strategies to be included as part of PERA’s annual Investment Stewardship Report.

Senate Bill 23-056 requires the state to make an additional payment to PERA in the amount of the remaining balance of the PERA Payment Cash Fund, plus $10 million in General Fund, which results in a total payment of approximately $14.5 million. This payment is intended to recompense PERA for the cancellation of a previously scheduled July 1, 2020, direct distribution of $225 million, in addition to the compensatory payment provided in previous legislation.

Senate Bill 23-163 modifies the definition of “State Trooper” to include wildlife officers and parks and recreation officers hired on or after January 1, 2011, by Colorado Parks and Wildlife in the Department of Natural Resources. It applies the State Trooper contribution rate and benefits to eligible employees and their employers effective July 1, 2023. Those individuals who qualify under this definition in state statute are commonly referred to as “safety officers” for the purposes of PERA benefits in our materials.

Four other bills affecting PERA were introduced but did not pass.

PERA will continue to engage with lawmakers during the interim period between legislative sessions. That oversight process includes meeting with legislative panels on the Legislative Audit Committee, Pension Review Commission and Subcommittee, and the Joint Budget Committee. These are opportunities for PERA to provide updates on its policies, financial condition, administration of the association, and answer questions from lawmakers.

IRS to Begin Using Updated Form W-4P and New Form W-4R in 2023

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Editor’s note: Updated forms are now available online at copera.org.

The IRS is implementing some changes to tax withholding forms in 2023 that could affect retirees who receive benefit payments from plans like Colorado PERA.

Background

In 2020, the IRS began requiring employers to use a new version of Form W-4, which employees fill out to tell their employer how much to withhold from their paychecks. The updated form was a result of the Tax Cuts and Jobs Act of 2017, which made a number of significant changes to tax law, including eliminating personal exemptions. Instead of using complicated worksheets and declaring a number of withholding allowances, employees now fill out the form with the relevant information, and employers calculate the appropriate amount of tax to withhold.

The updated form is intended to ensure employers withhold a more accurate amount from workers’ paychecks. The result is fewer people who either owe money to the IRS or who receive large refunds at tax time.

Updated W-4P and new W-4R

Following the tax code changes from the Tax Cuts and Jobs Act and the updated W-4 form, the IRS is also updating Form W-4P, which is used to determine tax withholdings for pension and annuity accounts.

While the old form covered both one-time distributions and recurring payments, there are now two forms. Form W-4P is only for recurring payments such as monthly PERA benefit payments, while Form W-4R is for one-time or lump-sum distributions such as refunds or rollovers.

Like the W-4, the W-4P form no longer allows tax filers to adjust their withholdings by electing a specific number of withholding allowances. Instead, the W-4P form has new input fields for increasing or decreasing the amount to withhold, including fields for tax credits and deductions.

What the changes mean for PERA retirees

PERA retirees and benefit recipients who are currently receiving ongoing PERA benefit payments and who do not wish to make changes to their federal tax withholding elections are not required to file a new form. However, PERA recommends completing a new W-4P form for 2023 to ensure the appropriate tax amount is withheld. 

If a filer makes no changes to their federal tax withholding elections, PERA will use the IRS method to bridge their tax table elections over to the new methodology as of January 1, 2023. This bridging, in most cases, will adjust their withholding accordingly. If a person’s current election is to withhold zero federal tax, a flat dollar amount tax or flat percentage tax, those elections will remain the same, but may be incorrect withholding amounts under the new IRS guidelines, which is why PERA recommends submitting the new W-4P form for 2023.

PERA anticipates retirees and benefit recipients will be able to update their tax withholding elections online and by paper forms in mid-December 2022 for changes to take effect January 1, 2023.

Please note that PERA cannot provide tax advice, including advice about how to complete these forms. If you have questions about your particular situation, please contact a tax or legal advisor.

For more information on taxes and PERA benefits, visit copera.org.

The Importance of Stewardship in Uncertain Times

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The year so far has been marked by changes—unexpected, difficult, and sometimes disorienting changes. Colorado PERA has been around since 1931. It has been through a world war and a cold war, the dotcom crash and the digital revolution. In other words, while 2020 has been tough, it is neither the first nor the last year of seminal change.

In June, PERA released its Comprehensive Annual Financial Report. It answers, among other things, a common question about PERA: “How did PERA’s investments perform last year?” This is an important question to ask. Another question, asked a little less frequently, is this: “How is PERA positioning its investment portfolio for the future, a future that will continue to see changes?”

That question is answered in the recently released 2020 Investment Stewardship Report. Stewardship means “taking care of something.” In this case, “something” is members’ dollars. This report helps demonstrate the ways in which PERA is continuously evolving, adapting to an ever-changing environment, while keeping its fiduciary duty to members at the center of decision-making processes.

Highlights of the report include:

  • PERA created the Investment Stewardship Division. Having resources dedicated to formalizing and advancing investment stewardship initiatives demonstrates PERA’s commitment to this organizational priority.
  • By consistently focusing on the most compelling expected risk-adjusted returns, PERA’s Real Estate portfolio has generally earned strong returns from investments in green buildings and affordable housing, as well as local Colorado properties, among many other investments.
  • As an institutional investor, PERA uses its voice to advocate for transparency and disclosure in financial markets. Making information about PERA’s investment activities more accessible to our members and others who have a stake in PERA’s success is equally important. To that end, PERA is also increasing the transparency of its own investments by producing a number of short videos, hosted on copera.org.

Change seems especially acute in 2020, but the truth is that it’s an ever-present factor. Building an organization that can nimbly adapt to change and that takes the initiative to integrate a variety of considerations into investment decisions helps keep PERA relevant, innovative, and, ultimately, a source of value to our members.

You can find the complete 2020 Investment Stewardship Report as well as the Executive Summary here.

PERA On The Issues will be highlighting key sections in the coming months.

2023 Proposed Legislation Status

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The 2023 Colorado General Assembly commenced January 9 and will continue for 120 days.

Below you’ll find summaries of proposed legislation affecting Colorado PERA. The status of each bill will be updated regularly.

Last updated: June 7, 2023

SB23-056

Compensatory Direct Distribution To PERA

Summary: Requires the state to make an additional payment to PERA in an amount equal to $35,050,000 that, along with the payment required under HB22-1029, is meant to fully recompense PERA for the cancellation of a previously scheduled July 1, 2020, direct distribution of $225 million. The source of funds identified for this payment is the balance of the PERA payment cash fund, with any remaining amount coming from the state’s general fund.

Sponsors: Sen. Chris Kolker, Rep. Shannon Bird

Status: Passed; Gov. Jared Polis signed into law on June 2.

SB23-016

Greenhouse Gas Emission Reduction Measures

Summary: Would require the PERA Board to adopt a proxy voting policy that ensures any voting decisions align with the state’s greenhouse gas emission reduction goals, as well as require PERA to include in its annual Investment Stewardship Report a description of climate-related investment risks, impacts and strategies.

Sponsors: Sen. Chris Hansen, Rep. Karen McCormick, Rep. Emily Sirota

Status: The Senate Finance Committee amended the bill Feb. 21 to remove the section pertaining to PERA’s proxy voting policy. Gov. Jared Polis signed the bill into law on May 11.

HB23-1092

Limitating Use of State Money

Summary: Would require PERA staff to make investment decisions solely on financial factors and would prohibit consideration of social, political, or ideological interests. The PERA Board opposes efforts to restrict PERA’s investment options or compel PERA to invest in a way that prioritizes a policy outcome over fiduciary duties.

Sponsor: Rep. Rod Bockenfeld

Status: Postponed indefinitely

SB23-104

Denver Public Schools Division Employer Contribution Reduction

Summary: Would reduce the employer contribution rate of the Denver Public Schools Division of PERA from 10.4% to 7.15% of salary. The PERA Board opposes reductions in contributions while PERA has unfunded liabilities.

Sponsors: Sen. James Coleman, Sen. Chris Hansen, Rep. Jennifer Bacon

Status: Postponed indefinitely

HB23-1144

Public Employees’ Retirement Association Defined Benefit Plan Payments To Ex-Spouse

Summary: This bill seeks to make changes in state law regarding the division of PERA Defined Benefit Plan benefits in legal separation or dissolution of marriage or civil union actions. Parties to these actions in Colorado may enter into an agreement allocating a portion of the PERA Defined Benefit Plan benefits to the retiree’s former spouse.  The bill would terminate benefits to the former spouse of a PERA retiree if the former spouse remarries.

Sponsor: Rep. Regina English

Status: Postponed indefinitely

HB23-1176

PERA Defined Contribution Plan School Personnel

Summary: Would create a new “flexible defined contribution plan” for new members of PERA’s School and Denver Public Schools divisions. The plan would be separate from the existing PERA Defined Contribution (DC) Plan, which is available to State and Local Government division employees, and would offer members the ability to elect their contribution rates. The PERA Board opposes the bill as introduced because of the costs associated with the proposal and the inability for PERA to administer such a plan as written due to its failure to meet federal rules for governmental plans.

Sponsor: Rep. Don Wilson

Status: Postponed indefinitely

SB23-163

Colorado Parks and Wildlife Officers Classified As State Troopers

Summary: Would reclassify wildlife officers and parks and recreation officers employed by Colorado Parks and Wildlife as safety officers for the purpose of determining their PERA benefits.

Sponsors: Sen. Perry Will, Rep. Iman Jodeh, Rep. Mike Lynch

Status: Passed; Gov. Jared Polis signed into law on June 6.

Preparing for the 2023 Colorado Legislative Session

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On Jan. 9, state lawmakers will convene at the Capitol in Denver for the 74th Colorado General Assembly. Over the course of the 120-day legislative session, lawmakers will introduce hundreds of bills that could ultimately change state law.

This year’s General Assembly will include dozens of new legislators. PERA’s Public & Government Affairs Manager Michael Steppat will be helping those legislators get up to speed on all things PERA as the new session begins. We sat down with Steppat to discuss the upcoming session.

For those who aren’t familiar, can you explain your role at PERA and at the State Capitol?

I represent PERA at the Capitol. I monitor and report on legislative activity, build and maintain relationships with legislators and other stakeholders, and oversee lobbying efforts. I also serve as the liaison for legislative committee staff.

Tell us about some of the changes at the Capitol this year and the outreach you’ve been doing.

There are more than 30 new legislators at the statehouse this year, which is a large number even in a state like Colorado that has term limits. There have also been changes of leadership on some of the committees that provide PERA oversight. It will be important to make sure lawmakers understand how PERA works and the importance of recent legislation related to PERA.

In the days leading up to the start of the new session, I’ve been reaching out to all the newly elected legislators to introduce myself and let them know I’ll be a point of contact to help them with any questions and provide information as the session unfolds.

Why does PERA monitor and engage in the legislative process?

While the PERA Board of Trustees is responsible for administering benefits and overseeing PERA’s investments, the Colorado General Assembly is responsible for many other aspects of PERA, such as contribution rates, benefit levels, and the amount of the annual benefit increases that retirees receive.

PERA staff provide regular updates to the legislature so lawmakers can make informed decisions on issues that affect our members.

The legislative session is a busy time, but you’re active at the Capitol year-round. What kind of activities have taken place since the last legislative session?

There’s a lot of important work that happens after a session ends and before the next one begins. PERA leaders and staff routinely meet with and report to various legislative bodies that oversee PERA’s operations and financial health. Those groups include the legislature’s Joint Budget Committee and Joint Finance Committee, as well as the Pension Review Commission and the Pension Review Subcommittee.

In between sessions, there are also meetings held with various lawmakers and PERA stakeholders with an interest in PERA and the issues that can affect our members and retirees. PERA, its benefits, and legislative changes over the years can be a lot to learn, but it’s our goal to help educate stakeholders without overwhelming them.

What’s your advice for people who want to advocate for a particular bill or outcome at the legislature?

The most important thing people can do is contact their legislators about issues that are important to them. In addition, the General Assembly website has lots of great information. You can listen to committee meetings, view calendars, review the status of a bill, and sign up to testify at committee meetings.

And of course the PERA On The Issues biweekly newsletter will be up-to-date on any legislation that affects PERA. We also encourage people to sign up for the PERA Ambassadors newsletter.