Retirement insights from a Colorado PERA perspective

Legislation & Governance

2023 Proposed Legislation Status

The Colorado State Capitol in summertime, framed by a green lawn and blue sky
Photo credit: 4nadia/Getty Images

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: Feb. 1, 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: Introduced Jan. 17; Senate Finance Committee scheduled to discuss the bill on Feb. 7

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. 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.

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

Status: Introduced Jan. 10; Senate Transportation & Energy Committee forwarded amended bill to Senate Finance Committee Jan. 25

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: Introduced Jan. 19; House Finance Committee scheduled to discuss the bill on Feb. 6

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: Introduced Jan. 31; assigned to Senate Finance Committee

Comments

  1. John Lucas says:

    Is it too late to enroll in the Cigna Dental Plan? My dentist thinks that I still can, but I doubt it.

    • PERA On The Issues says:

      Hi John, you can enroll in a PERACare plan or make changes outside of the open enrollment period only if you experience an eligible life event, such as a loss of coverage. You’ll find more information in the pamphlets we have available online here: https://www.copera.org/health-benefits-peracare. You can also call our Customer Service team at 1-800-759-7372 and we’d be happy to take a look at your account and answer any questions.

    • GM SANTO says:

      HB23-1016 … Inflation Relief For PERA Retirees??? (Not Dental Plan Comment)

      HB23-1016 proposes a refundable tax credit to some PERA retirees for inflation relief. It’s limited to $700 a year, for two years, and leaves a lot to be desired, but it’s better than nothing. “Better than nothing HB23-1016,” purports to address the miserly PERA benefit increases imposed by 2018’s SB-200, which eliminated increases for a couple of years and scrapped the previous COLA (that was capped at 2%). Presently, the annual increase is 1%; but even that is conditional on long term fund solvency, not inflation, so there is no COLA; and the current non-COLA can go to zero again. Many government workers retired relying on COLA-like increases, that were tacitly implied with PERA’s traditional Defined Benefit (DB) plans and were customary to offset lower public sector salaries. It’s disturbing that PERA benefits for retirees who aren’t (or historically weren’t) considered low-income, have eroded so much in a dozen years since annual increases were eliminated (for three years), capped at 2% (for six years), and averaged out to 1.17% (over the last three years)! Unfortunately, PERA retirees eligible for any of the $700; might not be the neediest, as means-testing is different from tax policy; and tax policy would neither target relief to those who have lost the most in reduced increases nor help households with the lowest of incomes, or the most needy.

      Furthermore, not all PERA retirees will benefit from HB23-1016, as it only applies to full time Colorado residents, 65* years of age, or older, who file Colorado tax returns (for a decreasing credit as taxable income increases). It seems possible the tax credit could be claimed by DEFINED CONTRIBUTION (DC) plans participants, who take a 401(k) distribution? Although I’m sure many DC plan participants are affected by inflation, that’s an inherent disadvantage of a DC plan, but PERA’s DB plan retirees are the ones who lost increases under SB18-200 (SB10-001 too), so only DB plan participants should be eligible for the tax credit! Additionally, some retirees with other tax deductions or credits or who combine a spouse’s income in the same household (but files separately) could be well off financially and still obtain the tax credit.

      To date there’s no estimate of what HB23-1016 may cost in lost tax revenues, but budgetary limits imposed on lawmakers by TABOR (and circumventing TABOR by raiding state pension funds) is largely what prevents retirees from having a meaningful COLA. Foregoing tax revenue because it would be subject to TABOR, is one way to provide inflation relief to some through tax credits instead of as a budgetary outlay; but tax policy is a blunt and indiscriminate instrument; and in this case seems to be used to avoid TABOR while still pandering to a large group of voters. Instead of foregoing tax revenues because they’d fall under TABOR, it would be more honest if lawmakers approved a meaningful COLA, or even a mediocre one, for all PERA DB plan retirees. Providing a COLA, might involve a tax increase, but one which TABOR allows without a vote of the electorate in the case of state pension obligations. Since laws creating tax cuts and credits also don’t require a vote of the electorate, this will be another way to circumvent TABOR, like calling taxes a fee or toll, along with raiding trust funds and cutting other budgeted items (services). At some point the financial smoke and mirrors will no longer fool people, but until then, the majority of PERA’s DB plan retirees will continue to suffer with or without a tax credit.

      In closing, in the long run HB23-1016 is bad tax policy that will not help most PERA retirees, or those who need assistance, regardless of inflation; but some legislators have at least recognized the impact inflation is having on the retirees who have suffered due to earlier legislation eliminating PERA DB plan’s traditional COLAs; and perhaps this will serve as starting point to summon up the political courage and leadership that is really needed to address the broken promises made to PERA DB plan members.
      ____________________________________________
      Footnote* – As amended 30JAN2023 in the House Finance Committee Hearing, the age limit was increased to 65 from 55, except for retired state troopers.

  2. Brenda Petrie says:

    If PERA was really working on the “issues” for its members, then it would be asking its members how “satisfied” they are with the current insurance plans available. I am stuck with Kaiser and now my billing is a total mess! With this being a State of Colorado contract, you would think PERA would be more mindful of its members and the insurance companies lack of transparency.

  3. Mila R Jensen says:

    Social Security, SSI, military retirements, etc. are all getting 8.3 % raises, why is Pera only giving a 1%?

    • John Clark says:

      PERA does not have the necessary funding to give a raise. They are a Colorado only .

    • PERA On The Issues says:

      Hi Mila, the amount of PERA’s annual increase (AI) is set in statute and adjusts up or down based on PERA’s funding progress, along with member and employer contributions. These provisions are part of Senate Bill 200, passed in 2018, which ensures that PERA reaches full funding by the end of 2047. You can learn more about how the AI works here: https://www.copera.org/annual-benefit-increases

      • Paul says:

        Once again PERA issues a reply hiding behind the fact the Annual Increase is set in statute. As usual they left out the part about PERA supporting every piece of legislation that reduced the Annual Increases to where they are now, including Senate Bill 200 that they shepherded through the legislature in 2018. How about getting behind your members’ requests to promote legislation that would establish a true COLA funded by the State of Colorado and not the retirees with the same conviction and effort that you put into gutting the AI?

      • Jacqueline Hatmaker says:

        Where was this same logic when the statute in place was that retirees would get an automatic 3.0% annually? PERA administrators certainly supported changing that when it appeared inflation was at record low levels. They quoted long term unfunded liabilities as the reason. The result, retirees have paid dearly in both rising and falling inflation scenarios. Fixing the unfunded liabilities problem has fallen squarely on the backs of CURRENT retirees to secure PERA solvency and retirement benefits of those retiring 20-30 years from now! PERA administrators and state legislators argued strongly on behalf of changing the statute 15 years ago and it still hasn’t fixed the issue! Now when our nation is facing over 15% inflation over the past two years and our PERA increases have amounted to less than 4% is a very real inequality.

        Add that to the relative SILENCE of PERA to the ANNUALLY proposed federal bills that address the unfairness of WEP and GPO provisions that also affect SS benefits for PERA retirees and it’s like pouring salt on the wounds of former employees. My husband and I are both PERA beneficiaries. His SS benefit has been reduced by over a third because of the false PROJECTIONS in place at the time of his retirement as they were based upon a
        GUARANTEED 3% annual increase. I withdrew my PERA funds at retirement yet my SSBenefits have been reduced by HALF BECAUSE OF THE SAME PERA projection. Unfunded long term liabilities didn’t happen overnight, but reached a low point after the recession hit in 2008. The fault for this is multi-faceted. Heavy and, what proved to be speculative and risky, real estate ventures, poor oversight, unbalanced investment policies in an overheated economy. The possibilities should have been forecasted. Our household income is reduced 700-1000/mo due to PERA’s change in STATUTORY policy and ALSO because of its its inactivity in fighting for Federal change to the unfair WEPand Govt Employees Offset Provision. PERA, as one of the largest defined benefit programs in the country, and affecting hundreds of thousands of households throughout the US, has a voice that should be heard to represent its retirees from this Federal injustice. Instead, all we hear is the PERA argument that ‘this is a Federal problem’ and PERA is a State program so we should write our representatives. PERA’s support in future fixes to WEP and/or GPO at the Federal level would go a long way. Their inactivity in the past is complicit, in my opinion, to the problem all PERA retirees face, now and in the future, with reduced benefits-both state and federal.

        • George Kahler says:

          Everything said in this thread I agree with. They illegally changed the statute in 2010 with a 222 shared sacrifice scheme. The apelet court disagreed and the political supreme court overrode the apelet and the theft was legalized and has been ongoing since. The state needs to be held accountable for the abuse and theft of the elderly. Hit granny in the head then steal just a little of her cash. The current amount now for the average pension from 2010 is $1,200 a month less. All the historical information about the original 2010 theft has been scrubbed from the net (saveperacola.com) is now an off shore gaming sight. Cover up it seems this is what they do best.

    • Dave Berry says:

      PERA needs to stop STATE universities from finding ways out of PERA. Fewer employees in the system makes it harder to fully fund the pension system.

    • John says:

      We need a true COLA funded by the state of Colorado. Otherwise, we are at the mercy of the stock market and investment returns. We are a ship without a sail.

  4. Paul says:

    Dear PERA and Members,

    This is good but also be aware of HB-23-1016. Please support and report status on HB23-1016 Sponsored by Reps. Bird & Sirota, Sens. Hansen & Kolker. It will provide a direct benefit (temporarily) to PERA retirees in the form of a state income tax credit. Representative Sirota wrote the following to announce the purpose of the Bill.

    “This bill came from the Pension Review Commission, which meets during the interim to consider issues facing our public pensions in Colorado. HB23-1016 creates an income tax credit that is available for a qualifying public service retiree. Inflation rates have created tremendous pressure on our retirees’ ability to keep up with cost of living. Many of our public services retirees are on a fixed income and the cost of living adjustments for many state and local government plans are not keeping up with the increasing cost of living. This proposal is an attempt to address the gap this year. ”

    From my perspective, all retirees should be contacting their Representatives and Senators to support HB23-1016 and to use that opportunity to request they also address the long term problem resulting from the fact we do not have a COLA provision to offset the impact of increases in the cost of living.

    When I recently expressed my support for HB23-1016to my representatives, and the sponsors of this Bill, I took the opportunity to request that they address the long term problem they are recognizing with this BILL and write a COLA Bill for PERA that would use a formula similar to the one Social Security uses.

    The recent COLA’s for Social Security reflect the true increases in the cost of living and here they are if you want to use them when writing to your Representatives.
    SOCIAL SECURITY COST OF LIVING ADJUSTMENTS:
    2018 2.8
    2019 1.6
    2020 1.3
    2021 5.9
    2022 8.7

    As most of you know, the legislature never established a true cost of living formula for PERA to use to offset the impact of rising costs on pensioners. Colorado only provided us with the Annual Increase (AI) provision and that just doesn’t work as a tool for offsetting the cost of living. That has never been more true since they reduced the cap and tied it to a formula regarding the % of estimated PERA fund levels 30 years out. Of course, that is important stuff to be concerned with but it should be a separate discussion from whether Colorado should provide cost of living adjustments to PERA pensioners.

    If we can’t get a COLA BILL now after the inflation we have seen over the last 3 years in contrast with our 1% Annual Increase, then it will be clear the legislators just don’t understand the numbers or they don’t care. With that said, if we don’t lay out the facts for them en masse, they will continue to fail to appreciate the scope of the problem.

    • Bee says:

      Regarding the compensation for inflation, I would not be in favor of just an income tax credit. I moved out of state as it was just too expensive and crowded there.

    • Douglas Morton says:

      Hear Hear!

    • Pat Fletcher says:

      Does no one else remember that, when PERA reached a financial crisis due to their failed investments in Enron, they promised that they would keep in line with what Social Security COLA would be providing for retirees? So they tightened their belts which forced us to tighten our belts and it doesn’t look like it will stop. In no way have they lived up to their promise. Furthermore, they are shooting themselves in the foot…a poor pension program doesn’t help much toward teacher recruitment. Instead of crippling our COLA increases, the legislator needs to step in and make it right.

    • Rob deGrey says:

      I encourage everyone to read Paul’s comment above, about a bill to offer relief from inflation for PERA members. The relief is very little (up to $700 for two years, as a tax credit), and only benefits some PERA members, but it’s better than nothing. This “Better than nothing bill, HB23-1016,” is suppose to address the miniscule PERA benefit increases imposed by 2018’s SB-200, which eliminated increases for a couple of years and scrapped the previous COLA (that was capped at 2%). Our current annual increase is a measly 1%, and is conditioned upon fund performance, not inflation, so any increase is not a COLA, and this non-COLA can go to zero again… so it’s easy to see all PERA retirees have been hurt by inflation for years! Unfortunately, not all retirees will benefit from HB23-1016 as it only applies to full time Colorado residents receiving PERA benefits that are 65* years of age or older (55 for Colorado State Patrol retirees), who file taxes, and the tax credit decreases as taxable income increases. What is not clear, but is disturbing, is the tax credit could be claimed by DEFINED CONTRIBUTION (DC) plans participants taking a 401(k) distribution. Although I’m sure many DC plan participants are affected by inflation, nevertheless that’s the inherent disadvantage with a DC plan, however it’s PERA’s DEFINED BENEFIT (DB) plan retirees who lost increases through laws like SB18-200 and SB10-001, and they should be the only ones allowed the tax credit! Additionally, some PERA retirees with other tax deductions or credits or enjoying a spouse’s income in the same household (but files separately) could be financially well off and still obtain the full tax credit. Finally, there seems to be no estimate of what the legislation may cost in lost tax revenues, and PERA members know very well that budgetary limits imposed on lawmakers by TABOR (and circumventing TABOR by raiding state pension funds) is what really prevents having a meaningful COLA for DB PERA plan retirees. Presumably, since increased tax revenue may be subject to TABOR refunds, then legislators must think it doesn’t matter which PERA members get some inflation relief, at least for the next couple of years? _____________________________________
      Footnote* – As amended 30JAN2023 in the House Finance Committee Hearing

  5. Kay Meyer says:

    The explanation from Paul is excellent. I hope we are all paying attention this year!

  6. Frances P Frain says:

    The only condition for receiving this state money needs to be that PERA will divest from fossil fuels BWEFORE they receive it! PERA has lost at least $1million because of this investment!

    • Pixel Chi says:

      Thanks, but let PERA determine the best return on investments. When windmills and solar panels are a good investment they won’t need government subsidies like Solyndra.

  7. Cecil+Stushnoff says:

    Very good information, thanks for the update.

  8. Diane Starkey says:

    Each year, I get around $30/month added to my retirement. Each year, my insurance goes up about $50/month. Eventually, I will be paying for the privilege of having retired.

  9. Mark Ramsey says:

    When will PERA support and push legislation to establish true cost of living increases for retirees? the AI is not even close to sufficient to cover the yearly increase in health insurance let alone the increase le cost of food and other basic living expenses. My back, and all other retirees, is tired of being solely responsible PERA ‘s unfunded liabilities while the people contributing are receiving 8-10% increases in salaries. If they contribute 10% of their increasing salaries to PERA, retirees should be able to receive true COLAs. It isn’t equitable and retirees, who after a lifetime of public service, are left with shouldering PERA’s unfunded issues. It’s just not right!

    • GM SANTO says:

      I very much agree with you Mr. Ramsey … I encourage you (and everyone) look at Paul’s comment above, about a bill to offer relief from inflation for PERA members. The relief is very little (up to $700 for two years, as a tax credit), and only benefits some PERA members, but it’s better than nothing. This “Better than nothing bill, HB23-1016,” is suppose to address the miniscule PERA benefit increases imposed by 2018’s SB-200, which eliminated increases for a couple of years and scrapped the previous COLA (that was capped at 2%). Our current annual increase is a measly 1%, and is conditioned upon fund performance, not inflation, so any increase is not a COLA, and this non-COLA can go to zero again… so it’s easy to see all PERA retirees have been hurt by inflation for years! Unfortunately, not all retirees will benefit from HB23-1016 as it only applies to full time Colorado residents receiving PERA benefits that are 65* years of age or older (55 for Colorado State Patrol retirees), who file taxes, and the tax credit decreases as taxable income increases. What is not clear, but is disturbing, is the tax credit could be claimed by DEFINED CONTRIBUTION (DC) plans participants taking a 401(k) distribution. Although I’m sure many DC plan participants are affected by inflation, nevertheless that’s the inherent disadvantage with a DC plan, however it’s PERA’s DEFINED BENEFIT (DB) plan retirees who lost increases through laws like SB18-200 and SB10-001, and they should be the only ones allowed the tax credit! Additionally, some PERA retirees with other tax deductions or credits or enjoying a spouse’s income in the same household (but files separately) could be financially well off and still obtain the full tax credit. Finally, there seems to be no estimate of what the legislation may cost in lost tax revenues, and PERA members know very well that budgetary limits imposed on lawmakers by TABOR (and circumventing TABOR by raiding state pension funds) is what really prevents having a meaningful COLA for DB PERA plan retirees. Presumably, since increased tax revenue may be subject to TABOR refunds, then legislators must think it doesn’t matter which PERA members get some inflation relief, at least for the next couple of years? _____________________________________
      Footnote* – As amended 30JAN2023 in the House Finance Committee Hearing

  10. Renee Sullice says:

    Legislators should also be working to eradicate the Windfall Tax – HR 82, especially for teachers. Very few teachers work in the profession for 30 years anymore and NEED social security as a supplement. Evidently, this was sitting on Pelosi’s desk for years and never moved. The Windfall Tax needs to be removed!

  11. GM SANTO says:

    I encourage everyone read Paul’s comment above, about a bill to offer relief from inflation for PERA members. The relief is very little (up to $700 for two years, as a tax credit), and only benefits some PERA members, but it’s better than nothing. This “Better than nothing bill, HB23-1016,” is suppose to address the miniscule PERA benefit increases imposed by 2018’s SB-200, which eliminated increases for a couple of years and scrapped the previous COLA (that was capped at 2%). Our current annual increase is a measly 1%, and is conditioned upon fund performance, not inflation, so any increase is not a COLA, and this non-COLA can go to zero again… so it’s easy to see all PERA retirees have been hurt by inflation for years! Unfortunately, not all retirees will benefit from HB23-1016 as it only applies to full time Colorado residents receiving PERA benefits that are 65* years of age or older (55 for Colorado State Patrol retirees), who file taxes, and the tax credit decreases as taxable income increases. What is not clear, but is disturbing, is the tax credit could be claimed by DEFINED CONTRIBUTION (DC) plans participants taking a 401(k) distribution. Although I’m sure many DC plan participants are affected by inflation, nevertheless that’s the inherent disadvantage with a DC plan, however it’s PERA’s DEFINED BENEFIT (DB) plan retirees who lost increases through laws like SB18-200 and SB10-001, and they should be the only ones allowed the tax credit! Additionally, some PERA retirees with other tax deductions or credits or enjoying a spouse’s income in the same household (but files separately) could be financially well off and still obtain the full tax credit. Finally, there seems to be no estimate of what the legislation may cost in lost tax revenues, and PERA members know very well that budgetary limits imposed on lawmakers by TABOR (and circumventing TABOR by raiding state pension funds) is what really prevents having a meaningful COLA for DB PERA plan retirees. Presumably, since increased tax revenue may be subject to TABOR refunds, then legislators must think it doesn’t matter which PERA members get some inflation relief, at least for the next couple of years? _____________________________________
    Footnote* – As amended 30JAN2023 in the House Finance Committee Hearing

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