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.
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.
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.
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.
Postponed indefinitelyA motion that halts all further consideration of a bill. In practice, this means the bill has failed.Defined contributionA voluntary plan in which participants can save pre-tax income for retirement. Contributions are “defined” by the employee, but the future benefit is not guaranteed.