Retirement insights from a Colorado PERA perspective

actuarial assumption

Data such as demographics, mortality rates, and investment returns that retirement plans use to calculate future assets and liabilities.

actuarial determined contribution

A calculation of the amount of money that needs to be contributed to a plan to ensure the plan can meet its funding requirements.

actuarial valuation

An annual assessment of a pension plan’s finances and membership. This forms the backbone of the plan’s annual financial report.


A highly skilled mathematician who helps pension plans, insurance companies, and other financial institutions plan for the future based on historical and anticipated data.


A broad category of investments that don’t fit into traditional categories like stocks and bonds.


The act of paying down debt or liabilities over time.

Annual Increase

An adjustment to PERA retirees’ monthly benefit payments, paid in July each year. The Annual Increase amount is set in statute and can adjust up or down based on PERA’s funding progress. It is not tied to inflation.


A type of financial contract in which a person pays a lump sum or a series of payments in exchange for a guaranteed stream of income for the rest of their life.

Asset Allocation

An investor’s mix of stocks, bonds, and other investments. PERA’s strategic asset allocation is set by the PERA Board of Trustees.

asset class

A category of similar investments. Common asset classes include global equity (such as publicly traded stocks), real estate, and cash.

asset classes

A category of similar investments. Common asset classes include global equity (such as publicly traded stocks), real estate, and cash.

assets under management

The value of an investor’s entire portfolio. PERA reports this number, which includes all assets in the PERA Defined Benefit Plan division trust funds, every year in the Annual Comprehensive Financial Report.

assumed rate of return

The investment return a pension plan expects to achieve or beat over the long term. This rate is key to estimating how much money the plan will have on hand to pay future benefits.

Automatic Adjustment Provision

A provision of Colorado law that automatically changes PERA contributions (from employers, employees, and the state) and annual benefit increases based on PERA’s funding progress.

basis point

One hundredth of one percent. 100 basis points = 1%.


A tool used to measure performance. For example, an investor can use a stock index as a benchmark to measure his/her own investment performance compared to the market as a whole.


Acronym for cost-of-living adjustment; a type of annual adjustment meant to prevent a person from losing buying power due to inflation.

defined benefit

Also known as a pension, this is a type of pooled retirement plan in which the plan promises to pay a lifetime benefit to the employee at retirement. The plan manages investments on behalf of members, and the retirement benefit is based on factors such as age at retirement, years of employment and salary history.

defined contribution

A type of individual retirement plan in which an employee saves a portion of each paycheck (along with a potential employer match) and invests that money. The employee’s retirement benefit is based on their account balance at retirement. A 401(k) is a type of defined contribution plan.


The act of selling one’s investments in a particular company or sector, often for philosophical or political reasons.


Acronym for environmental, social, and corporate governance factors that can be used when making investment decisions.


A person who manages money on someone else’s behalf and who has a sworn responsibility to manage those funds in the best interest of the client.

Fixed Income

A type of investment that pays investors a fixed rate of interest over a set period of time. Bonds are a common type of fixed income investment.

Global Equity

A type of investment that includes publicly traded stocks in companies based in the United States and abroad.

Government Pension Offset

A provision of federal law that reduces Social Security dependent benefit payments to spouses, widows, and widowers who receive a government pension like PERA.

hybrid defined benefit

PERA’s Defined Benefit (DB) Plan is “hybrid” in that it combines features of a traditional DB plan with some of the features of defined contribution (DC) plans, such as portability.


The ease with which an asset can be converted to cash without a significant loss of value.

money purchase

The process of converting one type of retirement account to another, such as converting an account balance to an annuity to receive regular lifetime monthly income.


The ability to take an existing retirement plan with you when you change employers.

postponed indefinitely

A motion that halts all further consideration of a bill. In practice, this means the bill has failed.

Private Equity

A type of investment in which investors purchase shares of a company that is not traded on a public stock exchange.

proxy voting

The process by which shareholders can vote on corporate proposals without being present at a shareholder meeting.

Public Equity

A type of investment in which investors purchase shares of a company that is traded on a public stock exchange.


The practice of overseeing or managing something entrusted to one’s care. PERA’s approach to investment stewardship is focused on ensuring the financial sustainability of the fund that pays benefits to retirees and beneficiaries.

Total Fund

The combined assets of all PERA Defined Benefit Plan trust funds (division trust funds, health care trust funds, and life insurance reserve) across all asset classes.

trust fund

A fund in which money and/or other assets are held and managed by trustees on behalf of plan participants. PERA maintains trust funds for each of its Defined Benefit Plan divisions (State, Local Government, School, Denver Public Schools, and Judicial).

unfunded liability

The difference between the projected amount of money needed to pay benefits earned to date and the amount of money currently available to pay those benefits.


A state of unpredictable activity in financial markets, during which prices can experience significant and/or unexpected swings in either direction.

Windfall Elimination Provision

A provision of federal law that may reduce Social Security benefit payments to retirees who receive a pension based on work during which they did not contribute to Social Security. The WEP does not apply to those with 30 or more years of substantial earnings in Social Security.