Retirement insights from a Colorado PERA perspective

Issues & Perspectives

PERA Benefits Provide Economic Stability During Uncertain Times

This article is a part of National Retirement Security Month 2021 series
  • Part 1

    What ‘Retirement Security’ Means to PERA Members

  • Part 2 – Currently Reading

    PERA Benefits Provide Economic Stability During Uncertain Times

Smiling middle aged woman using laptop computer
Photo credit: Getty Images

This is the second in a series of articles for National Retirement Security Month exploring how Colorado PERA provides retirement security to public employees.

Stability amid uncertainty

At a time when many people have struggled to save for retirement on their own, PERA has continued to pay retirement benefits that support retirees and Colorado’s economy.

When the COVID-19 pandemic began in early 2020, businesses shut their doors, stock markets dropped, and many people found themselves facing the loss of income and savings. That economic disruption was especially painful for older Americans who rely on their savings for income in retirement: A recent survey by The Commonwealth Fund found that in the United States, 19 percent of adults 65 and older used up all or most of their savings or lost a source of income during the pandemic. That’s a higher percentage than other high-income countries included in the survey.

For public sector employees who participate in a defined benefit pension plan like what PERA offers, benefit payments have offered some financial stability during otherwise uncertain times.

The value of reliable income

Retirees who rely on retirement plans like 401(k)s or their personal savings have to carefully track their withdrawals during retirement to make sure they don’t overspend and deplete their accounts. But in a defined benefit retirement plan, retirees receive a monthly payment that isn’t determined by their account balance, and a retiree cannot outlive their benefit.

While the COVID-19 pandemic and its effects have been felt far and wide, PERA continued to pay monthly benefits to the thousands of retirees in Colorado who rely on them.

PERA benefits paid by county
PERA benefits paid by county in 2020. Click for more detail.

In 2020, PERA paid more than $4.2 billion in pension benefits to more than 107,000 retirees living in Colorado, with an average monthly benefit of $3,204. Those benefit payments translate to billions of dollars in spending, supporting local businesses and jobs. In 2019, a report by Boulder-based Pacey Economics calculated that retiree spending in Colorado supported more than 32,000 jobs.

The stabilizing effect of PERA benefits is especially important in Colorado’s rural areas, where retiree income makes up a greater share of area payroll. In 26 Colorado counties (nearly all rural), these distributions represent at least 10 percent of the county’s total payroll.

In addition, PERA had more than $808 million invested in Colorado-based companies, partnerships, and assets as of the end of 2020. Those investments include equity of companies headquartered in Colorado and real estate investments. PERA also employs investment managers with operations and employees in the state.

Together, PERA benefits and investments strengthen Colorado’s economy and help provide stability during periods of uncertainty. And although changes to PERA — including increased contributions and a decreased Annual Increase — have been difficult for everyone, they have resulted in a more resilient plan that is able to continue to pay monthly lifetime benefits while meeting its funding goal.

Annual increaseAn 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.Defined benefitAlso 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.

This article is a part of National Retirement Security Month 2021 series
  • Part 1

    What ‘Retirement Security’ Means to PERA Members

  • Part 2 – Currently Reading

    PERA Benefits Provide Economic Stability During Uncertain Times


  1. Susan Brown says:

    While PERA retirees keep loosing cost of living increases, Social Security beneficiaries are getting more than a 5% raise! We continue to go backwards as the cost of everything increases! When I retired 20 years ago, I was “guaranteed” an annual 3.25% increase. I realize things change but I’m very disappointed that we aren’t keeping up with costs in any way! 1%, REALLY?????

  2. Mary Upton says:

    When I lived in Colorado, the living costs were going up every year. I was to the point I couldn’t afford my medications and even the cost of food was (and still is everywhere) out of reach if you wanted to eat something more than beans and pay for your bills and afford medications. I depend on my retirement to live. After I moved from Colorado to a different state- I can now afford to live and even go out occasionally and still get meds. My biggest problem now is paying state taxes to the state I moved to.

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