Retirement insights from a Colorado PERA perspective

Inside Colorado PERA

Recap of the PERA Board’s November 2022 Meeting

The PERA Board of Trustees met for its last meeting of 2022 on Nov. 18. The Board heard updates from PERA staff and consultants, and considered several important issues, including the next Board election, the member contribution interest rate, the results of the actuarial audit, and the Board’s strategic planning process.

2023 Board election

The Board approved the calendar for the 2023 Board election, where four seats will be up for election:

  • School Division – currently held by JB Phillips
  • Local Government Division – currently held by Trina Ruhland
  • Judicial Division – currently held by Hon. Rebecca R. Freyre
  • Retiree – currently held by Timothy M. O’Brien

Candidacy application will begin January 3 and the election will be held in May

Member contribution interest rate

By statute, the PERA Board is required to set the interest rate paid on PERA Defined Benefit (DB) Plan accounts. In 2020, the Board updated their policy regarding the setting of the interest rate. The policy reflects the Board’s principles and evaluates the interest rate as a component of members’ overall retirement benefit. Based on the guidance provided in the policy, the Board voted to keep the current rate of 3% (compounded annually) for 2023.

If a PERA member leaves PERA-covered employment and requests a refund of their DB account, they receive their contributions, the interest earned on that balance, and any applicable employer match. If that member keeps their account with PERA, however, their balance will continue to accrue interest and the member will be eligible for a lifetime monthly benefit when reaching retirement eligibility.

Results of actuarial audit

The Board heard the results of an independent audit of the work of PERA’s actuarial consultants, The Segal Group, Inc. The audit, by consulting firm Buck Global, LLC, found that Segal’s actuarial assumptions and methods are sound and in compliance with actuarial standards of practice.

Related: Explaining the Role of Actuaries in Retirement Plans like PERA

Strategic plan update

Executive Director Ron Baker spoke about how the Board is continuing with its yearlong process to develop a new strategic plan to guide the organization and emphasized the current plan’s four key goals: (1) To fortify PERA’s financial resilience and adaptability, (2) to elevate PERA’s identity among stakeholders to that of a partner, (3) to strengthen organizational health and performance, and (4) to improve retirement security through “best fit” products, services, and education.

The Board will continue working on a draft plan throughout 2023, with the goal of adopting a new strategic plan for 2024 – 2029 by the end of the year. The strategic plan will guide the efforts of PERA staff.

Comments

  1. Roger Brisnehan says:

    So, our cost of living has gone up at least 8%, and the board voted to give us a 3% raise?
    I’m seeing a disconnect here. Hard to figure out what that might be. 🤔

    • PERA On The Issues says:

      Hi Roger, the 3% rate the Board sets is the interest paid on member contributions — not the annual benefit increase that retirees receive, which is set in statute and adjusts up or down based on PERA’s funding progress. You can learn more about annual increases here: https://www.copera.org/annual-benefit-increases

      • Bruce Knight says:

        Regarding the link provided for annual increase, there’s some good information on what happened when the PERA financials are “On Track”, or “Not on Track”. What is it that we are trying to be “on track” to achieve? Were there financial issues with PERA before the Legislature enacted this law? Or was the definition of of what the annual balance sheet get changed- so there was not a problem under the prior standards but now there is since the standards changed (presumably by GASB or a similar organization)? Even a link that could enable us to go see this information would be great.

      • Charl+Hill says:

        It was 3 percent about twenty years ago. 2 percent when I retired. Now 1 percent. Agreed it’s time for some catch ups. But I am thinking we’ll have to get a justified COLA increase in the near future. It’s really time to limit some of the huge salaried retirees to an acceptable level so we can all survive. Seriously some of retired pay outs from PERA are really over what the base line retirees could ever hope for. Meaning: at least a 3 percent annual increase for let’s just say anyone who retired at less than $200,00, over that let’s just say 1 percent. I wonder how the math numbers would compare on the long run? And a more favorable distribution of COLA really for all.

    • Mark says:

      The raise will only be 1%. You will not even notice it.

    • John says:

      This is only the beginning of the beginning. The rug has been pulled out from under us and there is nothing we can do. Get used to having less finances to live on year after year. The rising cost of health insurance alone is going to squeeze us, let alone the other costs. Sorry.

  2. Joan Bryant says:

    I love PERA and feel the board does do a great job. That said I absolutely resent a measly 1% increase with inflation raging! I entered into a contract when I worked for my department and when I retired! I understand that at times due to circumstances beyond PERAs control we needed to adjust. But several years we got no increase! I retired in 2002! We’ve had minimal cost of living adjustments since then!!! The state repaid what they didn’t pay during Covid. The stock market has faired pretty good too. But we still are only getting 1%!! Even the idiots that run social security recognize the need for adjustment for 2023!!! So overall I don’t know how we can be expected to keep paying our ever increasing bills and not get better increases!!!! Absolutely unacceptable!!!!

    • Bruce Knight says:

      I think we all keep asking this question, especially now with the COL going through the roof. Sometimes we get a link to an audit (if we’re lucky), but most of the time it’s blamed on the relevant Legislature. I wish that we could get more definitive info on what it is that the PERA Board are trying to achieve, given the state of the stock market, inflation and the adverse fiscal affects of the pandemic now addressed. I also replied above.

    • Nancy Higgins says:

      Agree wholeheartedly with empty pockets!

    • Janet Marti Cook says:

      Well said and totally agree.

  3. Mark Hardy says:

    PERA,
    Can you please share the actuarial assumptions and what changed up/down? Thank you!

  4. Kim Anderson says:

    I thought that as one aged, that the sex would diminish…but looks like I’m getting screwed now more than when I was younger!

  5. Annie Cochran says:

    Maybe those who do not understand the process of the one percent and how it comes about should consider running to be a board member.

    • Fred Boettcher says:

      Better yet, become a legislator and oppose pera who supported the 1% plan. Change the law. Dems control everything. I thought dems fought for the working class. I thought wrong.

      • Kathleen Barrett says:

        Thank you, Fred. Well said and I fully agree.

      • Mary Pridgen says:

        As I understand it, it’s been PERA and the Dems who have had to fight tooth and nail for even the measly 1%COLA. Republicans would have voted for zero again, and are all about not giving raises at all unless PERA is fully funded, period. If you can show me a Republican who is advocating for restoring the 3% COLA we were promised when I retired, I might consider voting for them. But until then, it’s the Democrats who I see being on my side, as ever.

        • George Kahler says:

          It was a bi-partisan tacking/theft in 2010. A porthole brought it too the floor and a pub seconded it. So you see the dems onboard all the way and led the law breaking. ABI was and is still in statute. No ABI 2010 2018 2019 was illegal. Zero is not and increase.

      • Lisa TEMPLETON says:

        Agree. Since the democrats have taken office, everything has become a disaster, especially all financial matters. Prices keep rising, but our paychecks and retirements do not keep up. Sad.

  6. Katby says:

    I would like to see the wage report on all PERA personnel… I would guess they received more than what those of us who fund them receive.
    I think they all need to be let go and their salaries paid into the PERA fund.
    Total incompetence

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