Retirement insights from a Colorado PERA perspective

Legislation & Governance

Reviewing the positive impact of SB 200

impact of SB 200

To briefly summarize the reasons why the PERA Board sought legislation in 2018 that would adjust benefits and increase contributions:

  • Full funding in 30 years complies with Colorado statute and the PERA Board’s policy.
  • Full funding in 30 years gives PERA the ability to withstand inevitable future market shocks.
  • Full funding in 30 years matches the employment pattern of Colorado’s public employees better, thus ensuring intergenerational equity.
  • Full funding in 30 years strengthens the State’s credit rating.

Although the changes included in SB 200 are difficult, they were necessary to ensure the long-term retirement security of PERA members. Some of the positive outcomes of SB 200 are below.

Reducing liabilities.
With the changes in SB 200 and the 2017 investment return, PERA’s liabilities were reduced by $3.4 billion. This is a significant amount that reflects the sharing of responsibilities for righting the system among current and future members (who will pay more, will potentially have to work longer, and will have to wait at least three years before becoming eligible for an annual increase), retirees (who will have no annual increases in 2018 and 2019 and then a 1.5 percent cap), employers (who will contribute more), and the State of Colorado’s payment of the direct distribution.

Improving PERA’s funded status.
The funded ratio is a measure of funds available today compared to current and future payable benefits and is expressed as a percentage. PERA’s funded status also increased as a result of SB 200 and 2017 investment returns, going from 58 percent at the end of 2016 to 61 percent at the end of 2017.

Accelerating the time to reach full funding.
The time to reach full funding in each division is now within a 30-year time frame. By shortening the time it will take to reach full funding, the trust funds are better able to withstand inevitable fluctuations in the financial markets.

Division Projected Period of Time to Reach Full Funding Prior to SB 200 Projected Period of Time to Reach Full Funding
Post SB 200
State 58 years 27 years
School 78 years 30 years
Local Government 55 years 15 years
Judicial 54 years 15 years
Denver Public Schools (DPS) 56 years 17 years

SB 200 changes positively recognized by S&P.
One of the primary reasons cited for needing to pass SB 200 this year was the possible negative effect PERA’s unfunded liability could have on the State’s credit rating. Last fall, the Standard & Poor’s (S&P’s) credit rating agency issued a warning that a potential downgrade to Colorado’s credit rating could occur, due in part to the State’s long record of underpaying its share of the PERA fund costs. After the enactment of SB 200, S&P Global Ratings revised the outlook to stable from negative.

SB 200 is in line with PERA’s mission.
The actions taken by the PERA Board, the General Assembly and Governor, alongside PERA’s membership and stakeholders are notable and fulfill a commitment to promote the long-term financial security of the PERA membership while maintaining the stability of the fund.

For more information, see The Positive Impact of SB 200 fact sheet.

Trust fundA 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 liabilityThe 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.


  1. Richard Lansford says:

    school systems are having a difficult time recruiting new teachers??

    • Colorado PERA says:

      Dear Mr. Lansford,

      Thank you for your comment. The PERA benefit continues to be a strong attraction and retention tool for Colorado’s public employers (including school districts). The PERA plan remains competitive and cost effective when compared to other retirement plan designs.

  2. Christopher Richards says:

    “Positive Impact” my eye! I have a contract with PERA that says I receive an annual 3.5% COLA, you’re in clear violation by any ethical measure. Keep your promise of this “guarantee” and find the money somewhere else, starting with axing the sweetheart deals received by Judicial and State Police, the very deals you continue to avoid speaking about in any meaningful fashion.

    The full funding date is purely arbitrary, as long as we’re not losing ground just push it out another 10 years and fulfill the contract we agreed to. Make the “needed” adjustments on the front end as people enter the system.

    • Colorado PERA says:

      Dear Mr. Richards,

      The Colorado Supreme Court ruled (in 2014) that the Annual Increase or COLA may be adjusted, as it had been in the past. Members of the State Patrol contribute more to PERA so that they are able to retire at an earlier age. Each membership division (State, School, Local Government, DPS, Judicial) is a separate trust fund and the demographic experiences each division are evaluated separately. Members and employers of one division do not subsidize the members and employers of other divisions.

      The time it would take for the PERA trusts to reach full funding had increased substantially prior to SB 200 as outlined in the table in the article above.

      New members will contribute more, have to work longer, and receive less in retirement. The reality is that the changes in SB 200 had to be made to ensure the financial health and durability of the trusts.

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