Concerning an expansion of plan options for the public employees' retirement association.
Summary
HB26-1026 expands several retirement-related options within the Colorado Public Employees' Retirement Association (PERA). The bill allows eligible PERA members to purchase service credit for certain prior periods of unemployment, including time when the member was at least 21 years old and not earning PERA service credit, subject to documentation and other existing purchase rules. It also clarifies and updates the rules for purchasing service credit for noncovered time, including limits tied to federal tax law and requirements that the purchase not duplicate retirement benefits under another plan.
The bill further broadens PERA’s voluntary savings offerings. It requires PERA’s voluntary investment program to include both tax-deferred and Roth voluntary contribution options, and it requires PERA employers to affiliate with the deferred compensation plan and offer it to employees. The deferred compensation plan must also include pre-tax and Roth contribution options. The bill makes conforming changes across PERA statutes, including provisions governing trust funds, service credit purchases, disability and survivor benefit calculations, and the treatment of contributions and rollovers. It takes effect January 1, 2027, unless referred to the voters.
Impact
The bill amends multiple sections of Title 24, Article 51 of the Colorado Revised Statutes governing PERA. It changes the definition and purchase rules for noncovered service, adds a new category of purchasable unemployment-related service credit, and adjusts how purchased service credit is funded and credited to PERA’s health care trust funds. It also requires PERA’s voluntary investment program and deferred compensation plan to offer Roth-style contribution options and expands employer participation requirements in the deferred compensation plan. These changes affect PERA members, retirees, affiliated employers, and the administration of PERA trust funds and contribution programs.
Sentiment
The available record shows no committee transcript or recorded vote data, so there is no detailed public debate reflected in the provided materials. Based on the bill’s structure and its successful passage to gubernatorial signature, the overall legislative posture appears favorable. The bill was sponsored in both chambers and ultimately signed by the governor, suggesting broad support for expanding retirement planning and service-credit purchase options for PERA participants.
Contention
The main policy issues likely concern the cost and actuarial impact of allowing additional service-credit purchases and expanding contribution-plan options, especially because the bill requires purchases to cover actuarial liability and touches PERA trust-fund allocations. Another possible point of contention is the mandate that employers affiliate with the deferred compensation plan and offer new Roth and pre-tax options, which could raise administrative burdens for participating employers. The bill also includes federal tax-law constraints and anti-double-dipping protections, indicating concern about compliance and preventing members from receiving duplicate retirement benefits for the same service.