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\D:*:-~- ~ ~ ) ~ J...\ c.- Public Employees' Retirement Association of Colorado 1999 PERA Legislation ~ LI2~i5.lation 2000 LeOlslatton 1999 Leoislation 1998 State Leoislation Federal Le~slation AffectlnO p RA Leoislative Links Mandatory Social Secunt;L g~}rtefits t'J,eV'J5 ,i2't PL~~~ .:;Ct11k\ Pi,Hl A<>(_GUnt f~~c~sS I,. " .', " I 10f4 000704 Questions & Feedback 2000 PERA Legislation - (updated March 24, 2000) The PERA Board of Trustees decided in the summer of 1999 not to seek any legislative changes itself during the 2000 General Assembly. Its goal was to allow SB99-90, enacted last year, to take effect and give time for the fund to adjust to the new liabilities due to SB99-90. However, other parties have initiated legislation that affects PERA. Here is a report on those bills: Benefit Prol!ram Chanl?;es: On March 23, the proposal to make benefit changes in PERA was assigned a bill number - HB1458. The bill is scheduled for a hearing before the House Local Government Committee on Monday, March 27, The bill was initiated by the Owens' Administration and is an effort to make it more attractive for some long-term employees to leave state service and retire. The Admini~tration's New Century Colorado ,Program is planning to use technology more to improve services to the public, and to reduce State staffmg voluntarily. Consequently, since PERA is a system involving more than state employees, the changes, as allowed for in the bill, will apply to all PERA members if passed. PERA representatives began meeting with State officials in November and have reviewed the cost to PERA to make these changes, PERA negotiated with the Administration to ensure legislation would not impact PERA's ability to begin the DC match program, The Administration's proposal included a reduction in the cost to purchase service credit. Since the authority to set the cost to purchase service rests with the PERA Board of Trustees, this was removed from the legislative proposal and, on February 18, the Board of Trustees voted to decrease the cost to purchase service credit to 15,5% for most members, 20.0% for Judges, and 20.4% for State Troopers effective on that date. The Administration obtained sponsors for the bilL They are Sen. Dave Owen (R-Greeley) and Rep. Doug Dean (R-Colorado Springs). The bill includes the following: . Moving forward the date for a permanent reduction in the contribution rate for State, School and Judicial employers, The reduction will move from January 1,2001, to July 1,2000. The contribution rate reduction was part of SB99-90 last year; the reduction is one percent of pay (approximately a 10 percent reduction. in the amount PERA receives from those employers). . Changing the age and service requirements for retirement eligibility with an unreduced benefit. commonly called the Modified Rule of 80, this change eliminates the early retirement reduction factor if a member's age and service added together equals 80 and if the member is at least age 55. The benefit calculation would be the same as for service retirement: 2.5% x Years of Service x HAS, (This change also lowers the reduction factor for some other members who may not have an "80" combination but who are now closer to service retirement eligibility and consequently have a lower reduction." . Example: 24 years of service at age S6 currently has a benefit of 52.8%. This bill would change this combination to a 60% benefit (24 years x 2.5%). View the proposed Benefit Percental!e Table. Note: The area highlighted shows the new percentages caused by the MR of 80 provision; a reduction factor still applies to some of the percentages highlighted since they do not equal 80. . Allowing state classified employees eligible for retirement and hired before July 1, 1988, to elect to convert all or a portion...of their accumulated sick leave in excess of 360 hours into salary subject to PERA contributions between July 1,2000, and July 1,2005. Employees could elect to convert a 4/12/20-