No. The Madoff fund is a hedge fund, and the PERA Board of Trustees wisely decided not to invest in hedge funds when they become popular several years ago. Some of you have also asked if PERA invests in credit default swaps (CDSs) and credit debt obligations (CDOs). PERA does not invest in these types of instruments.
– Meredith (12/19/08)

PERA is not insured by the Pension Benefit Guaranty Corporation like company pension plans; however, PERA is backed by the over 400 public employers in Colorado who offer PERA as a retirement plan for their employees.
– Meredith (12/19/08)

Since PERA is a defined benefit plan, your benefit is not based on the fluctuations in the financial markets, but on your contributions, age, and years of service. Your contributions will earn interest compounded annually (the interest rate will be 3 percent effective January 1, 2009) until you refund or roll over your account, or reach retirement eligibility and choose to receive a monthly benefit or a lump sum distribution.
– Meredith (12/19/08)

No. You should not share your Personal Information Number (PIN) with anyone. Your PIN allows you access to your personal financial account information at PERA. With a PIN, you can make important changes to your account such as changing your beneficiary or mailing address (in certain cases). You may wish to read a story in the February 2008 Member Report about a financial advisor who was convicted of illegally closing and transferring members’ 401(k) accounts to accounts under his management. He did this, in part, by using PIN numbers given to him by PERA members.
– Meredith (12/12/08)

The PERA Board of Trustees and PERA staff have been closely monitoring the impact of the decline in the financial markets on PERA. As the markets have continued to decline, the Board directed staff to review all areas for possible ways to improve PERA’s funded status. Benefit payments to retirees and benefit recipients represent over 98 percent of PERA’s expenses. That leaves the benefits being earned by members (active and inactive) as the only area to examine for savings.

The Attorney General’s opinion contains the following language: “Once a PERA member fulfills all the statutory requirements for a pension benefit, retires and begins receiving a pension, the member’s fully vested pension right cannot be reduced by the General Assembly.”

At this time, we cannot say for sure what future accrual of benefits might be impacted for members who are not eligible to retire and have not yet retired.

Reporters like to put a local perspective on what’s happening nationwide and since PERA is the largest retirement system in the state, it’s a story that has broad appeal. PERA has been forthright in communicating the unprecedented situation we, and all retirement plans in the nation, now face. The most recent news can always be found on our Web site at www.copera.org under Latest News.
– Meredith (12/8/08)

Contributing to a flexible spending account, also called a Section 125 Plan, reduces the amount of salary on which your PERA contributions are based. PERA uses this salary (called “PERA-includable salary”) to determine your Highest Average Salary to determine your PERA retirement benefit. If the salaries used to calculate your PERA benefit include years with contributions to a Section 125 Plan, the benefit paid to you will be lower than if you did not participate in a flexible spending plan.
– Meredith (11/20/08)

Online resource: PERA & Section 125 Plans, PERA Retirement Process, Benefits Information Meeting, Retirement Process Meeting (If you are interested in attending a PERA benefits meeting, you may use the Meetings and Appointment Scheduler to find a meeting that’s convenient for you)

PERA receives quite a few inquiries about the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) provisions of Social Security. We have a brochure with information on how the WEP and GPO impact PERA members who do not contribute to Social Security during their careers. While PERA follows federal legislation, the best resource for information on current legislation in Congress would be the offices of Colorado’s Senators and Congressional Representatives.
– Meredith (11/20/08)

Online resource: PERA & Social Security, if you do not know how to contact your elected officials in Congress, you may use the Legislative Action Center on the PERA Web site.

Susan, you are prudent to follow the news about Penn Treaty if you currently have a policy with them. In these volatile financial times, investors and policyholders should be aware of the financial status of the companies with which they are doing business. PERA staff is closely monitoring Penn Treaty's current situation, and we remain confident that PERA members who hold Penn Treaty policies are protected. We do not believe that Penn Treaty is about to declare bankruptcy, as you state. To the contrary, they are working with their regulators to develop a "voluntary rehabilitation" plan that will enable them to resume sales of new policies. Of importance to you directly, Penn Treaty sold individual policies to PERA members and retirees; those policies are protected by state insurance guaranty funds. Even if the insurance company were to stop operations–which we do not expect–state insurance regulators would step in to protect policyholders with policies in force. 

As I am sure you can appreciate, PERA cannot give you personal financial advice about whether another insurance policy would be better for you. PERA does expect to have arrangements in place with an additional long term care insurer in the near future, though, so that new policies can again be made available to PERA members and retirees. News will be posted on our Web site when it becomes available.
– Meredith (10/17/08)

We’ve posted information on the impact of the markets on our Web site on the Latest News page. A good reference point that gives members and retirees a foundation to begin understanding how PERA is impacted is the Shareholder Presentation. This presentation outlines the reasons why PERA is able to weather the ups and downs of the markets.

For retirees like Don, your PERA benefit will not decrease and you will receive your annual increase in 2009.
– Meredith (10/10/08)

To answer Sandy’s question, Colorado PERA was invited to testify at Congressional hearings on the demise of Lehman Brothers. PERA’s General Counsel represented other large public pension plans in his testimony before the House Committee on Oversight and Government Reform on Monday, October 6. We have the testimony posted on our Web site.
– Meredith (10/10/08)

In 2002, school districts sought legislation to allow small school districts meeting certain requirements to employ PERA retirees as teachers and principals for more than the 110-day/720-hour calendar year limit.  In 2003, legislation was passed that extended this critical shortage provision to other school district personnel such as bus drivers and cooks.  Both of these laws expired on June 30, 2005.  The PERA Board of Trustees has not considered seeking similar critical shortage legislation in 2009.
– Meredith (10/2/08)

PERA retirees may work for any employer not affiliated with PERA after retirement without restriction. However, State law specifies that retirees who return to work for a PERA-affiliated employer may only work for 110 days or 720 hours in a calendar year. State law also requires the employers of rehired retirees to pay the employer contribution rate (retirees do not pay the member contribution).  Some employers reduce the salary being paid to retirees that they’ve rehired to cover the cost of the employer contribution. 

These are the primary rules on working after retirement. Additional restrictions may apply depending on your specific situation. We have extensive information on these rules in our publications or you may contact PERA’s Customer Service Center with questions specific to your situation.
– Meredith (8/22/08)

Online resources: Working After Retirement booklet, Working During the Effective Month of Retirement fact sheet

That’s a great question, Gary.  You’re right, Americans are living longer, and Colorado ranks as one of the healthiest states in the nation. In order to account for these facts, PERA’s actuaries review PERA’s active and retired member population at the end of every year and recommend changes to life expectancy assumptions to the Board of Trustees.  At least every five years, another actuarial firm audits the assumptions made by the current actuary and may also recommend changes to the Board of Trustees.  The life expectancy variable is one of several assumptions that are reviewed each year by the actuaries, PERA staff, and the PERA Board of Trustees.  If adjustments need to be made, the Trustees can do so.  Some retirement systems use standardized mortality tables that are developed by the insurance industry to predict how long their retirees will live.  PERA uses the experience of our own population to predict what may happen in the future, which we think is a much more reliable source of information.
– Meredith (8/22/08)

Online resource: Actuarial Section of the 2007 Comprehensive Annual Financial Report (CAFR)

Many of you have written to me about the proposed PERA/DPSRS merger, and I thank you for expressing your opinions and concerns. Whether you have told me you are for or against the merger, the bottom line is that neither the PERA plan nor the DPSRS plan can be negatively impacted. That means that benefits cannot be enhanced by combining years of service in each plan, and that PERA is not “bailing out” DPSRS or DPS, or the other way around. Look for details about the merger under Latest News.
– Meredith (8/8/08)

The majority of the “Other” category under the Contributions/Deductions columns in the Summary Report represents transfers out of the various division trust funds into the Health Care Trust Fund for purchases of service credit. If a retirement benefit includes a service credit purchase, a percentage of the purchase amount is transferred to the Health Care Trust Fund when a member retires. This ensures that if a member qualifies for an increased health care subsidy as a result of a purchase of service credit, that the money for subsidies is available in the Health Care Trust Fund. The remainder in the “Other” category includes fee income, loan interest, and recovered 401(k) distributions.
– Meredith (8/8/08)

Online resource: 2007 Comprehensive Annual Financial Report (CAFR)

PERA ranks in the top 50 percent in investment performance when compared to other public pension funds over the last 10 years. Over the last five years, PERA’s investment performance ranks in the top 25 percent when compared to other public funds. The PERA portfolio is also diversified among the various asset classes (international and domestic stocks, bonds, private equity, real estate) based on PERA’s unique member and retiree population in order to fulfill PERA’s ultimate goal – to be able to pay benefits to current and future retirees.
– Meredith (8/8/08)

Yes. If your employer offers a 457 Plan, you may contribute to both the PERA 401(k) and your employer’s 457 Plan. The maximum contribution to each plan is $15,500 ($31,000 to both) in 2008. If you are age 50 and older, you may be able to contribute another $5,000 to each plan. Check with your employer to see if they offer a 457 plan.
– Meredith (8/8/08)

Keep in mind that PERA is a long-term investor with a time horizon that is much longer than individuals have.  PERA does not "time the market" nor do we actively move assets to less risky investments when the market is falling.  Because PERA is a long-term investor, we know that at times we'll have losses, but those losses will be offset by gains over the long run in PERA's diversified investment portfolio. The bottom line is that the PERA portfolio is well diversified and able to withstand the ups and downs of the market over time.
– Meredith (8/1/08)

Online resources: 2007 Comprehensive Annual Financial Report (CAFR), 2007 Summary Annual Financial Report, Investments Overview