Retirement Under the DPS Benefit Structure
Benefit Eligibility
You are eligible to receive a monthly retirement benefit when you meet the age and service requirements listed below. If you have less than five years of service credit under the DPS benefit structure, you do not have the option to apply for a monthly benefit and you are only eligible for a refund of your account.
If you had five years of service credit on January 1, 2011, the following age and service requirements apply:
| DPS Benefit Structure-Service Retirement Benefit | |
| Minimum Age | Minimum Service Credit |
| 50 | 30 years |
| 55 | 25 years* |
| 65 | 5 years |
*15 years must be earned service credit
| DPS Benefit Structure-Reduced Retirement Benefit | |
| Minimum Age | Minimum Service Credit |
| 55 | 15 years |
| Any age | 25 years |
If you did not have five years of service credit on January 1, 2011, the following age and service requirements apply:
| DPS Benefit Structure-Reduced Retirement Benefit | |
| Minimum Age | Minimum Service Credit |
| Any age | 35 years |
| 55 | 30 years* |
| 60 | 25 years |
| 65 | 5 years |
*20 years must be earned service credit
| DPS Benefit Structure-Reduced Retirement Benefit | |
| Minimum Age | Minimum Service Credit |
| 50 | 25 years |
| 55 | 20 years |
| 60 | 5 years |
Benefit Calculation
Your retirement benefit is determined by the higher of a minimum benefit calculation or a defined benefit calculation as explained below.
Minimum Benefit Calculation
Retiring members are entitled to a minimum benefit of $15 per month for each of the first 10 years of service and $20 per month for each additional year of service plus the money purchase calculation. The money purchase calculation is determined by the life expectancy and the value of your account at the time you apply for retirement. If you are an inactive vested member, not retirement eligible at the time of termination, and you terminated employment on or after January 1, 2001, your money purchase calculation will also include a matching amount equal to 100 percent of your contributions and interest.
Defined Benefit Calculation
The defined benefit calculation is based upon your years of service, age, and Highest Average Salary (HAS). If you meet the eligibility requirements for a service retirement, your defined benefit will be 2.5 percent of your HAS for each year of service credit. The HAS percentages for reduced retirement for various years of service credit are shown in the shaded areas of the DPS Benefit Structure Highest Average Salary Percentages tables. On tables 10 and 11, the shaded areas ensure that, as of your effective date of retirement, your reduced service retirement benefit is the actuarial equivalent of your full service retirement benefit. These percentages are subject to change based on actuarial experience. See the HAS Percentages Tables page.
Benefit Options
When you apply for a monthly retirement benefit, you will choose one of the following benefit options listed below for payment of your benefit. If you do not choose an option, your benefit will be paid as an Option A. If you choose Option P2 or P3, you will select a cobeneficiary who will receive a continuing monthly benefit after you die. Only one cobeneficiary may be chosen. In making your selection, you should consider your age, financial obligations, health, income from other sources, and needs of your spouse or other persons.
| Cobeneficiary (Co-annuitant): | The person you designate under the DPS benefit structure Options P2 and P3 to receive a continuing monthly benefit after your death. You may name only one cobeneficiary. | |
| Option B Beneficiary(ies): | The person(s) designated under Option B to receive the remainder of monthly benefits should you die before the end of the guaranteed period of payments. | |
| Named Beneficiary: | The person(s) or entity you designate to receive a lump-sum payment of any remaining moneys credited after all monthly benefits have been paid. | |
Option A: |
This option provides you with a lifetime monthly benefit. Following your death, a single payment of any remaining balance in your member contribution account, without a match, will be made to your named beneficiary, or your estate if no named beneficiary exists. No further monthly benefits are payable. |
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Option B: |
This option provides you with a lifetime monthly benefit. As part of the retirement calculation, your member contribution account is annuitized to determine the guarantee payment period. If you die before the end of the guarantee period, your Option B beneficiary(ies) will receive your remaining monthly payments through the end of the guarantee period. If your Option B beneficiary(ies) dies before the end of the guarantee period, a single payment will be paid to your estate. No further monthly benefits are payable. |
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Option P2: |
This option provides you with a lifetime monthly benefit. Following your death, your cobeneficiary will receive a lifetime monthly benefit equal to one-half of the benefit you were receiving at the time of death. If there is an account balance after the death of your cobeneficiary, a single payment of any remaining balance in your member contribution account, without a match, will be made to your named beneficiary, or your estate if no named beneficiary exists. No further monthly benefits are payable. |
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Option P3: |
This option provides you with a lifetime monthly benefit. Following your death, your cobeneficiary will receive a lifetime monthly benefit equal to the monthly benefit you were receiving at the time of death. If there is an account balance after the death of your cobeneficiary, a single payment of any remaining balance in your member contribution account, without a match, will be made to your named beneficiary, or your estate if no named beneficiary exists. No further monthly benefits are payable. If you name someone other than your spouse who is more than 10 years younger than you as your cobeneficiary, the amount that continues to your cobeneficiary at your death could be limited in accordance with percentages required by the Internal Revenue Code regulations. For information about the percentages, please call PERA's Customer Service Center. |
Option A benefits are calculated as described above. Benefits under Options P2 and P3 are calculated the same as Option A, then reduced to pay for continuing monthly benefits to your cobeneficiary. The factors used to calculate Options B, P2, or P3 benefits may change whenever actuarial assumptions are changed. If you select an Option P2 or P3 and your cobeneficiary dies before you, your benefit will be changed to the Option A amount.
See Calculating a Retirement Benefit Under the DPS Benefit Structure for Option A, B, P2, and P3 benefit calculation examples.
Factors That May Affect Your Benefit Amount
Furlough Days
Some Colorado PERA employers have required their employees to take furlough days (days off without pay). The reduction in your salary for these days off may lower the HAS used to calculate your retirement benefit.
If you had furlough days from July 1, 2002, to June 30, 2004, you may opt to make contributions on the amount that your salary was reduced. If you make up these optional contributions, in some cases, it may increase your HAS. See the Colorado PERA and Furlough Days From July 1, 2002, through June 30, 2004 fact sheet.
If you are within 90 days of your effective date of retirement and have filed a PERA Retirement Application with PERA, you will receive information from PERA about the cost of these optional member contributions and the possible effects on benefits. Upon receipt of this information, you have 30 days to make these contributions or you will lose the right to pay them.
Currently, State law does not allow any other make-up contributions of furlough days. For information on furlough days after June 30, 2004, see the Colorado PERA and Furlough Days After June 30, 2004, fact sheet
Federal Limits on Benefits
If you are under the DPS benefit structure, choose Option P3, and name someone other than your spouse who is more than 10 years younger than you as your cobeneficiary, the amount that continues to you cobeneficiary at your death could be limited in accordance with percentages required by the Internal Revenue Code regulations.
Benefits paid under the DPS benefit structure are subject to a federal annual limit on the amount of retirement benefits that PERA retirees may receive under Internal Revenue Code (IRC) Section 415. IRC Section 415 benefit limits are designed to prevent individuals from accruing excessive pension benefits on a tax-deferred basis.
PERA has developed a process called a Replacement Benefit Arrangement that provides for your employer to pay you the amount you are not being paid by PERA because of the federal tax limit. This is done at little or no cost to the employer.
For more information on how this limit may affect your future DPS retirement benefit, see the Federal Limits on Benefits page.
PERA Benefits and Domestic Relations Orders
If a you have a valid domestic relations order (DRO) on your account, part of the monthly benefit will be paid to you and part will be paid to the alternate payee (your ex-spouse) as specified in the DRO.
See the Divorce and Domestic Relations Orders page for more information.
PERA Funds and Legal Process
PERA retirement benefits can only be subject to legal process for federal and Colorado State tax liens, assignments for child support purposes, garnishments for child support arrearages or child support debt, and valid domestic relations orders. PERA retirement benefits are also subject to attachment for restitution for theft, embezzlement, misappropriation, or wrongful conversion of public property. Attachment is also allowed in the event of a judgment for a willful and intentional violation of fiduciary duties where the offender or a related party received direct financial gain. PERA benefits are not otherwise subject to execution, levy, attachment, garnishment, or bankruptcy proceedings and cannot be assigned voluntarily or involuntarily.
View, print or order the PERA Retirement Process booklet.