Independent Studies on Colorado PERA
In the 2014 legislative session, the Joint Budget Committee sponsored Senate Bill 14-214, which created and funded three separate studies to be conducted by neutral, outside experts to examine aspects of the benefit and funding structure of PERA. The Board of Trustees supported the bill and it was signed into law by Gov. Hickenlooper on June 4, 2014. All three studies were completed in 2015.
In January 2015, the Colorado Department of Personnel and Administration incorporated retirement benefits into the State’s annual total compensation survey, which was conducted by the actuarial firm Milliman. The Colorado General Assembly had asked that the salary survey include the value of the PERA retirement benefit. Specifically, Senate Bill 14-214 required a comparison between the retirement package provided to State employees through PERA to retirement packages offered by both private companies and other states.
In July 2015, the second study was released by the Colorado Office of the State Auditor, which was an independent evaluation of PERA comparing the costs and effectiveness of PERA’s DB Plan to alternative plans in the public and private sector. Nationally recognized actuarial firm Gabriel, Roeder, Smith & Company (GRS) conducted a comprehensive evaluation for this study.
In October 2015, the third study was released, which was a sensitivity analysis of PERA’s actuarial assumptions. This study was overseen by the Colorado Office of the State Auditor and performed by Pension Trustee Advisors (PTA). The analysis looked at the various components used in determining PERA’s financial health. A second objective of the study was to develop an understandable format for communicating PERA’s progress toward becoming fully funded for a broad spectrum of stakeholders and policymakers. To fulfill this objective, PTA developed a signal light methodology for evaluating PERA.