Resources to Help Your Employees Understand New PERAPlus Plan Options
October 2, 2026
Beginning January 1, 2027, all PERA-affiliated employers will be required to offer employees both the PERAPlus 401(k) Plan and the PERAPlus 457 Plan. In addition, both plans will offer employees the choice to make contributions on either a traditional (pre-tax) or Roth (post-tax) basis.
As you prepare for these changes, your employees may have questions about what the new options mean and how the PERAPlus 401(k) and 457 Plans differ. To help you communicate these changes, Colorado PERA has developed resources you can share directly with your employees.
What is changing?
House Bill 26-1026, passed during the 2026 legislative session, requires all PERA-affiliated employers to offer the PERAPlus 457 Plan and Roth contribution options for both the PERAPlus 401(k) and 457 Plans beginning January 1, 2027. Employers must be prepared to offer and administer these options by that date.
The changes may look different depending on the plans you currently offer:
If you already offer both PERAPlus Plans and Roth options
Enrollment and deferral changes for the 457 Plan will no longer be performed through the Empower website and instead will originate through the employer, like the 401(k) Plan. This change will make enrollment and deferral changes consistent between both plans to simplify the sign up and election process for our members and minimize the effort of employers to implement the significant changes within their payroll systems. Colorado law requires that all employees have access to both plans and contribution options. As a result, all employers are responsible for having their own payroll systems set up to report contributions for both plans with the pre-tax and Roth deferral options by the implementation date of January 1, 2027.
If you already offer the PERAPlus 457 Plan
Your employees will continue to have access to the 457 Plan, but you will also need to provide the Roth option for both the 401(k) and 457 plans. Enrollments and deferral changes for the PERAPlus 457 Plan will no longer be managed by Empower. You will need to establish a process for employees to enroll in the 457 Plan and make changes to their deferral elections directly with the employer. Your team will no longer have to wait for the 457 Deferral Feedback File through STARS. Instead, you will be able to receive and apply the changes as soon as they are received. The final 457 Deferral feedback file will be made available in December 2026.
If you do not currently offer the PERAPlus 457 Plan
Beginning January 1, 2027, your employees will have access to both the PERAPlus 401(k) and 457 Plans. Your employees may participate in both plans, and each plan has its own separate contribution limit. Enrollment and deferral changes for the 457 Plan will no longer be performed through the Empower website and instead will originate through the employer, like the 401(k) Plan. You will need to establish processes for employees to enroll in the 457 Plan, change their deferral amount, and select whether contributions will be made on a pre-tax or Roth basis.
If you do not currently offer Roth options
The PERAPlus 457 Plan and Roth options will be added to employer STARS accounts on the January 1, 2027, implementation date. You will see a new 457 tab on the Contribution Reporting Dashboard, and the reporting file format will follow the same requirements used for the 401(k) Plan. Both 401(k) and 457 reporting will also include a Roth column for employees who select that option.
Help employees understand their options
Choosing how to save for retirement is a personal financial decision, and the available PERAPlus options have important differences.
Both the PERAPlus 401(k) and 457 Plans allow employees to save additional money for retirement, but there are differences in areas such as catch-up contributions, distribution options, and early withdrawal rules.
Both plans have the option to make traditional (pre-tax) contributions or Roth (post-tax) contributions. With the traditional option, money is contributed before taxes and distributions are taxed as ordinary income. Roth contributions are made on a post-tax basis, and qualified distributions may be tax-free if applicable requirements are met.
To help employees better understand these options, we have a side-by-side comparison of the PERAPlus 401(k) and 457 Plans, including both the pre-tax and Roth options.
Share the PERAPlus Plan Comparison with your employees
The PERAPlus 401(k) and 457 Plan Comparison provides employees with an easy-to-reference overview of key features of each option, including:
- How pre-tax and Roth contributions differ
- Available catch-up provisions
- How investment earnings are taxed
- Qualified distribution rules
- Events that may allow a distribution
- Early withdrawal considerations
- Required minimum distributions
- Loan provisions
- Rollover options and other plan features
Sample language you can use with your employees
You can customize and share the following language through an email, employee newsletter, or other internal communication channel.
Has 457 Plan and Roth
As a Colorado PERA member, you have access to the suite of retirement savings options including the PERAPlus 401(k) and 457 Plans. These plans also allow you to elect traditional (pre-tax) or Roth (post-tax) options. If you currently have a 457 Plan or are considering enrolling, the process for signing up and managing will change starting in 2027.
The PERAPlus 401(k) and 457 Plans have different features and rules that may be important when considering your retirement savings options.
Roth is an option for these plans that affects how the taxes will be treated on them. Traditional 401(k) and 457 contributions are made pre-tax, which means they are contributed before taxes are taken out of the contributions. When you take out payments in your retirement from your traditional 401(k) or 457 plan, taxes will be owed on the amounts. Roth is a post-tax plan where taxes are taken before the contributions are made. This results in tax-free withdrawals upon retirement.
To help you understand the differences, PERA has a side-by-side comparison of the available plans and contribution types.
Review the PERAPlus 401(k) and 457 Plan comparison to learn more about the differences between the plans, including contribution options, catch-up provisions, distribution rules, and other important features.
Additionally, the enrollment and deferral change process for the PERAPlus 457 Plan is moving from Empower to our payroll system in January 2027! More information about how to enroll or make changes to your contributions will be provided by us. Starting December 2026, we will be accepting enrollments and deferral changes that are effective January 2027.
PERA offers live webinars and on-demand videos to help you learn more about your PERA benefits. You can register here: Webinar Registration – Zoom, or watch an On Demand Video here.
Has 457 Plan but not Roth
New PERAPlus savings options offered through Colorado PERA are coming January 1, 2027!
Beginning January 1, 2027, you will have additional options to save for your retirement the PERAPlus Plans.
For the PERAPlus 401(k) and 457 Plans, you will now be able to choose whether your contributions to either plan are made on a traditional pre-tax or Roth (post-tax) basis.
The PERAPlus 401(k) and 457 Plans have different features and rules that may be important when considering your retirement savings options. There are also tax implications for traditional pre-tax and Roth options that may be important to consider depending on your financial needs. To help you understand the differences, Colorado PERA has a side-by-side comparison of the available plans and contribution types.
Review the PERAPlus 401(k) and 457 Plan comparison to learn more about the differences between the plans, including contribution options, catch-up provisions, distribution rules, and other important features.
PERA offers live webinars and on demand videos to help you learn more about your PERA benefits. You can register here: Webinar Registration – Zoom, or watch an On Demand Video here.
Additionally, the enrollment and deferral change process for the PERAPlus 457 Plan is moving from Empower to our payroll system in January 2027! We will provide additional information about how to enroll and make changes to your contributions as it becomes available. Starting December 2026, we will be accepting enrollments and deferral changes that are effective January 2027.
Does not have 457 Plan or Roth
New PERAPlus savings options offered through Colorado PERA are coming January 1, 2027!
Beginning January 1, 2027, you will have additional options to save for your retirement through the PERAPlus Plans.
In addition to the PERAPlus 401(k) Plan, you will have access to the PERAPlus 457 Plan. You will also be able to choose whether your contributions to either plan are made on a traditional pre-tax or Roth (post-tax) basis.
The PERAPlus 401(k) and 457 Plans have different features and rules that may be important when considering your retirement savings options. To help you understand the differences, Colorado PERA has a side-by-side comparison of the available plans and contribution types.
Review the PERAPlus 401(k) and 457 Plan comparison to learn more about the differences between the plans, including contribution options, catch-up provisions, distribution rules, and other important features.
PERA offers live webinars and on-demand videos to help you learn more about your PERA benefits. You can register here: Webinar Registration – Zoom or watch an On Demand Video here.
We will provide additional information about how to enroll and make changes to your contributions as it becomes available.
Has Roth but not 457 Plan
New PERAPlus savings options offered through Colorado PERA are coming January 1, 2027!
Beginning January 1, 2027, you will have additional options to save for your future through the PERAPlus Plans.
In addition to the PERAPlus 401(k) Plan, you will have access to the PERAPlus 457 Plan. You will also be able to choose whether your contributions to either plan are made on a traditional pre-tax or Roth (post-tax) basis.
The PERAPlus 401(k) and 457 Plans have different features and rules that may be important when considering your retirement savings options. To help you understand the differences, Colorado PERA has a side-by-side comparison of the available plans and contribution types.
Review the PERAPlus 401(k) and 457 Plan comparison to learn more about the differences between the plans, including contribution options, catch-up provisions, distribution rules, and other important features.
PERA offers live webinars and on-demand videos to help you learn more about your PERA benefits. You can register here: Webinar Registration – Zoom or watch an On Demand Video here. If you would like to participate in the PERAPlus 457 Plan, you will be able to start contributing to this plan effective January 1, 2027.
We will provide additional information about how to enroll and make changes to your contributions as it becomes available.
How to use these resources
We encourage you to use these resources as part of your employee communication plan leading up to the January 1, 2027, implementation date.
Here are a few ways you can share the information:
- Add the comparison to your employee benefits resources.
- Post the comparison on your benefits or employee intranet page so employees can access it when considering their PERAPlus options.
- Send it as part of an employee announcement.
- Use the sample language above as a starting point for an email announcing the new options.
- Share it during open enrollment or benefits education.
- If your organization provides benefits education sessions or other employee meetings, include the comparison as a reference resource.
- Use it when answering employee questions.
- The comparison can help employees understand some of the key differences between the 401(k), 457, pre-tax, and Roth options. Employees should consider their individual circumstances when making decisions about their retirement savings.
- Customize the enrollment information.
- As your organization establishes its process for 457 enrollment and contribution changes, add your specific instructions to employee communications, so staff understand how to make or update their elections.
Start preparing now
Although the new requirements do not take effect until January 1, 2027, now is a good time to begin planning how you will administer the new options and communicate them to your employees. Employers will need processes in place to allow employees to enroll in the 457 Plan, make deferral changes, and select between pre-tax and Roth contributions.
Colorado PERA will continue to provide information and resources to help employers prepare for implementation. In the meantime, you can begin incorporating the PERAPlus Plan Comparison and employee communication resources into your planning. If you missed the live Preparing for HB26 – 1026 webinar, you can watch a recording by clicking this link.
For any questions related to HB 26-1026, please reach out to your employer representative or contact the employer relations team at employerrelations@copera.org or 303-863-3724.
