You and your employer contribute a percentage of your monthly salary to your PERA Defined Benefit (DB) Plan account. Colorado state law, C.R.S. § 24-51-101(42)(a) and PERA Rule 1.20F, define the salary that is subject to PERA contributions. PERA-includable salary is then used in determining your Highest Average Salary (HAS) for purposes of calculating your retirement benefit.
PERA-includable salary is compensation for services rendered to an employer and includes:
- Regular salary or pay
- Any pay for administrative, sabbatical, annual, sick, vacation, or personal leave
- Compensation for unused leave converted to cash payments
- Pay for compensatory time or holidays
- Payments by an employer from grants
- Amounts deducted from pay pursuant to tax-sheltered savings or retirement programs
- Amounts deducted from pay for a health savings account as defined in 26 U.S.C. Sec. 223, as amended, or any other type of retirement health savings account program
- Performance or merit payments, if approved by the Board
- Special pay for work-related injuries paid by the employer prior to termination of membership
- Retroactive salary payments pursuant to court orders, arbitration awards, or litigation and grievance settlements
- Cash payments made in lieu of fringe benefits that meet the requirements in Rule 1.20F(2)
- One-time payments that meet the requirements in Rule 1.20F(7)
- Contributions made under an Internal Revenue Code Section 125 or 132 plan for members who began membership on or after July 1, 2019.
PERA-includable salary does not include:
- Compensation for unused sick, annual, vacation, administrative, or other accumulated paid leave contributed to a health savings account as defined in 26 U.S.C. Sec. 223, as amended, or a retirement health savings program
- Housing allowances
- Uniform allowances
- Automobile usage
- Insurance premiums
- Dependent care assistance
- Reimbursement for expenses incurred
- Tuition or any other fringe benefits, regardless of federal taxation
- Bonuses for services not actually rendered, including, but not limited to, early retirement inducements, Christmas bonuses, cash awards, honorariums and severance pay, damages, except for retroactive salary payments paid pursuant to court orders or arbitration awards or litigation and grievance settlements, or payments beyond the date of a member’s death.
- Contributions made under an Internal Revenue Code Section 125 or 132 plan for members who began membership on or before June 30, 2019.