The following are some frequently asked questions by inactive Colorado PERA members. If you have additional questions, don’t hesitate to give us a call us at 1-800-759-7372. We’re always happy to help.
What is PERA?
PERA provides its members with a lifetime monthly benefit, sometimes called a pension. Members work for affiliated employers throughout Colorado and during their employment contribute a fixed percentage of salary to PERA. Employers also contribute a percentage of payroll. When members reach retirement eligibility, they can apply to receive a monthly benefit.
When can I retire? How much will my monthly benefit be?
When you can retire depends on your age, the number of years of PERA service you have, and which benefit structure you’re under—PERA or Denver Public Schools (DPS). The amount of your benefit is based on your number of years of service and a percentage of your Highest Average Salary (HAS). You can use the online calculators get numbers based on your specific situation.
Are there any tax consequences of refunding my PERA account?
You will pay a 10 percent penalty to the IRS if you take a refund before you reach age 59½. Unless you do a direct rollover of your refund into another tax-deferred plan, your refund will also be subject to federal and state income tax.
What if I decide to refund my account, but then someday go back to work covered by PERA?
You can purchase back the service credit you earned during your previous employment period. However, once you refund, you will never be entitled to the benefit provisions associated with your previous membership, like retirement eligibility date and benefit calculation. Furthermore, purchasing service credit will not:
- Increase your earned service, which could affect when you’ll retire.
- Be used in determining your HAS, which could affect the amount of your monthly retirement benefit.
- Count toward eligibility for the PERA Disability Program.
Will taking a refund of my account help me avoid the WEP/GPO Social Security benefit reductions?
Not necessarily. Many refunds include a match on your employer’s contributions and interest earned on those contributions. Receiving a match means you will still be subject to WEP/GPO. You will receive a match in the following situations:
PERA Benefit Structure
- If you are eligible for retirement, you will receive a 100 percent match.
- If you are not eligible for retirement but have five years of earned service credit, you will receive a 50 percent match.
- If you do not have five years of earned service credit, you will receive a 50 percent match only on contributions and interest received on or before December 31, 2010.
DPS Benefit Structure
- If you are eligible for retirement, are an inactive member who terminated employment on or after January 1, 2001, and you have five years of service credit, you will receive a 100 percent match.