In late 2016, the Colorado PERA Board of Trustees made the following actuarial assumption changes:
- Reduced the long-term inflation expectation to 2.4 percent from 2.8 percent and reduced the long-term investment return assumption to 7.25 percent from 7.5 percent.
- Adopted new mortality tables that more accurately reflect the actual experience of the PERA membership.
Additionally, PERA will develop a solution to address the changing demographics in the Judicial Division.
PERA regularly conducts a review of demographic assumptions and as part of its ongoing review of economic assumptions, the Board heard long-term investment return projections from nationally renowned financial investment professionals.
The assumption changes will lengthen the time it will take for PERA to reach 100 percent funding—a goal of 2010’s Senate Bill 1. Additionally, members will be affected by changes in the following four areas:
Ongoing Monthly Payments
The factors changed that are used to calculate a benefit if you retire after January 1, 2017, and choose an option that provides an ongoing monthly payment to a loved one following your death.
Money Purchase Calculation
The factors changed that are used in the money purchase benefit calculation. Generally this only applies to members in the PERA benefit structure who have less than five years of service credit at retirement.
Reduced Service Retirement
Changes were made to the percentage of salary used to calculate benefits for members who were not eligible to retire as of January 1, 2011. The percentages only change for members who will retire with a reduced service benefit, shown in the shaded areas of the Highest Average Salary (HAS) tables.
Purchasing Service Credit
The cost to purchase service credit changed for purchase agreements issued after January 1, 2017.
These four changes only apply if you retire or request to purchase service credit after the new assumptions went into effect on January 1, 2017. Benefits to current retirees and current purchase payments will stay the same and not change.