Actuarial Valuation—Financial Reporting

July 7, 2017

The actuarial valuation performed for financial reporting purposes is prepared in accordance with governmental accounting standards which became effective for PERA for the year ended December 31, 2014. 

Liabilities and other pension-related amounts calculated under this standard emphasize the costs incurred by PERA-affiliated employers for providing pensions to their employees as part of the employment-exchange process. These amounts are required by governmental accounting standards to be disclosed on the financial statements of PERA-affiliated employers.

Assets are required to be stated at fair value and the liability, referred to as the net pension liability, is determined using a consistent, standardized methodology, which allows for transparency and the comparability of pension-related amounts across U.S. governmental defined benefit pension systems.

The tables to the right contain a summary of the results of the actuarial valuations for financial reporting purposes. The net pension liability of $50.8 billion for the Division Trust Funds is $18.6 billion higher than the unfunded actuarial accrued liability calculated for purposes of funding PERA. This difference can mainly be attributed to a provision of governmental accounting standards which requires that a lower rate be used to value pension liabilities in certain circumstances.

Status of Colorado PERA1

As of December 31, 2016

Trust Fund Ratio of Fiduciary Net Position to
Total Pension Liability
State Division 42.6%
School Division 43.1%
Local Government Division 73.6%
Judicial Division 53.2%
Denver Public Schools Division 74.0%

1  Results reflect revised actuarial assumptions adopted by the Board in 2016.

More information about the actuarial valuation for financial reporting purposes for pensions can be found in the Financial Section of PERA’s CAFR.

Components of Net Pension Liability1

Division Trust Funds2 12/31/2015  12/31/20163
Total pension liability $70.6 billion4 $94.2 billion5
Fiduciary net position $42.7 billion $43.4 billion
Net pension liability $27.9 billion $50.8 billion
Fiduciary net position as a percentage total pension liability 60.4% 46.0%

1  Based on the actuarial valuations performed for financial reporting purposes.

2 The data in this table is aggregated for informational purposes. The assets of each trust fund are for the sole purpose of its members and cannot be used by another fund. 

3  Based on revised actuarial assumptions adopted by the Board in 2016.

4  The rates used to discount the liabilities were 7.50 percent for the State, School, Local Government, and DPS Divisions and 5.73 percent for the Judicial Division.

5 The rates used to discount the liabilities were 7.25 percent for the Local Government and DPS Divisions; 5.26 percent for the State and School Divisions; and 5.18 percent for the Judicial Division