Legislative Update for Employers

The 2022 legislative session ran from January 12 to May 11, and three bills affecting Colorado PERA employers were signed into law.

• HB22-1057: PERA Employment After Teacher Retirement
• HB22-1087: Special District Director Retirement Benefits
• HB22-1101: PERA Service Retiree Employment in Rural Schools

For a summary of each bill, and to go more in-depth on legislation related to PERA, be sure to check out PERA On The Issues and subscribe to the biweekly newsletter.

The Colorado General Assembly is responsible for setting PERA contribution rates and benefit levels, while the PERA Board is responsible for overseeing PERA’s investments and the administration of benefits. Read more about the legislative process related to PERA.

Working After Retirement Legislative Changes

The Colorado Legislature recently passed two bills which impact the working after retirement limits for retirees who return to work for a PERA-affiliated employer.

HB22-1057 temporarily waives the working after retirement limits for licensed teachers who return as substitute teachers in any school district that declares a critical shortage of substitute teachers.

• This bill was signed by Governor Polis on March 17, 2022, and became effective on that date. This law sunsets (i.e., expires) July 1, 2025.

HB22-1101 expanded the existing critical shortage provision for rural school districts by adding BOCES and charter schools within the rural districts as employers who are eligible to designate critical shortage retirees. 

• HB22-1101 also added school nurses and paraprofessionals as positions eligible for critical shortage (in addition to teachers, bus drivers, and food service workers).
• This bill was signed by Governor Polis on March 17, 2022, and became effective on that date. This law removes the sunset date making this provision effectively permanent.

Click here to review a comparison of all three critical shortage provisions:

PERA and Bank Holidays Remaining for 2022

Contribution reports and payments are due within five business days of payment to employees, excluding holidays. The following is a list of the remaining bank/Colorado PERA holidays for 2022:

• Monday, May 30 - Memorial Day
• Monday, June 20 - Juneteenth (observed)
• Monday, July 4 - Independence Day
• Monday, September 5 - Labor Day
• Monday, October 10 - Columbus Day (U.S. Bank Holiday Only)
• Friday, November 11 - Veterans Day (U.S. Bank Holiday Only)
• Thursday, November 24 - Thanksgiving
• Friday, November 25 - Day after Thanksgiving (PERA Holiday Only)
• Monday, December 26 – Christmas Day (observed)

New Employer and Member Contribution Rates July 1, 2022

New rates apply to all PERA contribution files submitted with a pay period end date in July 2022.

 Member Contributions

Employer Contributions

Rates for the State, both Safety Officer groups, and Local Government includes the 2022 DC Supplement; rates for both Judicial groups includes the 2022 AED and SAED escalations and expiration of 2020 rate swap; actual DPS employer rate will be subject to the PCOPS offset. Please see copera.org for more information on contribution rates.

Reminder of IRS Limits for 2022

The IRS has announced new contribution/distribution limits for 2022.

• The employee contribution limits to 401(k) and 457 plans will increase to $20,500 in 2022 from $19,500 in 2021; the catch-up contributions for those over 50 will remain at $6,500 in 2022.
• The § 415 limit for benefit payments from a DB plan like PERA’s will increase to $245,000 in 2022 from $230,000 in 2021.
• The § 401(a)(17) limit for salary to be eligible to be reported to PERA for members who started on/after January 1, 1996, will increase to $305,000 in 2022 from $290,000 in 2021.

Includable Salary: Settlement Agreements

PERA employers frequently inquire about how to determine if PERA contributions should be submitted on payments arising out of settlement and severance agreements. Here are some tips to assist you in reviewing these situations:

In order for a payment from a settlement/severance agreement to be considered PERA-includable salary, the following criteria must be met:

• The payment must be compensation for past services rendered.
• The settlement, order or award for back wages must outline the period for which it applies.
• The payment amount cannot be greater than the rate of pay the member would have received had he or she been employed with the employee and/or paid at the time services were provided.

We realize that many of these agreements can be very detailed and contain confidential information. PERA will be happy to review only the compensation sections of these agreements to assist you to in determining whether contributions should be submitted. Please work with your Employer Representative in these situations.

File Submission Tips for 401(k) and 457 Files

When setting up your WIRE or ACH payments for 401(k) and 457 files, remember that the amount submitted must match the amount which PERA’s CORE system calculates.

PERA calculates Summary Sheet totals based on numbers provided in the detail files submitted.

Each payroll cycle, both steps of the contribution reporting process should be completed as follows:

1) Upload the detail file via the contribution reporting dashboard in STARS

• An overview of the process can be found in the PERA Employer Quick Start Guide for 401(k) and 457 Contribution Reporting and Adjustments.
• Detailed instructions can be found on pages 5 – 11 of our PERA Employer Contribution Reporting and Adjustments manual.

2) Set up the Summary Sheet via the contribution reporting dashboard in STARS

• Please log in to STARS, navigate to the currently “in-progress” 401(k) contribution report through the contribution reporting dashboard, and select the blue “view/print summary (set up payment)” link to submit the summary sheet and schedule the ACH payment.
• An overview of the process can be found in the PERA Employer Quick Start Guide for 401(k) and 457 Contribution Reporting and Adjustments.
• Detailed instructions can be found on pages 12 – 20 of our PERA Employer Contribution Reporting and Adjustments manual.

Life Insurance Open Enrollment Ends May 31, 2022

You may already offer your employees life insurance, but PERA’s program offers low-cost, term life insurance that can supplement existing coverage and be carried into retirement.

Unum administers the program, and offers a decreasing term life insurance policy. More information can be found at https://www.copera.org/life-insurance-open-enrollment.

Perks of the Unum policy:

• Premiums start as low as $7.75 per month
• Guaranteed coverage if your employees enroll during the annual open enrollment period April 1 – May 31
• Automatic enrollment for eligible dependents, at no additional cost

If your employees enroll they can elect to have their premiums deducted from their paycheck. In that case Unum will send you a notification to begin those deductions and will let you know what the monthly premium is for each employee. Premiums are then passed to PERA via your regular contribution reporting process, and PERA forwards those funds to Unum on your behalf.

PERA Imposters: Be Sure it’s PERA

Recently, Colorado PERA has been notified by several PERA employers who have received email solicitations by groups who appear to be associated with PERA. PERA does not work with or endorse any external vendors for financial planning services.

The following are some common tactics used by outside organizations in an attempt to convince employees that they are talking to PERA:

1. Include offers of consultations or complimentary reports about individual retirement benefits or expected income from PERA in retirement.
2. Include several references to PERA in the offer or email.
3. Use of the same acronym or similar name as PERA.

If the email does not have the PERA logo or address, it is not from PERA. If there is a logo of a financial company other than PERA, please advise employees that they are not dealing with PERA representatives.

While PERA may make “cold calls” in an attempt to encourage an employee to enroll in a program or to change coverage, we will not try to sell supplemental products. We also occasionally call members inviting them to join telephone town hall meetings, but these meetings are informational only—no products are sold.

PERA is the best source for information related to a PERA account, and we charge no fees or commissions. PERA offers individual counseling for members to discuss any issue related to their PERA account and we also encourage members to meet with trusted financial advisers who are aware of their unique financial situations and goals.

If you have questions regarding the source or authenticity of any communication material you or your employees have received, please get in touch with your PERA Employer Representative.

Employer Tip: True Termination of Employment

Termination of employment is a critical component of retirement.

• There must be a bona fide separation of service that is a distributable event required by Title 26, 401(a) of the Internal Revenue Code (IRC), PERA plan documents, and the state law governing PERA.
• The member must terminate service from all PERA employers.
• This termination must be an actual severance of the employer/employee relationship and the termination date is considered legally binding.
• Failure to completely sever the employer/employee relationship will cause an individual to be ineligible for retirement.
• All benefits paid to an individual who was ineligible for retirement must be paid back to PERA promptly upon discovery.

Report Reminders for Retirement Season

1. Complete the Final Six Months' Salary Report only when you can accurately certify employees' final pay.
2. Only list PERA-includable salary on the Report. If you need assistance in determining if your salary is PERA-includable, please contact your Employer Representative.

As always, we appreciate your assistance during this busy time of year. We understand that this process can be very time consuming, which is why PERA is currently working on streamlining the submission of this information. Our goal is to have these changes fully implemented by retirement season 2023.

New Faces on the Employer Relations Team

PERA’s Employer Relations recently welcomed two new members to the team: Greta King and Mei Chiang.

Greta joined PERA last November and previously worked with a portfolio of Sprint business and government customers with accounts ranging from 25 to 2,000 lines. In her free time, she sings with an a cappella choir, acts in a murder mystery show, and enjoys bicycling around Denver and camping in the mountains.

Mei recently moved from PERA’s Customer Service Division to join the Employer Relations Team, and was previously an Assistant Store Manager for Dick’s Sporting Goods. Outside of work, Mei enjoys macramé, cooking, hiking, and reading. She notes that she is easily motivated by the promise of food.

Employer Relations Team