Public Employees' Retirement Association True-up of Denver Public Schools Division Employer Contribution
In 2009, the general assembly enacted legislation to merge the Denver public schools retirement system into the public employees' retirement association (PERA), effective January 1, 2010. The merger legislation created a Denver public schools (DPS) division within PERA and set the employer and member contribution rates for that division. The merger legislation also required PERA to calculate a true-up beginning January 1, 2015, and every fifth year thereafter, to determine whether the DPS employer contribution rate must be adjusted to assure the equalization of the DPS division's ratio of unfunded actuarial accrued liability over payroll to the PERA school division's ratio of unfunded actuarial accrued liability over payroll at the end of the 30-year period that began on January 1, 2010 (equalization of the 2 divisions). If necessary, the PERA board is required to recommend that the general assembly adjust the DPS total employer contribution rate to assure the equalization of the 2 divisions.
In furtherance of the true-up for the equalization of the 2 divisions, beginning on July 1, 2025, the bill reduces the total employer contribution rate for the DPS division from 10.4% to 7.4% of salary. The bill does not alter the employer or member contribution rate for any other division of PERA.
- Reduces the percentage of salary that is allocated to the DPS division health care trust fund from 1.02% of member salaries to .20% of member salaries, which will allow PERA to apply the remaining .82% of the allocation to pension liabilities;
- For 5 years beginning July 1, 2025, excludes the DPS division from the annual allocation of the money that is directly distributed to PERA by the general assembly; and
- For 5 years beginning July 1, 2025, removes the DPS division from the calculation that PERA uses to determine whether an automatic adjustment to member and employer contribution rates and annual increase amounts will occur pursuant to current law.
(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)