PRESENTED BY KIRSTEN LOPKOFF

PLANNING WITH PERA

Septe

mber

2019

» Intro to plan

» Plan choice

» Financials

» Benefits before retirement

• Survivor

• Disability

• Life insurance

• PERAPlus

» Benefits after retirement

• Lifetime benefit

• Options

• Health care

• Annual increase

• Working after retirement

What We’ll CoverBIM

Colorado PERA

Defined Benefit Plan

Stable benefit payments to over

121,000 retired public employees

Defined Contribution

Plan

Choice available to State and Local

Government employees

Voluntary

Investment

Program

PERAPlus 401(k)

and 457 Plans

Health

Benefits

Program

Active and retired

member coverage

Founded in 1931 to address the retirement

needs of the public sector, PERA is a retirement plan that

serves as a replacement for Social Security.

3

Plan choices

PERA

DB Plan

PERA

DC Plan

State of Colorado, Higher Ed, Local Government Employers

One-time

transfer

School Districts and other Employers

PERA

DB Plan

Contributions (members and employers)

Income from investment portfolio

Monthly benefits paid to retirees

Administration expenses

=

=

=

=

C

I

B

E

PERA Basic Equation

C I B E

CAFR Digital Snapshot

6

Before Retirement Benefits

Survivor Benefits

Survivor benefits provide monthly benefits to qualified survivors of deceased PERA benefit

structure members

Employer-Funded Benefit

Payment Order

Qualified Survivors

• Active Members

• Retirement Eligible

1. Cobeneficiary (if one has been chosen by member)

2. Spouse

3. Dependent children

4. Disabled adult children

5. Dependent parents

Qualified Survivors

• Active Members

• Not Retirement Eligible

• 1+ Year of Service

1. Dependent children

2. Spouse

3. Disabled adult children

4. Dependent parents

No Qualified Survivors

• Less than 1 Year of Service

Named beneficiary receives single lump-sum payment of

member contributions plus interest and 100% match

Disability Program

» Requires five years earned service credit, including six months

earned during current membership period

» PERA determines eligibility to apply

» Unum determines medical eligibility and administers program

» Program provides

• Short-term disability insurance

• Disability retirement

» Must submit application within 90 days of terminating

employment

Employer-Funded Benefit

Life Insurance

Tier 1Active: $7.75 per month

Retirees: $10.28 per month

Age Coverage

40-44 $40,000

70-74 $3,500

80-84 $2,250

10

Tier 4Active: $31.00 per month

Retirees: $41.12 per month

Age Coverage

40-44 $160,000

70-74 $14,000

80-84 $9,000

» PERA offers life insurance you can buy in addition to your employer plan

» Benefits include:

• Guaranteed issue: no health questions or exams required if you enroll

within 90 days of your initial eligibility or during annual enrollment

• Accidental Death and Dismemberment benefit

• Coverage you can keep in retirement

• Eligible dependents are automatically enrolled at no additional cost

PERAPlus 401(k) and 457 Plans

401(k) Plan 457 Plan

Eligibility Any employee of a

PERA employer

Any employee of a PERAPlus

457-affiliated employer

Contributions Traditional and Roth contributions available

Investment Options Ten PERAdvantage Target Retirement Date funds

Six PERAdvantage asset class-based funds

PERAdvantage SRI Fund

Self-Directed Brokerage Account

Daily valuation; daily changes permitted

Advice Online Advice (no additional fee)

Professional Manager (additional fee)

Recordkeeper Voya Financial

Contact www.copera.org

1-800-759-7372 (select PERAPlus option)

** Special catch-up also available in 457 Plan for three years prior to normal retirement age

** Employer must adopt the Roth option in order for employees to make Roth contributions

Visit the PERAPlus Plan websites, accessible

through www.copera.org, for the most current

costs

Or from $0.80 to $3.00

per $1,000 per year

The PERAPlus Plans are

Cost-Efficient

0.08% to 0.30%

for each of the individual

PERAdvantage Funds

After Retirement Benefits

Lifetime Benefit Calculation

Age Service Credit

Colorado PERA

Date December 31, 2018

Pay to the order of Jane Doe $2,523.00

Ron Baker

Colorado PERA Executive Director

Two-thousand five-hundred and twenty-three Dollars

Highest Average Salary

50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65+

5 7.9 8.6 9.5 10.4 11.4 12.5

6 9.5 10.4 11.4 12.4 13.7 15.0

7 11.1 12.1 13.2 14.5 15.9 17.5

8 12.7 13.8 15.1 16.6 18.2 20.0

9 14.2 15.6 17.0 18.7 20.5 22.5

10 15.8 17.3 18.9 20.7 22.8 25.0

11 18.3 19.0 20.8 22.8 25.0 27.5

12 20.9 21.8 22.7 24.9 27.3 30.0

13 23.7 24.7 25.8 27.0 29.6 32.5

14 26.7 27.9 29.1 30.5 31.9 35.0

15 30.0 31.3 32.7 34.2 35.8 37.5

16 33.4 35.0 36.5 38.2 40.0 40.0

17 37.2 38.8 40.6 42.5 42.5 42.5

18 41.2 43.1 45.0 45.0 45.0 45.0

19 45.5 47.5 47.5 47.5 47.5 47.5

20 40.5 42.2 44.0 45.8 47.9 50.0 50.0 50.0 50.0 50.0 50.0

21 44.3 46.2 48.2 50.3 52.5 52.5 52.5 52.5 52.5 52.5 52.5

22 48.5 50.5 52.7 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0

23 52.9 55.2 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5

24 57.6 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0

25 41.5 45.0 48.8 52.9 57.5 62.5 62.5 62.5 62.5 62.5 62.5 62.5 62.5 62.5 62.5 62.5

26 46.9 46.8 50.7 55.1 59.8 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0

27 52.9 52.8 52.7 57.2 62.1 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5

28 59.5 59.5 59.4 59.3 64.4 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0

29 66.9 66.8 66.8 66.8 66.7 72.5 72.5 72.5 72.5 72.5 72.5 72.5 72.5 72.5 72.5 72.5

30 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0

31 77.5 77.5 77.5 77.5 77.5 77.5 77.5 77.5 77.5 77.5 77.5 77.5 77.5 77.5 77.5 77.5

32 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0

33 82.5 82.5 82.5 82.5 82.5 82.5 82.5 82.5 82.5 82.5 82.5 82.5 82.5 82.5 82.5 82.5

34 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0

Age at Retirement

Years

of

Serv

ice

Add 2.5% to

87.5 for each

year over 35

up to 100%

Reduced

Retirement

(Shaded Area)

Service Retirement

No benefits payable

Effective July 1, 2019

Benefit Table 2

Benefit Options 1

Option 1

Single-Life Benefit

Option 2

Joint-Life Benefit

Option 3

Joint-Life Benefit

* A PERA benefit structure cobeneficiary receives annual increases and health care

subsidy after retiree’s death

Maximum benefit amount

Paid for retiree’s lifetime only

Reduction of Option 1 benefit amount

Upon your death, cobeneficiary* receives

half of your benefit

Further reduction of Option 1 benefit amount

Upon your death, cobeneficiary* receives

same amount

Refund (Lump Sum)

Retirement eligible

Contributions, interest,

100% match

Not retirement eligible

Contributions, interest, and

match, if applicable

PERA Benefit Payment

Monthly Lifetime Benefit

Defined benefit calculation

Money purchase calculation

Choice of:

Refunds may be subject to taxes and tax penalty

2020 PERACare Health Benefits

Anthem Kaiser

Deductible HMO X

HDHP X

PPO 1 X

PPO 2 X

Medicare Plans X X

PERACare Subsidy

» Reduces PERACare medical insurance premiums, based upon

years of service credit, up to 20 years

Pre-Medicare $230

Medicare $115

Cobeneficiary Same

* Pro-rated for <20 years of service credit. Both earned and purchased service

credit is included

PERACare Subsidy (20+ Years of Service Credit)*

Annual Increase

» There is a waiting period of 36 months before you are eligible

» Paid in July

» AI is subject to change

» Additional details can be found on the Annual Increase fact sheet

Working After Retirement for

a PERA Employer

RequiredContributions

Returning to Work

Working After Retirement Limits**

(Each calendar year)

* School districts and higher education may designate up to 10 retirees to work up

to 140 days or 916 hours per calendar year

** Certain positions at rural school districts may be exempt

Employer contribution, AED, and SAED

Working retiree contribution

Cannot work on effective date of retirement

Cannot work on first business day of month

Work in month in which retirement was

effective results in a 5% reduction to one

month’s benefit per day worked

≤ 4 hours per day; up to 720 hours

4+ hours per day; up to 110 days*

No limit to work for a non-PERA employer

Survey

» Please take a moment to give us your feedback on this presentation.

» Scan this QR code on your smartphone to take our survey.

Stay Informed

Website

copera.or

g

Twitter

@coloradoper

a

Auto Adjust Video

bit.ly/2FO3AJf

Blog

peraontheissues.co

m

BLOG

YouTube Channel

Colorado PERA

Digital Financial Snapshot

copera.org/snapshot

Thank you!

24

Appendix

Helpful PERA Calculators

» Highest Average Salary

» PERA Monthly Retirement Benefit

» Purchasing Service Credit

» PERACare Premium Inquiry

for Retirees

» PERA Retirement Planner

» Benefit Tax Estimate

Windfall Elimination

Provision (WEP)

Years of

Substantial

Earnings

10–20 years 21–29 years 30 or more

years

Reduction Full WEP

reduction

Proportional

reduction per

year

No reduction

Dental and Vision Plans

Dental Plans Cigna Delta

HMO X

PPO X X

Vision Plans VSP

PPO #1 X

PPO #2 X

PPO #3 X

Four Components

Employer Contributions

Employee Contributions

Annual Increase

Direct Distribution

June 2019 July 1, 2020

Financial report indicates

PERA is behind schedule and

adjustments are needed

Implement

adjustments

Process

occurs again

Automatic Adjustment Provision

Annually

Automatic Adjustment Provision

Decrease AI percentage by up to 0.25% in one year, not to

fall below 0.5%

Increase employer contributions by up to 0.5% in one year,

not to exceed an additional 2%

Increase member contributions by up to 0.5% in one year,

not to exceed an additional 2%

Increase the direct distribution from the State budget by up

to $20 million in one year, not to exceed $225 million

FULLY FUNDED BY 2047

Automatic Adjustment Provision

Decrease Annual

Increase percentage

not to fall below .5%

Increase employer

contributions not to

exceed 2%

Increase member

contributions not to

exceed 2%

Increase the $225

million direct

distribution but not

to exceed that

amount (must have

been previously

reduced)

Increase Annual

Increase percentage

not to exceed 2%

Decrease employer

contributions not to fall

below 2017 levels

Decrease member

contributions not to fall

below 2017 levels

Decrease the

$225 million direct

distribution from the

State budget

BEHIND SCHEDULE AHEAD OF SCHEDULECLOSED

30-YEAR

FUNDING

PERIOD

31

Fu

nd

ed

Rati

o %

Year Beginning

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048

State Division School Division

Local Government Division Judicial Division

DPS Division

State

School

Local

Government

Post SB 200 Funding Levels

Judicial

DPS

30-year projection of funded ratio on actuarial asset value based on December 31, 2017, valuation results

Full Funding Projected

in Every Division within

30 Years

32