House Bill 25-1105 Engrossed

A Bill for an Act

• Page 1, Line 101Concerning an adjustment to the total employer

• Page 1, Line 102contribution rate of the Denver public school division

• Page 1, Line 103of the public employees' retirement association in

• Page 1, Line 104connection with the equalization status of the

• Page 1, Line 105association's Denver public schools division with the

• Page 1, Line 106association's school division as required by the merger

• Page 1, Line 107of the Denver public schools retirement system with

• Page 1, Line 108the association.

Bill Summary

(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)

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.

• Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:

• Page 2, Line 2SECTION 1.  In Colorado Revised Statutes, 24-51-401, add (1.7)(a)(V) as follows:

• Page 2, Line 324-51-401.  Employer and member contributions.

• Page 2, Line 4(1.7) (a) (V)  Effective July 1, 2025, subject to section 24-51-413,

• Page 2, Line 5the employer and member contribution rates shall be based upon

• Page 2, Line 6the rates for the appropriate division as set forth in the

• Page 2, Line 7following table multiplied by the salary, as defined in section

• Page 2, Line 824-51-101 (42), paid to members and retirees for the payroll period:

• Page 2, Line 9TABLE E

• CONTRIBUTION RATES

• Page 2, Line 10DivisionMembershipEmployer RateMember Rate

• State All Members10.4%10.0%

• Page 3, Line 1    Except

•     State Troopers13.1%12.0%

• Page 3, Line 2School All Members10.4%10.0%

• Local

• Page 3, Line 3Government All Members10.0%8.0%

• Judicial All Members13.91%10.0%

• Page 3, Line 4DPS All Members7.4%10.0%

• Page 3, Line 5SECTION 2.  In Colorado Revised Statutes, 24-51-208, amend (1) introductory portion and (1)(f.5) as follows:

• Page 3, Line 624-51-208.  Allocation of moneys. (1)  The moneys money of the

• Page 3, Line 7association shall be divided into several trust funds, including, but not limited to:

• Page 3, Line 8(f.5)  The Denver public schools division health care trust fund,

• Page 3, Line 9created pursuant to the provisions of section 24-51-1201 (2), which

• Page 3, Line 10consists of a portion of the employer contributions equal to one and two

• Page 3, Line 11one-hundredths two-tenths of one percent of member salaries; a

• Page 3, Line 12portion of the amount paid by members to purchase service credit relating

• Page 3, Line 13to noncovered employment as determined pursuant to section 24-51-505

• Page 3, Line 14(7); deductions of premium amounts from monthly benefits of

• Page 3, Line 15participating benefit recipients; premiums paid directly to the trust fund

• Page 3, Line 16by participating benefit recipients, members, and dependents; monthly

• Page 3, Line 17payments made by employers on behalf of participating benefit recipients,

• Page 3, Line 18members, and dependents; and interest; in addition to a proportional share of investment income earned thereon;

• Page 3, Line 19SECTION 3.  In Colorado Revised Statutes, 24-51-414, amend

• Page 3, Line 20(4) as follows:

• Page 4, Line 124-51-414.  Direct distribution. (4) (a)  Prior to July 1, 2030,

• Page 4, Line 2the association shall allocate the direct distribution to the trust funds of

• Page 4, Line 3each division of the association as it would an employer contribution, in

• Page 4, Line 4a manner that is proportionate to the annual payroll of each division as

• Page 4, Line 5reported to the association; except that the association shall not allocate

• Page 4, Line 6any portion of the direct distribution amount to the local government division or the Denver public schools division of the association.

• Page 4, Line 7(b)  Beginning July 1, 2030, the association shall allocate

• Page 4, Line 8the direct distribution to the trust funds of each division of the

• Page 4, Line 9association as it would an employer contribution, in a manner

• Page 4, Line 10that is proportionate to the annual payroll of each division as

• Page 4, Line 11reported to the association; except that the association shall

• Page 4, Line 12not allocate any portion of the direct distribution amount to the local government division.

• Page 4, Line 13SECTION 4.  In Colorado Revised Statutes, 24-51-413, amend (1)(a), (1)(b), (2), (3)(b), and (6)(b) as follows:

• Page 4, Line 1424-51-413.  Contribution and annual increase amount changes

• Page 4, Line 15- definitions. (1)  As used in this section, unless the context otherwise requires:

• Page 4, Line 16(a)  "Blended total contribution amount" means the weighted

• Page 4, Line 17average of the total amounts paid by the employer and the member to the

• Page 4, Line 18association for each of the five the state, school, local government,

• Page 4, Line 19and judicial divisions pursuant to sections 24-51-401 (1.7) and

• Page 4, Line 2024-51-411, and the amount the association receives pursuant to section

• Page 4, Line 2124-51-414, but shall not include the portion of the employer contribution

• Page 4, Line 22remitted to the health care trust fund pursuant to section 24-51-208 (1)(f)

• Page 4, Line 23and (1)(f.5) and the portion of the employer contribution remitted to the annual increase reserve.

• Page 5, Line 1(b)  "Blended total required contribution" means the weighted

• Page 5, Line 2average of the total of the association's reported actuarially determined

• Page 5, Line 3contribution rates and member contribution rates of the five state, school, local government, and judicial division trust funds.

• Page 5, Line 4(2)  Beginning July 1, 2019, and each July 1 thereafter, employer

• Page 5, Line 5contribution rates of the five divisions, member contribution rates,

• Page 5, Line 6annual increase amounts, and the direct distribution amount shall remain

• Page 5, Line 7unchanged until such time as changes are required pursuant to this section.

• Page 5, Line 8(3)  When the blended total contribution amount is less than

• Page 5, Line 9ninety-eight percent of the blended total required contribution, the following adjustment shall occur:

• Page 5, Line 10(b)  The employer contribution rate will be increased by up to

• Page 5, Line 11one-half of one percent, but at no time will the employer contribution rate

• Page 5, Line 12be increased to exceed the employer contribution rates under section 24-51-401 (1.7)(a)(II) section 24-51-401 (1.7)(a)(V), plus two percent;

• Page 5, Line 13(6)  When the blended total contribution amount is greater than or

• Page 5, Line 14equal to one hundred twenty percent of the blended total required contribution, the following adjustment shall occur:

• Page 5, Line 15(b)  The employer contribution rate will be reduced by up to

• Page 5, Line 16one-half of one percent, but at no time will the employer contribution rate

• Page 5, Line 17be less than the employer contribution rates under section 24-51-401

• Page 5, Line 18(1.7)(a)(I) for the state, school, local government, and judicial

• Page 5, Line 19divisions and the employer contribution rates under section 24-51-401 (1.7)(a)(V) for the Denver public schools division;

• Page 5, Line 20SECTION 5.  Effective date. This act takes effect July 1, 2025.

• Page 6, Line 1SECTION 6.  Safety clause. The general assembly finds,

• Page 6, Line 2determines, and declares that this act is necessary for the immediate

• Page 6, Line 3preservation of the public peace, health, or safety or for appropriations for

• Page 6, Line 4the support and maintenance of the departments of the state and state institutions.