Retirement Under the PERA Benefit Structure



*Colorado PERA’s Web pages have been updated to reflect changes as a result of the enactment of Senate Bill 10-001.*

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Retirement Under the PERA Benefit Structure

Benefit Eligibility

You are eligible to receive a monthly retirement benefit when you reach age 65 or meet the following age and service requirements listed below. Eligibility requirements for Judicial Division members are different; see the Your PERA Benefits insert for more information.

If you began PERA membership on or before June 30, 2005, and you have five years of service credit on January 1, 2011, the following age and service requirements apply:

PERA Benefit Structure-Service Retirement Benefit
Minimum Service Credit	Minimum Age
30 years	50
20 years	60
Any years	65

If you began PERA membership between July 1, 2005, and December 31, 2006, and you have five years of service credit on January 1, 2011, the following age and service requirements apply:

PERA Benefit Structure-Service Retirement Benefit
Minimum Service Credit	Minimum Age
35 years	Any age
30 years	55
20 years	60
Any years	65

If you began PERA membership on or before December 31, 2006, and you have less than five years of service credit on January 1, 2011, or if you began membership between January 1, 2007, and December 31, 2010, the following age and service requirements apply:

PERA Benefit Structure-Service Retirement Benefit
Minimum Service Credit	Minimum Age
35 years	Any age
30 years	55
25 years	60
Any years	65

Regardless of when you began PERA membership, the following age and service requirements apply for a reduced benefit:

PERA Benefit Structure-Reduced Retirement Benefit
Minimum Service Credit	Minimum Age
25 years	50
20 years	55
5 years	60

State Troopers/CBI Agents

As a State Trooper or CBI Agent, your eligibility requirements are based on when you reach age 65 or meet the age and service requirements as listed below.

The HAS percentages for reduced retirement for various years of service credit are shown in the shaded areas of the PERA Benefit Structure Highest Average Salary Percentages tables. On table 13, the shaded areas ensure that, as of your effective date of retirement, your reduced service retirement benefit is the actuarial equivalent of your full service retirement benefit. These percentages are subject to change based on actuarial experience. See the HAS Percentages Tables page.

State Troopers/CBI Agents-Service Retirement Benefit
Minimum Service Credit	Minimum Age
30 years	Any age
25 years	50
20 years	55
5 years	65

State Troopers/CBI Agents-Reduced Retirement Benefit
Minimum Service Credit	Minimum Age
20 years	50
5 years	60

Benefit Calculation

Provided you have at least five years of service credit, your retirement benefit is determined by the higher of a money purchase benefit calculation or a defined benefit calculation as explained below. If you are retirement eligible with less than five years of service credit, your benefit will be calculated using the money purchase benefit calculation.

Money Purchase Benefit Calculation

The money purchase calculation is determined by your life expectancy and the value of your account at the time you apply for retirement, plus a matching amount equal to 100 percent of contributions and interest.

Defined Benefit Calculation

The defined benefit calculation is based upon your years of service, age, and Highest Average Salary (HAS). If you meet the eligibility requirements for a service retirement, your defined benefit will be 2.5 percent of your HAS for each year of service credit up to 100 percent. The HAS percentages for reduced retirement for various years of service credit are shown in the shaded areas of the PERA Benefit Structure Highest Average Salary Percentages tables. On tables 2, 4, 6, and 7, the shaded areas ensure that, as of your effective date of retirement, your reduced service retirement benefit is the actuarial equivalent of your full service retirement benefit. These percentages are subject to change based on actuarial experience. See the HAS Percentages Tables page.

Benefit Options

When you apply for a monthly retirement benefit, you will choose one of the following benefit options listed below for payment of your benefit. If you do not choose an option, your benefit will be paid as an Option 1. If you choose Option 2 or 3, you will select a cobeneficiary who will receive a continuing monthly benefit after you die. Only one cobeneficiary may be chosen. In making your selection, you should consider your age, financial obligations, health, income from other sources, and needs of your spouse or other persons.

Cobeneficiary: The person you designate under the PERA benefit structure Options 2 and 3 to receive a continuing monthly benefit after your death. You may name only one cobeneficiary.

Named Beneficiary: The person(s) or entity you designate to receive a lump-sum payment of any remaining moneys credited after all monthly benefits have been paid.

Option 1:

This option provides you with a lifetime monthly benefit. Following your death, a single payment of any remaining balance in your member contribution account, plus a 100 percent match on the balance, will be made to your named beneficiary, or your estate if no named beneficiary exists. No further monthly benefits are payable.

Option 2:

This option provides you with a lifetime monthly benefit. Following your death, your cobeneficiary will receive a lifetime monthly benefit equal to one-half of the benefit you were receiving at the time of death. If there is an account balance after the death of your cobeneficiary, a single payment of any remaining balance in your member contribution account, plus a 100 percent match on the balance, will be made to your named beneficiary, or your estate if no named beneficiary exists. No further monthly benefits are payable.

Option 3:

This option provides you with a lifetime monthly benefit. Following your death, your cobeneficiary will receive a lifetime monthly benefit equal to the monthly benefit you were receiving at the time of death. If there is an account balance after the death of your cobeneficiary, a single payment of any remaining balance in your member contribution account, plus a 100 percent match on the balance, will be made to your named beneficiary, or your estate if no named beneficiary exists. No further monthly benefits are payable.

Option 1 benefits are calculated as described above. Benefits under Options 2 and 3 are calculated the same as Option 1, then reduced to pay for continuing monthly benefits to the person you select as your cobeneficiary. The factors used to calculate Options 2 or 3 benefits may change whenever actuarial assumptions are changed. If you select Option 2 or 3 and your cobeneficiary dies before you, your benefit will be changed to the Option 1 amount.

See Calculating a Retirement Benefit Under the PERA Benefit Structure for Option 1, 2, and 3 benefit calculation examples.

Factors That May Affect Your Benefit Amount

Furlough Days

Some Colorado PERA employers have required their employees to take furlough days (days off without pay). The reduction in your salary for these days off may lower the HAS used to calculate your retirement benefit.

If you had furlough days from July 1, 2002, to June 30, 2004, you may opt to make contributions on the amount that your salary was reduced. If you make up these optional contributions, in some cases, it may increase your HAS. See the Colorado PERA and Furlough Days From July 1, 2002, through June 30, 2004 fact sheet.

If you are within 90 days of your effective date of retirement and have filed a PERA Retirement Application with PERA, you will receive information from PERA about the cost of these optional member contributions and the possible effects on benefits. Upon receipt of this information, you have 30 days to make these contributions or you will lose the right to pay them.

Currently, State law does not allow any other make-up contributions of furlough days. For information on furlough days after June 30, 2004, see the Colorado PERA and Furlough Days After June 30, 2004, fact sheet

Federal Limits on Benefits

An Option 1 benefit under the PERA benefit structure can never exceed 100 percent of HAS. This 100 percent limit does not apply to benefits under the DPS benefit structure.

If you are under the DPS benefit structure, choose an Option P3, and name someone other than your spouse who is more than 10 years younger than you as your cobeneficiary, the amount that continues to your cobeneficiary at your death could be limited in accordance with percentages required by the Internal Revenue Code regulations.

Benefits paid under both the PERA and DPS benefit structures are subject to a federal annual limit on the amount of retirement benefits that PERA retirees may receive under Internal Revenue Code (IRC) Section 415.

IRC Section 415 benefit limits are designed to prevent individuals from accruing excessive pension benefits on a tax-deferred basis. PERA cannot pay any benefit amount in excess of these federally imposed limits. For more information, see the Internal Revenue Code 415(b) Limits fact sheet.

PERA has developed a process called a Replacement Benefit Arrangement that provides for your employer to pay you the amount you are not being paid by PERA because of the federal tax limit. This is done at little or no cost to the employer.

PERA Benefits and Domestic Relations Orders

If a you have a valid domestic relations order (DRO) on your account, part of the monthly benefit will be paid to you and part will be paid to the alternate payee (your ex-spouse) as specified in the DRO.

See the Divorce and Domestic Relations Orders page for more information.

PERA Funds and Legal Process

PERA retirement benefits can only be subject to legal process for federal and Colorado State tax liens, assignments for child support purposes, garnishments for child support arrearages or child support debt, and valid domestic relations orders. PERA retirement benefits are also subject to attachment for restitution for theft, embezzlement, misappropriation, or wrongful conversion of public property. Attachment is also allowed in the event of a judgment for a willful and intentional violation of fiduciary duties where the offender or a related party received direct financial gain. PERA benefits are not otherwise subject to execution, levy, attachment, garnishment, or bankruptcy proceedings and cannot be assigned voluntarily or involuntarily.

View, print or order the PERA Retirement Process booklet

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