In 2009, the Denver Public Schools (DPS) retirement system merged into the Colorado Public Employees' Retirement Association (PERA), creating a distinct DPS division within PERA. This merger aimed to integrate DPS employees into the broader state retirement system while maintaining a separate accounting for their pension liabilities.
To ensure financial alignment between the DPS division and PERA's school division, a "true-up" mechanism was established. This process, conducted every five years starting in 2015, assesses whether the employer contribution rates for the DPS division need adjustment to equalize the unfunded actuarial accrued liability ratios of both divisions over a 30-year period.
As a result of the latest true-up assessment, legislation has been enacted to reduce the total employer contribution rate for the DPS division from 10.4% to 7.4% of salary, effective July 1, 2025. This adjustment reflects the improved funding status of the DPS division, bringing its contribution rate in line with the school division and ensuring equitable funding across both divisions.
It's important to note that this change pertains exclusively to the DPS division; employer and member contribution rates for other PERA divisions remain unaffected.
Summary
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.
