Probably one of the most common things we hear from readers is, “I’m a Colorado PERA member, but I don’t really know much about it.” Hey, we get it. When you started your job in public service, you likely first heard about PERA during the barrage of benefit-related information you receive in orientation. Plus, it’s so easy to push thoughts of retirement to the back of your mind, especially when you're just jump-starting your career. Well, we're here to tell you that, whether your retirement plan is through PERA or another employer-sponsored plan, it’s a good idea to think about the different options available to you as you move through your career.
Here are some common things you might not know about your PERA retirement account:
1.) It's highly portable.
PERA doesn’t just cover teachers and state workers; there are actually over 500 Colorado public employers affiliated with PERA. You're free to switch among any of them and continue to build on the same retirement account. That means you can start as a teacher in one school district, switch to another school district, and then leave teaching all together to work for a state agency—and meanwhile, maintain the same retirement account through all of it.
2.) You're eligible for a monthly benefit, for life, at retirement.
A common misconception is that you need at least five years of time in PERA before you're eligible for a monthly retirement benefit. That is not the case. Current members* in PERA's defined benefit (DB) plan, upon reaching the age and service credit requirements for retirement eligibility or age 65, receive a monthly retirement benefit regardless of how much time they've accrued. This means you could work as a teacher for one year in your 20s, leave your retirement account with PERA until age 65, and then receive a guaranteed monthly lifetime benefit based on the accrued amount, plus interest, plus 100% of your employer’s matching contribution.
*The passing of Senate Bill 200 in June 2018 has introduced the following changes to the PERA plan for any new members as of January 1, 2020.
3.) You have options if you leave your PERA-affiliated job.
a. You can take your account with you. If you decide you'd rather not leave your money invested in PERA to grow with interest and provide you a monthly benefit in retirement, you can take a lump-sum refund of your account. This can be in the form of cash (that you'll have to pay taxes on upfront) or (which will maintain its tax-deferred status).
b. If you're having a hard time making up your mind about what to do, you can leave your account with PERA where it will earn a risk-free, guaranteed rate of return. Currently that rate is 3 percent. So if you have an account here and you aren’t sure what you might want to do, leave it and let it grow without any risk of loss.
4.) You will have access to PERACare health coverage at retirement.
Another great benefit of being a PERA retiree is access to PERACare, PERA’s health benefits program for retirees. This is invaluable, as it gives you access to group rates for health care, as well as a subsidy toward your premiums based on how long you worked.
5.) Your PERA benefit is never affected by any other pension or Social Security payment.
PERA will never reduce your monthly retirement benefit due to income you receive from other retirement plans, including Social Security.