Goal: An effective retirement system provides all public servants with a path toward a secure retirement.

Reality: The state’s current benefits structure creates winners and losers among PERA members.

Instead of earning retirement benefits steadily over the course of their careers, PERA members earn relatively meager retirement benefits in the early and middle portions of their careers and only become eligible for meaningful benefits after many years of public service with PERA-covered employers (e.g., after 20 or more years of work for teachers).

This inequitable distribution of benefits results in many public servants receiving benefits that are less valuable than the contributions made on their behalf and a select few receiving benefits worth much more.

The back-loaded distribution of retirement benefits means that those who move to or from Colorado or who move between the private and public sectors over their careers are more likely to lose out under the state’s formula.

And because PERA members do not benefit from the safety net of Social Security, these inequalities may jeopardize the retirement security of many of Colorado’s dedicated public servants.

Click image to expand.

Source: Colorado PERA, Comprehensive Annual Financial Report 2013; chart created by the  Laura and John Arnold Foundation (2014).

Moving-On Michelle

Teaching was Michelle’s first job out of college but, after nine years in Colorado classrooms, she’s decided to transition to the private sector. Michelle and the school district have been paying into PERA but, if she never returns to public service, her PERA benefits will be limited when she reaches retirement age.

Visit our PERA Member Profiles page to read more about these illustrations.

Years teaching in Colorado classrooms: 9

Michelle’s lifetime benefit under the current structure: $15,574

Michelle’s lifetime benefit with a smooth accrual plan: $54,921

Michelle earns $39,347 less under the current PERA structure