How is PERA Funded?

With every paycheck, PERA members are working towards to a secure retirement, but there is more to the equation than employee contributions.

Employees: PERA members contribute 8% of their monthly salary (10% for Colorado Bureau of Investigation and State Troopers).

Employers: Employer contribution rates are established by state law and are determined as a percent of member pay. Since July 1, 1985, a portion of PERA employer contributions are used to pay part of the health care premiums for benefit recipients enrolled in the PERA health care program.

These contribution amounts were increased in 2006, 2008 & 2010 using mechanisms called the AED & SAED.

AED= Amortization Equalization Disbursement. The AED is an additional amount contributed by PERA employers that has gradual increases.

SAED= Supplemental Amortization Equalization Disbursement. The SAED is also an amount contributed by employers and is, to the extent permitted by law, to be funded by moneys otherwise available for employee wage increases. The SAED also has gradual increases

While the SAED increase is attributed to the employer, the actual cost is passed onto the employee in the form of a reduced salary increase.

Here is a chart detailing employee and employer contribution rates for each division within PERA.

Investment Income
Over 25 years, since 1999, the average rate of return has been 8.38%. Since Senate Bill 1 (SB1), the average rate of return has been 8.62%.

These investments consist of common stocks of top-rated companies, corporate boards, U.S. Treasury and other government securities, mortgages, real estate property, and other investment vehicles.