SUPPORT: HB 1265 Judicial Division Contributions

UPDATE: 3/29/17 The bill passed out of House Finance on a bi-partisan 12-1 vote and is on to House Appropriations.

HB 1265 is sponsored by Representatives KC Becker (D-Boulder, Clear Creek, Gilpin, Grand, Jackson) & Dan Nordberg (R-El Paso) along with Senators Andy Kerr (D-Jefferson) & Kevin Priola (R-Adams).

Secure PERA is supporting this bill. The Judicial Division entered orange status in 2016. HB 1265 would help restore them out of orange status by starting AED and SAED contribution increases. The State, School and DPS divisions began these increases in 2010 under SB 10-01. At the time Judicial and Local did not need to increase these contributions. Now, Judicial does so we support this legislation. The increases would happen over six years and would stop at rates equal to where the State division is today.

As a note – the AED and SAED contributions are all made via the employer but the SAED dollars are to be dollars that would otherwise be available for employee raises, thus making them employee contributions.

You can read the bill in its entirety by clicking here.

HB 1265 will increase employer contributions (AED & SEAD) to the Judicial Division of PERA. There will be incremental increases until 2023 when the total amount paid will equal the State Division.

In 2004 and 2006, the general assembly enacted legislation that required each employer in the public employees’ retirement association (PERA) to make additional contributions to PERA. The additional employer contributions are the amortization equalization disbursement (AED) and a supplemental amortization equalization disbursement (SAED). Although the SAED is an employer contribution, it is funded by money that would otherwise be available for employee salary increases. The AED and the SAED are to reduce PERA’s unfunded liability and amortization period.

Both the AED and the SAED increase gradually over time for all PERA divisions. In 2010, the general assembly capped the AED and the SAED for the judicial division and the local government division at the 2010 levels, which for the AED is 2.20% of the employer’s total payroll and for the SAED is 1.50% of the employer’s total payroll.

For the calendar year beginning in 2019, for the judicial division only, the bill increases the AED to 3.40% of total payroll and requires the AED payment to increase by 0.4% of total payroll at the start of each of the following 4 calendar years through 2023. In addition, for the calendar year beginning in 2019, for the judicial division only, the bill increases the SAED to 3.40% of total payroll and requires the SAED payment to increase by 0.4% of total payroll at the start of each of the following 4 calendar years through 2023.