Fire and Police Pension Association of Colorado Statewide Retirement Plan

C.R.S. tit. 31, art. 31.5
in effect

C.R.S. § 31-31.5-101 Establishment of the statewide retirement plan - definitions

31-31.5-101. Establishment of the statewide retirement plan - definitions. (1) The statewide retirement plan is hereby established to provide defined benefit and money purchase retirement benefits to members of employers affiliated with the plan. Initial employers affiliated with the plan include those departments that participated in the statewide defined benefit plan established pursuant to part 4 of article 31 of this title 31, the statewide hybrid plan established pursuant to part 11 of article 31 of this title 31, and the social security supplemental plan established pursuant to part 7 of article 31 of this title 31 as such plans existed before their merger into the statewide retirement plan pursuant to House Bill 22-1034, enacted in 2022. (2) The board is the trustee of the statewide retirement plan, and has those fiduciary duties to the plan and the members of the plan as expressly provided by law. (3) The board, as a fiduciary, may delegate one or more of its responsibilities under this article 31.5 but shall maintain its responsibility for oversight of the delegation. (4) (a) The statewide retirement plan is intended to comply with the qualification requirements specified in section 401 (a) of the "Internal Revenue Code of 1986", as amended and applicable to governmental plans, as defined in section 414 (d) of said code. (b) The board may adopt any provision for the plan that is necessary or in the board's judgment prudent to comply with state or federal law. (5) As used in this article 31.5, unless the context otherwise requires: (a) "Actuarially sound" means a police officers' or firefighters' pension fund determined by the board to be receiving or scheduled to receive employer and member contributions in each fiscal year equal to the annual contributions actuarially determined to be necessary to pay the annual current service cost of pension benefits attributable to active employees and to pay the annual contribution necessary to amortize any unfunded accrued liability over a period not to exceed forty years. The actuarial cost method to be utilized shall be the entry age-normal cost method. The date from which unfunded liabilities shall be amortized shall be determined pursuant to part 3 of article 30.5 of this title 31. (b) "Association" means the fire and police pension association created in section 31-31-201 (1). (c) "Board" means the board of directors established as the governing body of the fire and police pension association as provided in section 31-31-201 (2). (d) "Employer" means any municipality in this state offering police or fire protection service employing one or more members and any special district, fire authority, or county improvement district in this state offering fire protection service employing one or more members. (e) "Lifetime benefit components" means the defined benefit component, the social security component, and the hybrid component, as described in this article 31.5, collectively. ffering police or fire protection service employing one or more members and any special district, fire authority, or county improvement district in this state offering fire protection service employing one or more members. (e) "Lifetime benefit components" means the defined benefit component, the social security component, and the hybrid component, as described in this article 31.5, collectively. (f) "Member" means an active employee who is a full-time salaried employee of a municipality, fire protection district, fire authority, or county improvement district normally serving at least one thousand six hundred hours in any calendar year and whose duties are directly involved with the provision of police or fire protection, as certified by the member's employer. The term does not include clerical or other personnel whose services are auxiliary to police protection, or any volunteer firefighter, as such term is defined in section 31-30-1102 (9). For the purpose of participation in the defined benefit component of the statewide retirement plan pursuant to this article 31.5, or the statewide money purchase plan pursuant to part 5 of article 31 of this title 31, but not for the purpose of participation in the statewide death and disability plan pursuant to part 8 of article 31 of this title 31, the term may include clerical or other personnel employed by a fire protection district, fire authority, or county improvement district, whose services are auxiliary to fire protection. For the purpose of eligibility for disability or survivor benefits, "member" includes any employee on an authorized leave of absence. (g) "Money purchase plan" or "money purchase pension plan" means a retirement plan under which: (I) The employer has a fixed obligation to make an annual contribution to the plan; (II) An individual account for each member is provided; and (III) The member's benefits are based solely on the amount contributed to the member's account and any income, expenses, gains, and losses allocated to the member's account. (h) "Predecessor plans" means the statewide defined benefit plan formerly governed by part 4 of article 31 of this title 31, the statewide hybrid plan formerly governed by part 11 of article 31 of this title 31, and the social security supplemental plan formerly governed by part 7 of article 31 of this title 31. (i) "Retired member" means any member who is retired, disabled, or eligible for a benefit as provided in section 31-31.5-401.

C.R.S. § 31-31.5-102 Administration of the plan - rules

31-31.5-102. Administration of the plan - rules. (1) (a) Contributions and earnings to all components of the statewide retirement plan shall be held in trust as part of the defined benefit system trust fund. (b) There is hereby established in the defined benefit system trust fund, a lifetime benefits account into which contributions made pursuant to sections 31-31.5-301, 31-31.5-302, and 31-31.5-303 must be deposited. The defined benefits of the lifetime benefit components, including cost of living adjustments provided by the plan pursuant to part 4 of this article 31.5, together with the expenses of administering the lifetime benefit components of the plan, shall be paid from the account. The lifetime benefits account shall be invested within the fire and police members' benefit investment fund. (c) There is established in the defined benefit system trust fund, a money purchase account into which contributions made pursuant to section 31-31.5-304 must be deposited and assigned to individual accounts and administered pursuant to part 5 of this article 31.5. The board may create subaccounts within the account to adequately track the vesting and the source of money deposited into the account on behalf of each member. The money purchase component account must be invested within the fire and police members' self-directed investment fund. (d) The board shall keep an accurate account of the assets and liabilities of the lifetime benefits account and the money purchase component account. (2) The board may adopt by rule such matters as may be necessary to codify the board's interpretation, administration, and management of the statewide retirement plan. (3) The board may provide for the administration of domestic relations orders issued pursuant to article 10 of title 14 with regard to the plan or its predecessor plans.

C.R.S. § 31-31.5-201 Membership

31-31.5-201. Membership. Except as otherwise provided in this article 31.5 or article 31 of this title 31, a member whose employer is affiliated with a component of the statewide retirement plan shall participate in the statewide retirement plan on the first day of employment if the employer withholds member contributions on behalf of the member and the applicable forms are completed and submitted to the association.

C.R.S. § 31-31.5-202 Reentering and affiliating employers

31-31.5-202. Reentering and affiliating employers. (1) Members of employers who reenter or affiliate pursuant to part 7 or part 11 of article 31 of this title 31 shall participate in the statewide retirement plan beginning on the employer's effective date pursuant to rules adopted by the board. (2) Members covered by subsection (1) of this section may elect a trustee-to-trustee transfer in order to transfer assets from the predecessor money purchase plan to the member's individual account established pursuant to part 5 of this article 31.5. (3) An active member who is required to transfer money purchase assets to the statewide retirement plan may also elect to convert the vested proceeds from the predecessor money purchase plan into service credit towards the accrual of benefits under the lifetime benefit components as may be allowed pursuant to the board's rules.

C.R.S. § 31-31.5-203 Department chief - exemption by written agreement - definition

31-31.5-203. Department chief - exemption by written agreement - definition. (1) A department chief hired on or after April 8, 1978, is exempt from the statewide retirement plan upon the execution of a written agreement between the department chief and the chief's employer that provides for the department chief's participation in social security or in a federal insurance contribution act replacement plan as allowed under rules established by the board and in compliance with the federal "Internal Revenue Code of 1986". A department chief may satisfy the federal insurance contribution act replacement plan requirement by participating in an employer sponsored plan, the statewide money purchase plan, or a component of the statewide retirement plan. (2) As used in this section, "department chief" means the senior command officer of any fire or police department of any employer by whatever title known including but not limited to chief, administrator, or director. (3) A department chief exempted pursuant to subsection (1) of this section may maintain coverage for disability and survivor benefits under part 8 of article 31 of this title 31 if the department chief participates in the statewide money purchase plan, the statewide retirement plan, or a local money purchase plan that is qualified under section 401 (a) of the federal "Internal Revenue Code of 1986" and that has a contribution rate of not less than eighteen percent.

C.R.S. § 31-31.5-204 Reemployment

31-31.5-204. Reemployment. (1) An inactive member who is subsequently reemployed shall participate in the plan in the manner prescribed by rules adopted by the board. (2) (a) The board shall adopt rules regarding the treatment of a member who participates in the statewide retirement plan, incurs a bona fide separation from service, elects a retirement, and subsequently returns to work with an employer who participates in the statewide retirement plan in conformance with the federal "Internal Revenue Code of 1986", as amended. (b) Such rules must indicate: (I) Whether the member continues to receive benefit distributions during the reemployment or whether the member's benefit distribution ceases during reemployment; (II) Whether the member earns additional service credit as determined by the plan in which the subsequent employer participates or whether the member earns additional retirement benefits by participating in an alternate money purchase plan; and (III) Whether the benefit distribution, if ceased during reemployment, resumes when the member subsequently separates from service.

C.R.S. § 31-31.5-301 Defined benefit component minimum contributions

31-31.5-301. Defined benefit component minimum contributions. (1) Every member covered under the defined benefit component of the statewide retirement plan shall pay into the lifetime benefits account twelve percent of base salary paid or any higher member contribution rate established pursuant to part 6 of this article 31.5. The payment shall be made by the employer by deduction from the salary paid to the member. (2) (a) Every employer employing members who are covered by the defined benefit component of the statewide retirement plan shall pay into the lifetime benefits account nine percent of the base salary paid to the member or any higher employer contribution rate established pursuant to part 6 of this article 31.5. The employer contribution rate shall increase by three percent to be implemented through six annual increases as follows: Beginning in 2023, and each year thereafter through 2028, the employer contribution rate shall increase by an additional one-half of one percent of base salary until the total employer contribution rate, including the cumulative contribution rate increases, is twelve percent of base salary. (b) In addition to the rate established in subsection (2)(a) of this section, the employer contribution rate shall be increased by one percent of base salary to be implemented as follows: Beginning in 2029, and continuing through 2030, the employer contribution rate shall increase by an additional one-half of one percent of base salary in each year for a total of a one percent increase in order to pay for the cost of providing the option to retire contained in section 31-31.5-401 (2)(b). (3) After considering the results of the actuarial valuation conducted pursuant to section 31-31.5-402, if the assets of the lifetime benefit components of the plan combined with projected contributions are sufficient to fully fund the benefits provided for in part 4 of this article 31.5 on an actuarially sound basis plus the projected cost of living adjustments as determined by the board, the board may, in its sole discretion, allocate surplus contributions to the money purchase component pursuant to section 31-31.5-304. The board shall designate whether any such allocation is an employer contribution or a member contribution.

C.R.S. § 31-31.5-302 Social security component minimum contributions

31-31.5-302. Social security component minimum contributions. (1) This component covers the members of those employers that have elected coverage under the plan pursuant to section 31-31-704.5. (2) Each member shall make contributions at one-half of the member contribution rate established for the defined benefit component in section 31-31.5-301 by deduction from the salary paid to the member. For each member, the employer shall pay one-half of the employer contribution rate established for the defined benefit component in section 31-31.5-301 including any allocation made to the money purchase component made pursuant to section 31-31.5-301 (3).

C.R.S. § 31-31.5-303 Hybrid component minimum contributions

31-31.5-303. Hybrid component minimum contributions. (1) Every employer shall contribute to the lifetime benefits account eight percent of the base salary of the member. The employer contribution rate shall increase by one percent of base salary to be implemented through eight annual increases as follows: Beginning in 2023, and each year thereafter through 2030, the employer contribution rate shall increase by an additional one-eighth of one percent of base salary until the total employer contribution rate, including the cumulative contribution rate increases, is nine percent of base salary. (2) Every member shall contribute to the lifetime benefits account eight percent of the base salary of the member. The member contribution rate shall increase by one percent of base salary to be implemented through eight annual increases as follows: Beginning in 2023, and each year thereafter through 2030, the member contribution rate shall increase by an additional one-eighth of one percent of base salary until the total member contribution rate, including the cumulative contribution rate increases, is nine percent of base salary. The payment shall be made by the employer by deduction from the salary paid to the member. (3) The combined mandatory contributions shall be allocated between the hybrid component and the money purchase component as determined annually by the board based on the amount required to fund the benefit provided under the hybrid component.

C.R.S. § 31-31.5-304 Money purchase component contributions

31-31.5-304. Money purchase component contributions. (1) For members who elected the money purchase only option upon reentry into a predecessor plan, the contribution rate for employers and members is equal to the contribution rates established in the predecessor plan. (2) Contributions, including separate retirement account balances from the predecessor statewide defined benefit plan established under part 4 of article 31 of this title 31, transfers from the predecessor statewide hybrid plan money purchase accounts, surplus contributions allocated from the defined benefit component contributions pursuant to section 31-31.5-301 (3), the portion of the minimum contributions of hybrid component allocated to the money purchase component pursuant to section 31-31.5-303 (3), increased local mandatory contributions pursuant to section 31-31.5-307, and increased local voluntary contributions pursuant to section 31-31.5-308 must be deposited in the money purchase component. (3) The board may provide through rules for rollovers or transfer of funds from other plans to be deposited in the money purchase component subject to requirements and limits established by the federal "Internal Revenue Code of 1986", as amended.

C.R.S. § 31-31.5-305 Continuing rates of contribution for reentry and affiliating departments

31-31.5-305. Continuing rates of contribution for reentry and affiliating departments. (1) At the time of reentry or affiliation, the board may establish a continuing rate of contribution for departments reentering or affiliating with the statewide retirement plan in addition to the employer and member contributions otherwise required by this part 3 in order to maintain the actuarial soundness of the plan and the plan for disability and survivors benefits provided for in part 8 of article 31 of this title 31. (2) It shall be locally decided during the affiliation process whether the continuing rate of contribution shall be made by the member or the employer or split equally between the member and the employer.

C.R.S. § 31-31.5-306 Picked-up contributions

31-31.5-306. Picked-up contributions. Each employer shall pick up the mandatory employee contributions required under this part 3, to the extent allowed by the federal "Internal Revenue Code of 1986", as amended, and the contributions picked up shall be treated as employer contributions pursuant to section 414 (h)(2) of the federal "Internal Revenue Code of 1986", as amended, in determining their income tax treatment. The employer shall pay these employee contributions directly to the association, instead of paying such amounts to the members. Such contributions shall be paid from the same funds that are used in paying salaries to the members. Such contributions, although designated as employee contributions, shall be paid by the employer in lieu of contributions by the members. Members may not elect to choose to receive such contributions directly instead of having them paid by the employer to the plan. Employee contributions so picked up shall be treated for all purposes of this article 31.5, other than federal tax, in the same manner as employee contributions made before the date picked up.

C.R.S. § 31-31.5-307 Increased local mandatory contribution requirements

31-31.5-307. Increased local mandatory contribution requirements. (1) An employer or active member or both may be required to pay a mandatory contribution rate in excess of the rate established in section 31-31.5-301, 31-31.5-302, or 31-31.5-303 upon enactment by the employer of a resolution or ordinance setting forth the higher contribution rate and approval of the higher rate by at least sixty-five percent of the employer's active members voting for the higher contribution rate. (2) An employee who has previously established a mandatory contribution rate under a local money purchase plan in excess of the mandatory contribution rate may continue the previous contribution rate as an increased contribution rate. (3) Upon adoption of a resolution or ordinance, and approval of at least sixty-five percent of the employer's active members voting, a mandatory contribution rate in excess of the minimum required contribution rate may be reduced to the minimum required contribution rate or the excess above the minimum required contribution rate may be redirected to another available employee benefit.

C.R.S. § 31-31.5-308 Increased local voluntary contribution requirements

31-31.5-308. Increased local voluntary contribution requirements. (1) Active members may make additional after-tax contributions to the money purchase component account under part 5 of this article 31.5. Voluntary member contributions are not subject to the employer pick-up provisions of section 414 (h)(2) of the federal "Internal Revenue Code of 1986", as amended. (2) Employers may make additional contributions to the money purchase component account under part 5 of this article 31.5 on behalf of members. Employer voluntary contributions vest on the schedule established in section 31-31.5-501.

C.R.S. § 31-31.5-309 Remittance of contributions to the association

31-31.5-309. Remittance of contributions to the association. (1) Remittances of contributions are due no later than ten days following the date of payment of salary to a member. All remittances of contributions must be credited to the defined benefit system trust fund. (2) The payments required by this section are subject to interest as established by the board if not submitted when due.

C.R.S. § 31-31.5-310 Service credit purchases

31-31.5-310. Service credit purchases. Members participating in the lifetime benefit components may purchase, including by rollover or transfer of funds, additional defined benefit service credit for other public employment within the United States not covered by the plan, United States uniformed military service, or up to five years of private employment, subject to the limits established by the federal "Internal Revenue Code of 1986", as amended, and as may be allowed under the rules and regulations adopted by the board.

C.R.S. § 31-31.5-401 Vesting and benefit eligibility

31-31.5-401. Vesting and benefit eligibility. (1) A member with five years of service credit in one or a combination of more than one of the lifetime benefit components is considered vested for purposes of a pension payable from the lifetime benefit components of the statewide retirement plan. (2) A member is eligible for a normal retirement when: (a) The member has accumulated at least twenty-five years of service credit and has attained age fifty-five; or (b) The member has attained age fifty, the member's combined age and years of accrued service is equal to at least eighty, and the member is not receiving benefits pursuant to section 31-31-803. (3) A vested member who attains age fifty-five is eligible to terminate service and begin receiving an unreduced benefit. A member who terminates employment before attaining age fifty-five and who has at least five years of service credit may leave contributions in the plan and begin receiving an unreduced benefit upon attaining age fifty-five. (4) An active or inactive vested member who is not eligible for normal retirement, who has attained age fifty, who is not receiving or has terminated benefits pursuant to section 31-31-803, and who has terminated employment is eligible for an early retirement pension. The early retirement pension for a member is the benefit that the member would have received at age fifty-five reduced on an actuarial equivalent basis to reflect the early receipt of the benefit as determined by the board. (5) Subject to rules adopted by the board, years of service credit of a member who is employed by successive employers may be aggregated for determining eligibility and benefits provided by the lifetime benefit components of the statewide retirement plan if the service for each employer was rendered while the employer covered its members under the statewide retirement plan, the predecessor statewide defined benefit plan, or the defined benefit component of the predecessor statewide hybrid plan.

C.R.S. § 31-31.5-402 Plan funding - actuarial valuation and adjustments to maintain the actuarial soundness of the plan

31-31.5-402. Plan funding - actuarial valuation and adjustments to maintain the actuarial soundness of the plan. (1) The general assembly declares that the rates of member and employer contributions must be adequate to fund benefit liabilities accrued under the statewide retirement plan established by this article 31.5. (2) (a) The board shall conduct an annual actuarial valuation of the statewide retirement plan and shall determine the cost of all benefits of the lifetime benefit components, which may include projected cost of living adjustments for each of the lifetime benefit components. The board shall submit an annual actuarial valuation report to the state auditor, the pension review committee, the legislative audit committee, and the joint budget committee of the general assembly, together with any recommendations concerning such liabilities as accrued. Amortization of liability over a forty-year period shall be deemed adequate to maintain actuarial stability. (b) The board shall periodically conduct a review and study of the actual experience of the assets and liabilities of the lifetime benefit components of the statewide retirement plan. The board shall adjust the assumptions made with regard to each component as a result of the review and study. (3) The board shall determine after each annual actuarial valuation if the cost of all benefits established by this part 4 and the cost of a normal retirement pension beginning at age fifty-five for members then eligible may be fully funded on an actuarially sound basis not including future projected cost of living adjustments without necessitating an increase in the employer and member contributions made pursuant to subsection (5) of this section. (4) If in any year the board determines pursuant to subsection (2) of this section that the cost of the benefits described in this part 4 may not be fully funded on an actuarially sound basis, the board, in its discretion, may take the following actions singularly or in any combination and in any order: (a) The board may terminate allocating surplus contributions to the money purchase component pursuant to section 31-31.5-301 (3); (b) The board may terminate making cost of living adjustments pursuant to section 31-31.5-410; (c) (I) The board may order that the normal retirement pension commence such number of months as are actuarially supportable, from one to sixty, after age fifty-five for members who are otherwise eligible pursuant to section 31-31.5-401 (2)(a). If the board adjusts the age of eligibility pursuant to this subsection (4)(c)(I), it shall also adjust the age of eligibility for benefits under section 31-31.5-401 (2)(b), (3), and (4) in a like manner. The determination of the board is conclusive absent fraud. (II) A pension commenced before any adjustment in the age of eligibility pursuant to subsection (4)(c)(I) of this section is not subject to review. If a court determines that this subsection (4) is invalid, the age of retirement to be eligible for any normal retirement benefit shall be age sixty except for persons receiving a benefit at the time of the court's decision. (d) The board may prospectively order that the benefit multiplier used in section 31-31.5-403 (1)(b) be reduced from two and one-half percent to as low as two percent for any given year or years; (e) The board may suspend further implementation or participation in any plan amendment adopted pursuant to part 6 of this article 31.5 that contributes additional cost to the plan; (f) The board may suspend further participation in the deferred retirement option plan pursuant to section 31-31.5-409 if it determines that the option contributes additional cost to the statewide retirement plan; and (e) The board may suspend further implementation or participation in any plan amendment adopted pursuant to part 6 of this article 31.5 that contributes additional cost to the plan; (f) The board may suspend further participation in the deferred retirement option plan pursuant to section 31-31.5-409 if it determines that the option contributes additional cost to the statewide retirement plan; and (g) The board may reinstate any benefits terminated, adjusted, or suspended pursuant to this section if it determines that the action taken is no longer necessary to maintain the actuarial soundness of the lifetime benefit components. This may include, but is not limited to, retroactive reinstatement of the benefit multiplier reduced under subsection (4)(d) of this section. (5) (a) If the actual financial experience of the lifetime benefits account is found to be more or less favorable than the assumed experience during the previous period, adjustments may be made by the board in the member and employer contributions as may be deemed feasible and advisable so long as the employer contribution rate adjustment is equal to the member contribution rate adjustment. (b) The board shall not increase employer or member contributions pursuant to subsection (5)(a) of this section unless it has taken the actions permitted under subsections (4)(a) to (4)(f) of this section and it finds that the increase is necessary to maintain the actuarial soundness of the plan. (6) Nothing in this section shall be construed to require the reduction of benefits below the level sustainable by the higher member or employer contribution rates established pursuant to section 31-31.5-601.

C.R.S. § 31-31.5-403 Defined benefit component benefits

31-31.5-403. Defined benefit component benefits. (1) In calculating the retirement pension for a member who has service credit in the defined benefit component, the benefit is the sum of the following: (a) Two percent multiplied by the service credit earned or purchased in the defined benefit component, not to exceed ten years of service credit, multiplied by the average of the member's highest three years' base salary in the defined benefit component; plus (b) Two and one-half percent multiplied by the service credit earned or purchased in the defined benefit component in excess of ten years multiplied by the average of the member's highest three years' base salary in the defined benefit component.

C.R.S. § 31-31.5-404 Social security component benefits

31-31.5-404. Social security component benefits. (1) In calculating the retirement pension for a member who has service credit in the social security component, the benefit is the sum of the following: (a) One percent multiplied by the years of service credit in the social security component, not to exceed ten years of service credit, multiplied by the average of the member's highest three years' base salary in the social security component; plus (b) One and one-quarter percent multiplied by the years of service credit in the social security component in excess of ten years multiplied by the average of the member's highest three years' base salary in the social security component.

C.R.S. § 31-31.5-405 Hybrid component benefits

31-31.5-405. Hybrid component benefits. (1) In calculating the normal retirement pension for a member who has years of service credit in the hybrid component, the benefit shall be: (a) A multiplier, which the board shall establish by adjusting the funding status of the predecessor statewide hybrid plan to equal the funding status of the predecessor statewide defined benefit plan using valuations as of December 31, 2021, and based on the recommendations made by the plan's actuary, multiplied by the years of service credit earned or purchased in the statewide hybrid plan prior to January 1, 2023, multiplied by the average of the member's highest three years' base salary; plus (b) One and one-half percent multiplied by the years of service credit earned or purchased in the hybrid component on or after January 1, 2023, multiplied by the average of the member's highest three years' base salary.

C.R.S. § 31-31.5-406 Optional survivor benefits

31-31.5-406. Optional survivor benefits. (1) A member eligible for a normal, late, or early retirement pension may elect to receive a reduced pension payable to the member and, upon the member's death a reduced benefit to the member's designated beneficiary. The board shall establish such options by rule in a manner that provides for an actuarial equivalent benefit of the normal or early retirement pension otherwise payable. (2) If a member reaches age eligibility for a normal, vested, or early retirement pension, and dies before making an election allowed pursuant to subsection (1) of this section or before the first pension payment has been deposited, and is survived by a spouse, dependent child, or designated beneficiary, the member shall be considered to have elected an actuarially reduced pension and retired on the day before the member's death. Payable to the members spouse, dependent child, or designated beneficiary, such reduced pension shall be payable to the member's designated beneficiary. A spouse, dependent child, or designated beneficiary of a member who has not yet reached age eligibility may elect to receive an actuarially reduced benefit beginning on the date that the member would have reached age eligibility in lieu of a death benefit under part 8 of article 31 of this title 31 and in lieu of a refund of member contributions pursuant to section 31-31.5-411.

C.R.S. § 31-31.5-407 Minimum benefit

31-31.5-407. Minimum benefit. (1) If the total amount of pension benefits paid under the lifetime benefit component as provided in this article 31.5 at the time of death is less than the amount of the members' contributions to the lifetime benefit component, the difference shall be paid to: (a) The member's estate, if no pension payment was made pursuant to an option under section 31-31.5-406; or (b) The survivor's estate, if pension payments were made pursuant to an option under section 31-31.5-406.

C.R.S. § 31-31.5-408 Late retirement

31-31.5-408. Late retirement. (1) Any member retiring and eligible for a normal or vested retirement benefit may elect to defer receipt of the pension until attaining age sixty-five years, but no later. In the case of such an election, the late retirement pension is the actuarial equivalent of the normal retirement pension as determined by the board. (2) The board may promulgate rules to allow members who are eligible to receive any type of retirement benefits to defer receipt of the benefits to the extent permitted under the federal "Internal Revenue Code of 1986" as amended, and the regulations promulgated pursuant to section 401 (a)(9) of said code.

C.R.S. § 31-31.5-409 Deferred retirement option plan (DROP)

31-31.5-409. Deferred retirement option plan (DROP). The board may establish by rule a deferred retirement option plan for vested members who have attained age fifty. The purpose of the DROP is to allow an eligible member to elect, in lieu of immediate termination of employment and receipt of a lifetime retirement benefit, to continue employment for a specified period of time of up to five years and to have the member's otherwise deductible employee contribution and retirement benefits paid into the member's individual account created by section 31-31.5-503 until the end of the specified period of the member's participation, at which time employment ceases.

C.R.S. § 31-31.5-410 Cost of living adjustments - definitions

31-31.5-410. Cost of living adjustments - definitions. (1) Cost of living adjustments payable under the lifetime benefit components of the plan, if any, may be paid effective October 1 each year. To be eligible to receive a cost of living adjustment, the benefits must have been paid for at least twelve calendar months prior to the effective date of the cost of living adjustment. Subject to the limits set forth in subsection (2) of this section, the board has the authority to determine the form in which a cost of living adjustment may be paid. This includes the frequency of payment, whether the payment is compounded or noncompounded, and any other form in which to pay a cost of living adjustment. (2) (a) Any cost of living adjustment made pursuant to subsection (1) of this section shall be determined by the board in its discretion as a fiduciary of the statewide retirement plan after considering the funding level of the lifetime benefit components, the cost of the adjustment, the components' ability to fund future benefits, and any other factors that the board deems appropriate. The cost of living adjustment shall not exceed the greater of: (I) One hundred three percent of the benefits paid for the prior twelve-month period; or (II) The benefits paid during the prior twelve-month period multiplied by a fraction using the consumer price index for the immediately preceding calendar year as the numerator and the consumer price index for the calendar year prior to the immediately preceding calendar year as the denominator. (b) As used in this section, "consumer price index" means the national consumer price index for urban wage earners and clerical workers prepared by the United States department of labor.

C.R.S. § 31-31.5-411 Refunds of member contributions

31-31.5-411. Refunds of member contributions. (1) (a) Any member covered by the statewide retirement plan who terminates service may elect to have the member's accumulated contributions to one or more lifetime benefit components of the plan refunded together with five percent of the member's total accumulated contributions as interest in a lump sum and thereafter shall have no right to lifetime benefits provided by the plan. (b) If the member who terminates service and receives a refund of member contributions subsequently returns to service as an active member with an employer that covers its members under the statewide retirement plan, the member's prior service credit shall be restored when the member returns the member's refunded contributions to the lifetime benefit components, with interest accrued from the date of refund to the date of return, according to the terms and conditions established by the board. If the member fails to return the contributions and interest, the member shall be treated as a new member, and the member's prior service shall not be recognized in determining pension eligibility or pension benefits. The restoration of a member's service credit pursuant to this subsection (1)(b) shall not entitle the member to reinstatement of any previously forfeited balance in the member's money purchase component account or the separate retirement account. (2) (a) If a member dies after termination of service, is not eligible for a vested, normal, or early retirement, and has not yet received a refund or began receiving benefit payments, the association shall refund the member's lifetime benefit component contributions to the member's designated beneficiary, surviving spouse, or dependent children. Where there is no designated beneficiary, surviving spouse, or dependent children, the refund shall be made to the deceased member's estate. (b) If a member who has not terminated service dies, and there is no spouse or dependents eligible for survivor benefits under part 8 of article 31 of this title 31, the deceased member's lifetime benefit component contributions may be refunded to: (I) The member's designated beneficiary if the member is not eligible for vested, early, or normal retirement. The designated beneficiary may in the alternative elect a lifetime benefit pursuant to section 31-31.5-406. (II) If there is no designated beneficiary, the member's estate. (3) The designated beneficiary of a member eligible for vested, early, or normal retirement shall receive the benefit described in section 31-31.5-406 (2) and no refund of contributions shall be made. (4) Upon payment of a refund of member contributions, no lifetime benefit components benefits shall be payable. (5) Refunds of contributions to the lifetime benefit components shall not be made to any members of employers who have failed to remit all contributions required under the provisions of the statewide retirement plan. (6) A member or the member's designated beneficiary, surviving spouse or partner in a civil union, or dependent children who is entitled to receive a refund of the member's defined benefit contributions may elect to have the refund credited to the member account in the money purchase component. Upon the refund being credited, the member or the member's designated beneficiary, surviving spouse or partner in a civil union, or dependent children are treated as having taken a refund from the defined benefit component for all purposes.

C.R.S. § 31-31.5-501 Vesting

31-31.5-501. Vesting. (1) A member is one hundred percent vested in the individual account in the money purchase benefit account pursuant to section 31-31.5-503. (2) Employer contributions made to the statewide retirement plan that are credited to the money purchase component account are subject to the following vesting rules: (a) In the event of permanent occupational or total disability retirement or an award of a survivor benefit due to a death of an active member pursuant to part 8 of article 31 of this title 31, a member shall be one hundred percent vested in the employer contributions made to the money purchase component account. (b) A member shall be one hundred percent vested in the employer's contributions made to the money purchase component account upon attaining normal retirement age if employed by the employer on or after that date. (c) Except as provided in subsections (2)(a) and (2)(b) of this section, a member is vested in the employer contributions made to the money purchase component account in the amount of twenty percent for each full year of service performed for a covered department. Upon attaining five full years of service, a member is one hundred percent vested. Vesting also applies to employer contributions allocated pursuant to section 31-31.5-301 (3) or allocated under the predecessor statewide defined benefit plan pursuant to section 31-31-405, as it existed prior to its repeal. (3) Upon distribution, the portion of the member's employer contributions to the money purchase component account that is not vested shall be treated as a forfeiture. (4) (a) Years of service in the money purchase component for purposes of this section cannot be purchased by the member or the employer. (b) A member who only participates in the money purchase component does not receive service credit for purposes of the lifetime benefit components. (c) For members who participate in both the lifetime benefit components and the money purchase component concurrently, years of service include all years of service with the employer while in the plan or a predecessor plan, regardless of whether contributions were made to the money purchase component for each year. (5) A member who is restored to active service after a disability ceases to exist receives credit for years of service in the money purchase component with the employer prior to the disability as well as time while out on disability. (6) Subject to rules adopted by the board, years of service of a member who is employed by successive employers may be aggregated for determining eligibility and benefits provided by the money purchase component of the statewide retirement plan if the service for each employer was rendered while the employer covered its members under the statewide retirement plan, the predecessor statewide defined benefit plan, or the predecessor statewide hybrid plan.

C.R.S. § 31-31.5-502 Normal retirement age

31-31.5-502. Normal retirement age. The normal retirement age for the money purchase component is age fifty-five.

C.R.S. § 31-31.5-503 Individual accounts - investment and account administration

31-31.5-503. Individual accounts - investment and account administration. (1) (a) The board shall create and maintain adequate records to disclose the interest of each member and beneficiary with assets in the money purchase component of the plan. The records must be in the form of individual accounts, and credits and charges must be made to such accounts in the manner prescribed by the board through rulemaking. (b) The board shall designate a record keeper responsible for the administration of the individual accounts. The maintenance of individual accounts is only for accounting purposes, and a segregation of the assets of the trust fund to each account is not required. (c) Distribution and withdrawals made from an account must be charged to the accounts as of the date payment is made. Earnings or losses on the amount allocated to the member's individual account while invested as part of the members self-directed investment fund must be allocated as determined by the record keeper. (2) (a) The board may create and offer to each member with an individual account in the money purchase component various investment options, including at least three alternatives that allow a member a broad range of investments, diversification, and a meaningful choice between risk and return in the investment of the member's account. (b) (I) One hundred percent of each individual account may be invested as directed by the member in any one or a combination of the investment options. If a member or designated beneficiary does not have a valid investment election on file for any portion of the amount in that member's accounts, that portion of the member's accounts shall be invested in the investment option selected by the board as the default option. In such event, the member or designated beneficiary is deemed to have directed that investment option for investment of that portion of the member's accounts. (II) Upon the death of the member, the designated beneficiary may elect to allocate the investment of the member's individual account as provided for in this section. If no notice of reallocation is received from the designated beneficiary, the member's individual account remains invested as previously allocated during the member's lifetime. (III) The board may establish one or more default options based upon various factors, including but not limited to market risk, stability, and rate of return. If the board has properly exercised its fiduciary duty in selecting a default option, it has no liability for any loss sustained by a member or designated beneficiary whose accounts in whole or in part are invested in the default option. (c) Members may redirect the investment of their account at any time and may reallocate money in existing funds as allowed by the association. The board may also bring a suit or take such other action as it deems appropriate if questions involving investment directions arise. (3) The accounts of members, designated beneficiaries, and alternate payees shall be adjusted in accordance with the following: (a) The balance of each account must be adjusted daily to reflect any distribution and all interest, dividends, account charges, and changes of market value resulting from the investment of the member's individual account. (b) Contributions must be allocated to the individual account of each eligible member not less frequently than monthly, according to the amount that is actually contributed on behalf of each member. In all cases, deposits of contributions shall be treated as actually made only as of the date the contributions are accepted as in good order by the record keeper. of the member's individual account. (b) Contributions must be allocated to the individual account of each eligible member not less frequently than monthly, according to the amount that is actually contributed on behalf of each member. In all cases, deposits of contributions shall be treated as actually made only as of the date the contributions are accepted as in good order by the record keeper. (c) The expenses of the money purchase component of the plan must first be paid from forfeitures, penalties received, settlement proceeds, and other sources of revenue received, and then must be allocated to and deducted from the members' accounts. Notwithstanding the foregoing, any revenue credits derived from the investments offered by the money purchase component may instead be distributed to participants. Expenses that are incurred as a direct result of the investments held in the money purchase component account must be deducted from the interest, dividends, and net income of the appropriate investment. General expenses must be deducted from the accounts of each member according to the member's time-weighted pro-rata share of the money purchase component account. The board may also assess a record keeping fee and an administrative fee for costs associated with the administration of the money purchase component.

C.R.S. § 31-31.5-504 Distribution of money purchase component accounts

31-31.5-504. Distribution of money purchase component accounts. (1) A member's vested account balance becomes eligible for distribution upon the member's death, permanent occupational or total disability pursuant to part 8 of article 31 of this title 31, normal, vested, or early retirement, or termination of employment. (2) Upon becoming eligible for distribution and upon approval of the board, a member, or the designated beneficiary if the member dies before distribution of the member's individual account, may elect to receive the vested portion of balance of the member's individual account by one of the following methods: (a) The member or designated beneficiary may choose a lump sum payment of all or a portion of the member's individual account. (b) The member or designated beneficiary may elect to have the value of all or a portion of the individual account used to purchase an annuity contract, with a term and in a form as the member elects. If there is an elected distribution in the form of an annuity, any benefit payable as a result of the member's or beneficiary's death must be determined solely under the terms of the annuity contract. (c) The member may elect to have all or a portion of the member's individual account distributed in substantially equal monthly payments over the member's life expectancy or a period not to exceed the joint life expectancy of the member and a spouse, if the spouse is the sole beneficiary, or until the account is exhausted. If the member dies prior to the member's required beginning date, the designated beneficiary may elect to have all or a portion of the member's individual account distributed in substantially equal monthly payments over a period not to exceed the life expectancy of the designated beneficiary. (d) A member who is vested in both member and employer contributions to the money purchase component of the plan and has attained age fifty-five may elect to transfer all or part of the member's individual account balance within the plan from the money purchase component account to the lifetime benefits account to purchase a monthly benefit, which is considered a portion of the pension under part 4 of this article 31.5. At retirement, a member may make a one-time irrevocable election to purchase the monthly benefit in a single lump sum, which must be transferred prior to the receipt of benefits from the lifetime benefit components. Funds may not be transferred from outside the statewide retirement plan to purchase a monthly benefit. Any transferred or rollover funds, except those funds transferred by a department as part of an affiliation or reentry process, held within the member's individual account are not eligible for purchase of a monthly benefit and remain in the account until otherwise distributed. (3) A member who terminates employment and has taken a refund of the member's contributions to the lifetime benefit components is not required to withdraw the money purchase component account, which shall be maintained and shall continue to receive allocations for earnings and expenses until the assets of the account are distributed. (4) The board may establish by rule a minimum value for an individual account and may require distribution if an account falls below the required minimum value without receipt of a request for distribution. (5) Upon a member's death with no designated beneficiary, the member's individual account must be distributed to the member's estate. Upon the death of a designated beneficiary who succeeded the member in death, the member's individual account must be distributed to the designated beneficiary's estate. (6) To the extent allowed under the federal "Internal Revenue Code of 1986", as amended, the board may, but is not required to, provide by rule for loans or disaster distributions to members and for in-service distributions.

C.R.S. § 31-31.5-601 Modification of plan by the board

31-31.5-601. Modification of plan by the board. (1) Subject to the requirements set forth in subsection (2) of this section and notwithstanding any other provision of this article 31.5, the board may modify the statewide retirement plan as follows: (a) To modify the multiplier, retirement age, or service requirements for pension benefits set forth in part 4 of this article 31.5 with respect to the members of the defined benefit components if the modification does not require an increase in the employer and member contribution rates established pursuant to part 3 of this article 31.5 and if the board determines that the modification will maintain or enhance the actuarial soundness, as specified in section 31-31.5-101 (5)(a); and (b) To increase the member contribution rate above the rates established pursuant to part 3 of this article 31.5 with respect to the members of the statewide retirement plan if the increase does not require an increase in the employer contribution rate established pursuant to part 3 of this article 31.5. Any such increase in the member contribution rate is not subject to negotiation for payment by the employer. (c) To increase the contribution rates above the rates established pursuant to part 3 of this article 31.5 with respect to the members and employers of the statewide retirement plan if the rate of increase for the member and for the employer is equal. (2) Before modifying the plan pursuant to subsection (1) of this section, the board must find that: (a) The modification does not adversely affect the plan's status as a qualified plan pursuant to the federal "Internal Revenue Code of 1986", as amended; (b) The modification has been approved by sixty-five percent of the active members of the statewide retirement plan who are affected by the modification and who vote in an election proposing the modification; (c) The modification has been approved by more than fifty percent of the employers having active members covered by the statewide retirement plan that vote in the election proposing the modification, each employer to be assigned one vote; except that employers having both active police and active fire members in the plan shall be assigned two votes; and (d) The modification does not adversely affect the pension benefits of retired members. (3) Any increase in the member contribution rate established pursuant to this section shall be paid from a member's salary and otherwise be treated in the same manner specified in part 3 of this article 31.5 for required minimum member contributions for purposes of the federal "Internal Revenue Code of 1986", as amended. (4) The board may eliminate an increase in the member or the member and employer contribution rate increases established pursuant to this part 6 so long as the requirements for an increase set forth in subsection (2) of this section are met. (5) The board shall not adopt a modification that reduces the statewide retirement plan's age for normal retirement below that permitted by section 31-31.5-401 (2). (6) The board shall adopt rules setting forth the procedures for the elections required by subsections (2)(b) and (2)(c) of this section. Each employer having members in the statewide retirement plan shall comply with the procedures established by the board and shall certify the results of any member election to the board as prescribed by the board's rules. (7) A written copy of the language of any modifications to the statewide defined benefit plan or an increase in the member contribution rate adopted by the board pursuant to this section shall be kept and maintained by the board at its offices and be made available for copying and inspection by any interested party. e results of any member election to the board as prescribed by the board's rules. (7) A written copy of the language of any modifications to the statewide defined benefit plan or an increase in the member contribution rate adopted by the board pursuant to this section shall be kept and maintained by the board at its offices and be made available for copying and inspection by any interested party. (8) If at any time the cost of any modification adopted by the board pursuant to subsection (1)(a) of this section would require an increase in employer and member contributions made pursuant to part 3 of this article 31.5 or any higher member contribution rate established pursuant to subsection (1)(b) of this section, the board shall revoke the modification as it applies to active members of the statewide retirement plan pursuant to section 31-31.5-402. The board may reinstitute the modification at a later date, in its discretion, if reinstituting the modification would not require an increase in the employer and member contributions made pursuant to part 3 of this article 31.5.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-31.docxFetched: 10/6/2026