HOUSE 3rd Reading Unamended March 15, 2012 HOUSE Amended 2nd Reading March 9, 2012Second Regular Session Sixty-eighth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 12-0156.01 Gregg Fraser x4325 HOUSE BILL 12-1150 HOUSE SPONSORSHIP Priola, Holbert, DelGrosso, Gardner B., Becker, Murray, Nikkel, Sonnenberg SENATE SPONSORSHIP Lambert, House Committees Senate Committees Finance A BILL FOR AN ACT Concerning an increase in the number of years used to calculate the highest average salary of a member of the public employees' retirement association for the purpose of determining the amount of the member's retirement benefit. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) Current law averages the 3 highest annual salaries of a member of the public employees' retirement association when calculating that member's retirement benefit amount. The bill increases the number of highest annual salaries used from 3 to 7 for members who are first eligible to retire on or after January 1, 2013. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 24-51-101, amend (25) (a) (I), (25) (a) (II), and (25) (b) (V); and add (25) (b) (VI) as follows: 24-51-101. Definitions. As used in this article, unless the context otherwise requires and except as otherwise defined in part 17 of this article: (25) (a) "Highest average salary" means: (I) (A) For a member or inactive member eligible for service or reduced service retirement prior to January 1, 2013, one-twelfth of the average of the highest annual salaries upon which contributions were paid, whether earned from one or more employers, that are associated with three periods of twelve consecutive months of service credit; or (B) For a member or inactive member hired on or after January 1, 2013, one-twelfth of the average of the highest annual salaries upon which contributions were paid, whether earned from one or more employers, that are associated with seven periods of twelve consecutive months of service credit. (II) For a member who does not have the requisite three years of service credit, one-twelfth of the average of the total annual salaries earned during membership upon which contributions were paid; (b) (V) Notwithstanding any other provision of this paragraph (b), in calculating highest average salary for a member or inactive member who was not eligible for service or reduced service retirement on January 1, 2011, but who was eligible for service or reduced service retirement prior to January 1, 2013, the association shall determine the highest annual salaries associated with four periods of twelve consecutive months of service credit. The lowest of such annual salaries shall be the base salary. The first annual salary to be used in the highest average salary calculation shall be the actual salary reported up to one hundred eight percent of the base salary. The second annual salary to be used in the highest average salary calculation shall be the actual salary reported up to one hundred eight percent of the first annual salary used in the highest average salary calculation. The third annual salary to be used in the highest average salary calculation shall be the actual salary reported up to one hundred eight percent of the second annual salary used in the highest average salary calculation. This subparagraph (V) shall not apply to members of the judicial division, except for DPS members of the judicial division who have exercised portability pursuant to section 24-51-1747 and selected the Denver public schools benefit structure. This subparagraph (V) shall apply to DPS members in accordance with section 24-51-1702 (17). (VI) Notwithstanding any other provision of this paragraph (b), in calculating highest average salary for a member or inactive member hired on or after January 1, 2013, the association shall determine the highest annual salaries associated with eight periods of twelve consecutive months of service credit. The lowest of such annual salaries shall be the base salary. The first annual salary to be used in the highest average salary calculation shall be the actual salary reported up to one hundred eight percent of the base salary. The second annual salary to be used in the highest average salary calculation shall be the actual salary reported up to one hundred eight percent of the first annual salary used in the highest average salary calculation. The third annual salary to be used in the highest average salary calculation shall be the actual salary reported up to one hundred eight percent of the second annual salary used in the highest average salary calculation. The fourth annual salary to be used in the highest average salary calculation shall be the actual salary reported up to one hundred eight percent of the third annual salary used in the highest average salary calculation. The fifth annual salary to be used in the highest average salary calculation shall be the actual salary reported up to one hundred eight percent of the fourth annual salary used in the highest average salary calculation. The sixth annual salary to be used in the highest average salary calculation shall be the actual salary reported up to one hundred eight percent of the fifth annual salary used in the highest average salary calculation. The seventh annual salary to be used in the highest average salary calculation shall be the actual salary reported up to one hundred eight percent of the sixth annual salary used in the highest average salary calculation. This subparagraph (VI) shall not apply to members of the judicial division, except for DPS members of the judicial division who have exercised portability pursuant to section 24-51-1747 and selected the Denver public schools benefit structure. This subparagraph (VI) shall apply to DPS members in accordance with section 24-51-1702 (17). SECTION 2. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 7, 2012, if adjournment sine die is on May 9, 2012); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2012 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.