SENATE 3rd Reading Unamended February 17, 2015 SENATE Amended 2nd Reading February 13, 2015First Regular Session Seventieth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 15-0513.01 Nicole Myers x4326 SENATE BILL 15-080 SENATE SPONSORSHIP Hill, HOUSE SPONSORSHIP Lundeen, Senate Committees House Committees Finance A BILL FOR AN ACT Concerning the choice of public employees' retirement association members to participate in the defined contribution plan established by the association. 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.) The public employees' retirement association (PERA) administers a defined benefit retirement plan and a defined contribution retirement plan. Currently, only specified state employees are allowed to participate in PERA's defined contribution plan. The bill allows all employees who are hired by a PERA-affiliated employer on or after January 1, 2016, to opt to participate in the defined contribution plan rather than the defined benefit plan. Newly eligible employees are given an initial period to elect to join the defined contribution plan. Thereafter, employees are subject to the existing laws governing participation and termination of membership in the defined benefit and defined contribution plans. In addition, beginning on January 1, 2016, the bill allows any employee who is a PERA member and who participates in the defined benefit plan to make a written election during the annual open enrollment period for the state employees group benefit plan to participate in PERA's defined contribution plan. The written election is irrevocable and effective the first day of the annual state employees group benefit plan year. An employee who elects to participate in the defined contribution plan is required to specify whether he or she wants to: Terminate future defined benefit contributions while maintaining his or her rights relative to any contributions or benefits accrued prior to such election; or Terminate membership in the defined benefit plan and require PERA to pay all member contributions, accrued interest on such contributions, and matching employer contributions to the defined contribution plan. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 24-51-1501, amend (1), (2) (a) (I), and (4) as follows: 24-51-1501. Defined contribution plan - establishment - creation of fund - definitions. (1) The board is hereby authorized to establish and administer a defined contribution plan for eligible state employees as provided in this part 15. The board shall establish the terms and conditions of the association's defined contribution plan offered to eligible state employees. The assets of the plan shall be held in a separate trust fund of the association created for such purpose. (2) (a) Effective July 1, 2009: (I) The state defined contribution plan established pursuant to part 2 of article 52 of this title, as said part 2 existed prior to its repeal in 2009, shall be merged into the association's defined contribution plan for eligible state employees established under this part 15, and all the assets of the state defined contribution plan and the trust fund shall be transferred via trustee-to-trustee transfer to the defined contribution plan trust fund established pursuant to section 24-51-208 (1) (i); (4) For purposes of this part 15: (a) Prior to January 1, 2016, "employer" means the state, the general assembly, the office of a district attorney in a judicial district, any state department that employs an eligible employee, and any community college governed by the state board for community colleges and occupational education. "Employer" shall not include any state college or university as defined in section 24-54.5-102 (7), any institution under the control of the board of regents of the university of Colorado, or an institution governed pursuant to part 5 of article 21 of title 23, C.R.S. (b) On and after January 1, 2016, "employer" has the same meaning as set forth in section 24-51-101 (20). SECTION 2. In Colorado Revised Statutes, 24-51-1502, amend (3) as follows: 24-51-1502. New employees - election - definitions. (3) An eligible employee hired by an employer on or after May 2, 2009, by an employer as defined in section 24-51-1401 (4) (a) or hired on or after January 1, 2016, by an employer as defined in section 24-51-1501 (4) (b) is eligible for the election pursuant to subsection (1) of this section. SECTION 3. In Colorado Revised Statutes, add 24-51-1506.7 as follows: 24-51-1506.7. Additional choices for employees who participate in the association's defined benefit plan. (1) Notwithstanding the provisions of section 24-51-1506.5, effective January 1, 2016, any active member of the association may, as long as the member is employed in a position with an employer for which the association's defined contribution plan is available, make a written election during the annual open enrollment period for the applicable employees group benefit plan of any year to participate in the association's defined contribution plan. Such election is irrevocable. The written election shall be effective the first day of the annual applicable employees group benefit plan year. In the absence of such written election, the employee shall be a member of the association's defined benefit plan. (2) Any employee who elects to participate in the association's defined contribution plan pursuant to subsection (1) of this section shall specify one of the following options: (a) To terminate future defined benefit contributions beginning on the date of election while maintaining rights as provided by the laws applicable to the association relative to any contributions or benefits accrued prior to such election; or (b) To terminate membership in the association's defined benefit plan and require payment by the association of all member contributions, accrued interest on such contributions, and matching employer contributions, as provided by the laws applicable to the association, to the association's defined contribution plan. Such election constitutes a waiver of all rights and benefits provided by the association. Within ninety days after receipt of notice of an election to terminate membership pursuant to this paragraph (b), the association shall pay to the association's defined contribution plan an amount equal to the employee's member contributions plus accrued interest calculated pursuant to section 24-51-407 and matching employer contributions paid pursuant to section 24-51-408. SECTION 4. 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 5, 2015, if adjournment sine die is on May 6, 2015); 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 2016 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.