Colorado Legislative Council Staff
NO FISCAL IMPACT
January 5, 1999
House Local Government
Steve Tammeus (303-866-2756)
TITLE: CONCERNING THE APPLICATION OF SECTION 415 OF THE FEDERAL "INTERNAL REVENUE CODE OF 1986", AS AMENDED, TO THE PUBLIC EMPLOYEES' RETIREMENT ASSOCIATION, AND, IN CONNECTION THEREWITH, MODIFYING THE PROVISIONS GOVERNING THE PURCHASE OF SERVICE CREDIT TO CONFORM TO FEDERAL LAW.
Summary of Assessment
This bill modifies statutory provisions governing the purchase of service credit for members of the Public Employees' Retirement Association (PERA) who first become members on or after January 1, 1999. The bill requires these members have five years of earned service credit before becoming eligible to purchase credit for noncovered employment that is "nonqualified service", and limits purchases of service credit for nonqualified service to a maximum of five years. The bill specifies that no contributions by PERA members to purchase service credit or to make direct payments shall be made to cause certain limits in Section 415 of the federal internal revenue code to be exceeded. The bill will become effective upon the signature of the Governor.
This bill conforms state law to recently enacted federal limits on the purchase of service credit for nonqualified service by certain employees. Any members who elect to purchase service credit will pay the costs; PERA employers will incur no additional costs. Additionally, the provisions of this bill will not affect the actuarial soundness of the PERA fund. Therefore, this bill is assessed as having no fiscal impact.
Personnel Public Employees' Retirement Association