First Regular Session Sixty-ninth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 13-0438.01 Gregg Fraser x4325 SENATE BILL 13-055 SENATE SPONSORSHIP Lambert, HOUSE SPONSORSHIP Saine, Senate Committees House Committees State, Veterans, & Military Affairs A BILL FOR AN ACT Concerning methods to increase the actuarial soundness of the public employees' retirement 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.) For the public employees' retirement association (PERA), current law specifies that a maximum amortization period of 30 years is deemed actuarially sound. The bill specifies that this assumes a discount rate equal to the state's long-term debt interest rate. The bill modifies the circumstances in which employer or member contribution rates are adjusted, requiring the general assembly to adjust employer or member contribution rates as necessary to maintain each PERA division trust fund as actuarially sound. The bill requires the PERA board to annually submit recommendations to the general assembly regarding methods to respond to decreases in asset values, to decrease amortization periods, and to ensure full funding. An annual public comprehensive financial report is also required. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, amend 24-51-211 as follows: 24-51-211. Amortization of liabilities. (1) An amortization period for each of the state division, school division, local government division, judicial division, and Denver public schools division trust funds shall be calculated separately. A maximum amortization period of thirty years, assuming a discount rate equal to the state's long-term debt interest rate, shall be deemed actuarially sound. Upon recommendation of the board, and with the advice of the actuary, the employer or member contribution rates for the plan may be adjusted by the general assembly when indicated by actuarial experience. The general assembly shall have the authority to adjust employer or member contribution rates as necessary to maintain each division trust fund as actuarially sound. (2) On or before November 1, 2009, November 1, 2013, and each November 1 thereafter, the board shall submit specific, comprehensive recommendations to the general assembly regarding possible methods to respond to the decrease in the value of the association's assets, including real estate, private equity, and other investments, to decrease the amortization period of each division of the association, and to ensure that each division of the association will become and remain fully funded. On or before May 31 of each year following the submission of the recommendations to the general assembly, the board shall make public an annual comprehensive financial report. 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, 2013, if adjournment sine die is on May 8, 2013); 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 2014 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.