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Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
REENGROSSED
This Version Includes All Amendments
Adopted in the House of Introduction
LLS NO. 26-0198.02 Caroline Martin x5902 HOUSE BILL 26-1026
House Committees Senate Committees
Finance
Appropriations
A BILL FOR AN ACT
CONCERNING AN EXPANSION OF PLAN OPTIONS FOR THE PUBLIC101
EMPLOYEES' RETIREMENT ASSOCIATION.102
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://leg.colorado.gov.)
Under current law, a member of the public employees' retirement
association (PERA) earns service credit for each year worked during
which the member makes contributions to PERA. A member may
purchase additional years of service credit for any previous period of
public or private employment during which the member was not making
contributions to PERA, subject to certain conditions. Sections 1 and 3 of
HOUSE
3rd Reading Unamended
March 5, 2026
HOUSE
2nd Reading Unamended
March 3, 2026
HOUSE SPONSORSHIP
Marshall and Hamrick, Camacho, Carter, Clifford, Go ldstein, Gonzalez R., Joseph,
Lieder, Lindsay, Nguyen, Phillips, Rutinel, Titone, Valdez
SENATE SPONSORSHIP
Kolker,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
the bill allow a member of PERA to also purchase service credit for
previous periods of unemployment during which the member was 21
years old or older, subject to certain conditions. Sections 2, 3, 4, and 7
make conforming amendments.
Sections 5 and 6 require PERA's voluntary investment program to
include options for an employee to make tax-deferred voluntary
contributions and Roth voluntary contributions to the program and make
other conforming changes.
Sections 8 and 9 require PERA employers to affiliate with PERA's
deferred compensation plan and offer the plan to employees. The sections
require the deferred compensation plan to include options for an
employee to make pre-tax voluntary contributions and Roth voluntary
contributions to the plan and make other conforming changes.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 24-51-101, add2
(33.3), (33.5), and (37.5) as follows:3
24-51-101. Definitions.4
As used in this article 51, unless the context otherwise requires and5
except as otherwise defined in part 17 of this article 51:6
(33.3) "N ONCOVERED TIME " MEANS TIME DURING WHICH A7
MEMBER WAS NOT EARNING SERVICE CREDIT FROM THE ASSOCIATION.8
(33.5) "NONQUALIFIED SERVICE" MEANS NONCOVERED TIME THAT9
IS NONQUALIFIED SERVICE CREDIT PURSUANT TO SECTION 415 (n)(3)(C) OF10
THE FEDERAL "INTERNAL REVENUE CODE OF 1986".11
(37.5) "QUALIFIED SERVICE" MEANS NONCOVERED TIME THAT IS12
NOT NONQUALIFIED SERVICE CREDIT PURSUANT TO SECTION 415 (n)(3)(C)13
OF THE FEDERAL "INTERNAL REVENUE CODE OF 1986".14
SECTION 2. In Colorado Revised Statutes, 24-51-208, amend 15
(1) introductory portion, (1)(f), and (1)(f.5) as follows:16
24-51-208. Allocation of money.17
(1) The money of the association shall MUST be divided into18
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several trust funds, including, but not limited to:1
(f) The health care trust fund, created pursuant to the provisions2
of section 24-51-1201 (1), which consists of a portion of the employer3
contributions equal to one and two one-hundredths percent of member4
salaries; a portion of the amount paid by members to purchase service5
credit relating to noncovered employment TIME as determined pursuant6
to section 24-51-505 (7); thirty percent of the amount of any reduction in7
the employer contribution rates as determined in section 24-51-408.5 (5)8
to amortize any overfunding in each division's trust fund; deductions of9
premium amounts from monthly benefits of participating benefit10
recipients; premiums paid directly to the trust fund by participating11
benefit recipients, members, and dependents; monthly payments made by12
employers on behalf of participating benefit recipients, members, and13
dependents; and interest; in addition to a proportional share of investment14
income earned thereon;15
(f.5) The Denver public schools division health care trust fund,16
created pursuant to the provisions of section 24-51-1201 (2), which17
consists of a portion of the employer contributions equal to two-tenths of18
one percent of member salaries; a portion of the amount paid by members19
to purchase service credit relating to noncovered employment TIME as20
determined pursuant to section 24-51-505 (7); deductions of premium21
amounts from monthly benefits of participating benefit recipients;22
premiums paid directly to the trust fund by participating benefit23
recipients, members, and dependents; monthly payments made by24
employers on behalf of participating benefit recipients, members, and25
dependents; and interest; in addition to a proportional share of investment26
income earned thereon;27
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SECTION 3. In Colorado Revised Statutes, 24-51-501, amend1
(6) as follows:2
24-51-501. Earned service credit.3
(6) Service credit of DPS members prior to or on December 31,4
2009, shall be IS governed by section 24-51-1710. Beginning January 1,5
2010, DPS members shall earn service credit pursuant to this section and6
shall MAY purchase service credit relating to a refunded member7
contribution account and noncovered employment TIME pursuant to this8
part 5; except that purchases by DPS members that are ongoing as of9
January 1, 2010, shall be ARE governed by section 24-51-1705.10
SECTION 4. In Colorado Revised Statutes, 24-51-505, amend11
(1), (2), (3), (6), and (7) as follows:12
24-51-505. Purchase of service credit relating to noncovered13
time. 14
(1) A MEMBER MAY PURCHASE service credit may be purchased for15
any period of previous employment with any public or private employer16
in the United States, its territories, or any foreign country NONCOVERED17
TIME subject to the following conditions:18
(a) If the service credit to be purchased is for noncovered19
employment with an employer affiliated with the association, the member20
must have A MEMBER MAY PURCHASE SERVICE CREDIT FOR QUALIFIED21
SERVICE IF THE MEMBER:22
(I) H AS AT LEAST one year of earned service credit with the23
association at the time of the purchase; If the service credit to be24
purchased is for previous employment with a nonaffiliated employer, the25
member must have one year of earned service credit with the association26
at the time of the purchase; except that, if the previous employment for27
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which the service credit is to be purchased is nonqualified service, as1
defined in section 415 (n)(3)(C) of the federal "Internal Revenue Code of2
1986", as amended, and the member first became a member of the3
association on or after January 1, 1999, the member must have five years4
of earned service credit with the association at the time of the purchase.5
AND6
(II) PROVIDES THE ASSOCIATION WITH DOCUMENTATION OF THE7
DATES OF EMPLOYMENT AND A RECORD OF SALARY RECEIVED.8
(a.3) A MEMBER WHO BECAME A MEMBER OF THE ASSOCIATION9
BEFORE JANUARY 1, 1999, MAY PURCHASE SERVICE CREDIT FOR10
NONQUALIFIED SERVICE IF THE MEMBER HAS AT LEAST ONE YEAR OF11
EARNED SERVICE CREDIT WITH THE ASSOCIATION AT THE TIME OF THE12
PURCHASE.13
(a.5) A MEMBER WHO BECAME A MEMBER OF THE ASSOCIATION ON14
OR AFTER JANUARY 1, 1999, MAY PURCHASE SERVICE CREDIT FOR15
NONQUALIFIED SERVICE IF THE MEMBER HAS AT LEAST FIVE YEARS OF16
EARNED SERVICE CREDIT WITH THE ASSOCIATION AT THE TIME OF THE17
PURCHASE.18
(a.7) A MEMBER MAY NOT PURCHASE SERVICE CREDIT FOR19
NONCOVERED TIME DURING WHICH THE MEMBER WAS NOT EMPLOYED AND20
WAS UNDER TWENTY-ONE YEARS OLD. A MEMBER MAY PURCHASE SERVICE21
CREDIT FOR NONCOVERED TIME DURING WHICH THE MEMBER WAS22
EMPLOYED AND WAS UNDER TWENTY -ONE YEARS OLD IF THE MEMBER23
PROVIDES THE ASSOCIATION WITH DOCUMENTATION OF THE DATES OF24
EMPLOYMENT AND A RECORD OF SALARY RECEIVED.25
(b) The member must provide documentation of the dates of26
employment and a record of salary received.27
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(c) The A member must provide certification from any retirement1
program covering such THE MEMBER'S employment that the service credit2
to be purchased has not vested with that program, DOES NOT CAUSE A3
MEMBER TO RECEIVE A RETIREMENT BENEFIT FOR THE SAME SERVICE4
UNDER MORE THAN ONE PLAN, except to the extent otherwise required by5
federal law.6
(2) (a) Except as otherwise provided in paragraph (b) of this7
subsection (2) THIS SUBSECTION (2), one year of service credit may be8
purchased for each year of noncovered employment TIME. ANY SERVICE9
CREDIT PURCHASED FOR NONCOVERED TIME DURING WHICH A MEMBER10
WAS EMPLOYED MUST BE determined pursuant to the provisions of section11
24-51-501 (2) to (4) applicable to earned service credit.12
(b) Members A MEMBER who first became members A MEMBER on13
or after January 1, 1999, may purchase no more than five years of service14
credit for noncovered TIME employment that is nonqualified service. as15
defined in section 415 (n)(3)(C) of the federal "Internal Revenue Code of16
1986", as amended17
(c) Members A MEMBER who initiate INITIATES a purchase on or18
after November 1, 2003, may not purchase service credit that would cause19
the total years of noncovered service TIME purchased during their20
membership to exceed ten years. This limit shall not apply to members A21
MEMBER who provide PROVIDED all required documentation of previous22
service to the association by October 31, 2003, together with application23
to purchase the service if the purchase is successfully completed pursuant24
to the service credit purchase agreement resulting from said THE25
application.26
(d) Members A MEMBER employed by a public entity affiliated27
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with the association pursuant to section 24-51-309 may purchase service1
credit for years employed by the entity without limit, if the purchase is2
completed before the member terminates employment with the entity, and3
any such purchase for years employed by the entity in excess of ten years4
is completed or installment payments initiated within three years after the5
date the employer affiliates with the association or November 1, 2006,6
whichever is later, UNLESS OTHERWISE RESTRICTED UNDER FEDERAL LAW.7
(3) The cost to purchase service credit for noncovered8
employment TIME shall be determined by the board and shall be sufficient9
to pay the actuarial liability associated with the purchase.10
(6) Service credit purchased pursuant to the provisions of this11
section for periods of nonmembership shall NONCOVERED TIME MUST not12
be credited toward the earned service credit requirement for disability13
retirement benefits OR SHORT-TERM DISABILITY PROGRAM PAYMENTS as14
provided for in part 7 of this article ARTICLE 51 or TOWARD the earned15
service credit requirement for survivor benefit coverage as provided for16
in part 9 of this article ARTICLE 51.17
(7) A portion of the amount paid by a member to purchase service18
credit related to noncovered employment shall TIME MUST be transferred19
PAID to the health care trust fund. on the effective date of the member's20
retirement or, in case of death prior to retirement, on the effective date of21
the survivor benefit The amount transferred shall be one and two22
one-hundredths percent of PAID TO THE HEALTH CARE TRUST FUND MUST23
BE THE SAME PERCENTAGE OF THE MEMBER 'S SALARY PAID BY THE24
EMPLOYER CONTRIBUTION SPECIFIED IN SECTION 24-51-208 (1)(f),25
DETERMINED USING the member's highest average salary at the time of the26
purchase. with interest at the rate specified in section 24-51-101 (28)(a)27
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ANY REFUND PURSUANT TO SECTION 24-51-506 (3) OR (4) WILL BE PAID1
FROM THE MEMBER'S APPLICABLE DIVISION TRUST FUND AND WILL NOT BE2
PAID FROM THE HEALTH CARE TRUST FUND.3
SECTION 5. In Colorado Revised Statutes, 24-51-1401, amend4
(2) and (4); and repeal (3) as follows:5
24-51-1401. Voluntary investment program established and6
fund created - definitions.7
(2) The voluntary investment program shall ESTABLISHED8
PURSUANT TO THIS SECTION MUST:9
(a) Be available to all members DPS members, retirees, and DPS10
retirees; and shall EMPLOYEES OF AN EMPLOYER;11
(b) Be in addition to any other retirement or tax-deferred12
compensation system established by the state or its political subdivisions;13
AND14
(c) I NCLUDE OPTIONS FOR AN EMPLOYEE OF AN EMPLOYER TO15
MAKE TAX -DEFERRED VOLUNTARY CONTRIBUTIONS AND ROTH16
VOLUNTARY CONTRIBUTIONS TO THE VOLUNTARY INVESTMENT PROGRAM. 17
(3) The board is hereby authorized to offer participation in the18
voluntary investment program to all employees of employers that are19
affiliated with the association, regardless of whether those employees are20
members or retirees.21
(4) For purposes of this part 14, members and retirees shall22
include DPS members and DPS retirees THE TERM "MEMBER" INCLUDES23
A DPS MEMBER AND THE TERM "RETIREE" INCLUDES A DPS RETIREE. 24
SECTION 6. In Colorado Revised Statutes, 24-51-1402, amend25
(1), (3), and (4); and repeal (2) as follows:26
24-51-1402. Contributions to the voluntary investment27
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program.1
(1) An eligible employee pursuant to section 24-51-1401 OF AN2
EMPLOYER may participate in the voluntary investment program3
authorized in section 24-51-1401 by authorizing his or her THEIR4
employer as defined in section 24-51-101 (20), to contribute an amount5
by payroll deduction in lieu of receiving such am ount as salary or pay.6
The amount of such contribution by a participant shall be IS subject to any7
limitations established by federal law. These voluntary contributions, in8
addition to investment earnings, shall be exempt from federal and state9
income taxes until the ultimate distribution of such contributions has been10
made to the participant, member, former member, or beneficiary.11
(2) The board may, at its discretion, allow participants in the12
voluntary investment program to elect to make after-tax voluntary13
contributions to the voluntary investment program by payroll deduction.14
Investment earnings on such contributions are exempt from federal and15
state income taxes until the ultimate distribution of such contributions has16
been made to the participant, member, former member, or beneficiary.17
(3) All voluntary contributions by a participating member shall OR18
RETIREE MUST be included in the salary of such member THE MEMBER OR19
RETIREE for the purpose of calculating member, WORKING RETIREE, and20
employer contributions pursuant to the provisions of section 24-51-401.21
The member contribution provisions of section 24-51-401 and the22
matching employer contribution provisions of section 24-51-408.5 shall23
not apply to any voluntary contribution made by a retiree.24
(4) The employer shall deliver all voluntary contributions to the25
VOLUNTARY INVESTMENT PROGRAM VIA THE ASSOCIATION, OR THE service26
provider designated by the association, IF APPLICABLE, within five days27
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after the date that the participants are paid and consistent with the1
provisions of section 24-51-401 (1.7)(c) and (1.7)(d).2
SECTION 7. In Colorado Revised Statutes, 24-51-1506, amend3
(2) as follows:4
24-51-1506. Additional choices within first five years.5
(2) A member who elects to join the defined benefit plan pursuant6
to subsection (1) of this section may, upon meeting the requirements of7
section 24-51-505, purchase service credit for the period of employment8
covered by the defined contribution plan. The cost to purchase such9
service shall be IS the same as the cost determined by the board for the10
purchase of noncovered employment TIME. The member may elect to have11
any portion of the member's account paid from the defined contribution12
plan to the defined benefit plan to facilitate the purchase of service credit13
through a direct rollover in accordance with section 401 (a)(31) of the14
federal "Internal Revenue Code of 1986". as amended The member may15
not be vested in the defined contribution plan upon purchasing service16
credit for employment that was covered by the defined contribution plan.17
SECTION 8. In Colorado Revised Statutes, amend 24-51-160218
as follows:19
24-51-1602. Affiliation with the deferred compensation plan.20
(1) An employee is not eligible to participate in the deferred21
compensation plan authorized in section 24-51-1601 unless his or her22
employer is affiliated with such plan. 23
(2) An EACH employer as defined in section 24-51-101 (20), may24
SHALL affiliate with the deferred compensation plan. by making25
application to the association. All applications shall be subject to approval26
by the association. Upon affiliation, employees of the employer are27
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eligible to begin deferring salary to the deferred compensation plan.1
(2.5) T HE DEFERRED COMPENSATION PLAN ESTABLISHED2
PURSUANT TO SECTION 24-51-1601 MUST:3
(a) BE IN ADDITION TO ANY OTHER RETIREMENT OR TAX-DEFERRED4
COMPENSATION SYSTEM ESTABLISHED BY THE STATE OR ITS POLITICAL5
SUBDIVISIONS; AND6
(b) I NCLUDE OPTIONS FOR AN EMPLOYEE TO MAKE PRE -TAX7
VOLUNTARY CONTRIBUTIONS AND ROTH VOLUNTARY CONTRIBUTIONS TO8
THE DEFERRED COMPENSATION PLAN.9
(3) N OTWITHSTANDING SUBSECTION (2) OF THIS SECTION , all10
employers that are affiliated with the deferred compensation plan prior to11
July 1, 2009, including entities that are not affiliated employers of the12
association, as employer is defined in section 24-51-101 (20), shall13
remain affiliated and shall not have to apply to the association pursuant14
to subsection (2) of this section WITH THE DEFERRED COMPENSATION15
PLAN.16
(4) Any employee who is employed by an entity that is affiliated17
with the deferred compensation plan shall be IS entitled to participate in18
the plan regardless of whether that individual EMPLOYEE is a member or19
retiree of the association.20
SECTION 9. In Colorado Revised Statutes, 24-51-1603, amend21
(1), (2), and (3) as follows:22
24-51-1603. Contributions to the deferred compensation plan.23
(1) An employee of an employer affiliated with the deferred24
compensation plan pursuant to section 24-51-1602 (2) or (3) may25
participate in the deferred compensation plan authorized in section26
24-51-1601 by electing with his or her THEIR employer to defer receipt of27
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salary by specifying an amount contributed by payroll deduction. The1
amount of such deferral by the employee shall be IS subject to any2
limitations established by federal law. The amount deferred, including3
investment earnings, shall be exempt from federal and state income taxes4
until the ultimate distribution of such contributions has been made to the5
participant, former participant, or beneficiary.6
(2) All voluntary deferrals by a participating member shall OR7
RETIREE MUST be included in the salary of such member THE MEMBER OR8
RETIREE in accordance with section 24-51-101 (42) for the purpose of9
calculating member, WORKING RETIREE , and employer contributions10
pursuant to the provisions of section 24-51-401. The member contribution11
provisions of section 24-51-401 shall not apply to any deferral made by12
a retiree.13
(3) Consistent with the provisions of section 24-51-401 (1.7)(c)14
and (1.7)(d), the AN employer shall deliver all deferred compensation15
contributions to the trust fund via THE ASSOCIATION OR the service16
provider designated by the association, if applicable, within five days17
after the date the employees are paid.18
SECTION 10. Act subject to petition - effective date. This act19
takes effect January 1, 2027; except that, if a referendum petition is filed20
pursuant to section 1 (3) of article V of the state constitution against this21
act or an item, section, or part of this act within the ninety-day period22
after final adjournment of the general assembly, then the act, item,23
section, or part will not take effect unless approved by the people at the24
general election to be held in November 2026 and, in such case, will take25
effect January 1, 2027, or on the date of the official declaration of the26
vote thereon by the governor, whichever is later.27
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