The University of Colorado aims to empower all employees to secure their financial stability in retirement. All eligible employees must participate in one of three mandatory plans, and as a state employer, some CU employees are eligible to participate in a Public Employees’ Retirement Association (PERA) plan.

PERA offers two plan options, a Defined Benefit (DB) plan and a Defined Contribution (DC) plan. This page covers the Defined Contribution plan, but you can read more about the Defined Benefit (DB) plan.

What is the PERA DC Retirement Plan?

The PERA DC plan is a defined contribution plan where an employee’s benefit amount at retirement is limited to the balance in their retirement account from all contributions and investment earnings or losses over the lifetime of their account (minus fees).

Both the employee and employer contribute to the account, and all funds are invested according to the directive of the employee.

Who is eligible for a PERA DC plan?

First, you need to know your job type. For retirement plan purposes, CU has two types of staff: Faculty and University Staff or Classified Staff. If you’re unsure what your job classification is, you can find it on your offer letter or you can contact your supervisor or the Employee Services Benefits office.

Classified Staff

For Classified Staff with no prior PERA-covered employment, you have 60 days to choose between the PERA DB or PERA DC plan. Once you’ve chosen, this selection cannot be reversed. 

For Classified Staff with prior PERA-covered employment, you will default into whichever plan you were previously enrolled in unless you have not contributed to that plan in the previous 12 months. If you have not contributed to your PERA plan in at least 12 months, you will have 60 days to choose which type of PERA plan to enroll in. 

For placement details, see the Classified Staff Placement Guide.

Faculty and University Staff

Faculty and University Staff are not eligible for PERA DC.

For placement details, see the Mandatory Retirement Plan Placement Guide for Faculty and University Staff.

 

PERA DC Plan at-a-glance

Plan administrator

Public Employees’ Retirement Association (PERA)

Who can participate?

Eligible Classified Staff 

Employee contributions

10.5% of PERA includable salary (gross income less any IRS Section 125 plan deductions, based upon your PERA membership)

Employee contributions are not subject to Social Security taxes, and they are tax-deferred, which means they are not considered taxable income for federal and state income tax purposes until they are withdrawn. 

Employer contributions

10.9% of gross salary to employee’s account.

In addition, according to state law, the university contributes 5.0% to PERA AED, plus 5.0% PERA Supplemental AED, which equals 20.9% of an employee’s PERA-includable salary.

Salary Limitation

The annual compensation limit that can be considered for contributions is $290,000 for calendar year 2021.

Vesting

The vesting schedule is determined by number of years of participation, not PERA service credit.

  • Employee Contributions: 100% immediately
  • Employer’s Contributions:
    • 50% immediately**
    • 60% at the end of 1 year of participation**
    • 70% at the end of 2 years of participation**
    • 80% at the end of 3 years of participation**
    • 90% at the end of 4 years of participation**
    • 100% at the end of 5 years of participation**

**Plus/minus investment gains/losses, minus fees

Investments

Employees can choose their investments by going to the PERA website Defined Contribution (DC) Plan Information page. From there, click on the “Determine how your PERA DC Plan contributions will be invested.”

Default investment: If you do not select investments options, your money will automatically be placed into a PERAdvantage Target Retirement Date fund based on your date of birth and an expected retirement date. PERA follows industry standard and assumes the expected retirement age is 65. 

Fees

This plan includes administrative fees. Please contact PERA for more details.