For PERA Eligible & Grandfathered Employees Who Take Cash Instead of Benefits
Cash received for waiving benefits (ie: Cash in Lieu of Benefits) or cash received for excess benefit credits is now PERA includable (that means PERA uses those dollars when they calculate how much you will pay into your PERA account). Both employees and DPS will pay a PERA contribution on these funds. This change will increase your highest average salary but will decrease your take home pay.
Definitions:
Pre-tax: this means that your benefit deductions come out of your salary before your income tax is calculated and deducted. This ultimately saves you some dollars on income taxes, but also lowers your Highest Average Salary with PERA.
Post-tax: this means that your benefit deductions come out of your salary after your income tax is calculated. This means that you pay more in taxes, but PERA counts your full salary towards your Highest Average Salary.
Highest Average Salary: this is the amount that PERA uses when they calculate your retirement payments. Visit CO PERA to learn more about your PERA benefits and how your Highest Average Salary is calculated.
For more information on why these changes occured, please contact PERA at 303-832-9550 or 1-800-759-7372 Monday–Thursday, 7:00 a.m. to 5:30 p.m.; Friday, 7:00 a.m. to 4:30 p.m. (Mountain time)
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My Benefit Costs are more than my Benefit Credits: I receive no cash back |
My Benefit Costs are less than my Benefit Credits: I receive some cash back |
I waive my benefits and receive all my benefit credits as cash |
I was PERA Eligible Before |
$1000 salary $900 PERA-includable salary |
$1000 salary $1,100 PERA-includable salary |
$1000 salary $1,300 PERA-includable salary |
I was PERA Eligible On or After |
$1000 salary $1000 PERA-includable salary Estimated PERA Cost: |
$1000 salary $1,100 PERA-includable salary |
Not Applicable
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