Measuring PERA's Health

How do we measure the financial health of PERA?

In 2015, the Colorado Legislature commissioned a series of studies to evaluate PERA. One of these studies helped create a clear measure of when to ring the alarm bells on the health of PERA. This “signal light study” provides an independent, color-coded alert system. For each color of the signal light, there is corresponding guidance on when we need to take action to protect this important Colorado investment.

PERA updates the signal light each year, following the release of its annual report. Last year, most of the divisions of PERA were in the yellow designation, meaning PERA should enhance its monitoring of the fund. Following the PERA Board’s response to changing conditions, most divisions are now in orange designation, meaning that a corrective action plan should be developed. And, this is just what PERA is doing—starting a dialogue about a potential action plan.

The graphic below illustrates the signal light study and its measurements of PERA’s health.

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This presentation explains recent Board actions and PERA’s funded status: