The following three bills recommended by the FPPA Board of Directors to the Pension Reform Commission made their way through the 2002 Legislative Session and were signed by the Governor.

The purpose of these summaries are informational and cannot be relied upon as the ultimate declaration of benefits under a plan or the law in Colorado. Please consult the actual legislation.

Actual legislation of the following bills are available

• by visiting the State of Colorado Legislative Web Site at: http://www.state.co.us/gov_dir/stateleg.html . Once there, click on either the bills for the House or Senate and you will be taken to a list of bills and current status.

• or by calling FPPA at (303) 770-3772 for a copy to be sent to you.
  

Signed by the Governor: April 3, 2002
Effective date: Effective for disability retirements granted after October 1, 2002.

This proposed bill will accomplish the following:

• Creation of a “permanent occupational disability” with a flat 50% of base salary benefit with:
  • No prognosis for improvement
  • No reexamination
  • Regular offsets for SRA and Money Purchase balances and for earned income
    
• Creation of a “temporary occupational disability” with a flat 40% of base salary benefit with:
  • Periodic reexamination required
  • Board may require treatment, counseling or therapy
  • Burden on the member to show compliance with Board direction and continuing disabling condition
  • 5 year maximum benefit
  • May be upgraded to permanent occupational or total disability
  • No SRA or Money Purchase offsets for benefit
  • Family is eligible for survivor benefits if member dies while on temporary occupational disability
  • If the disability ceases to exist and the member is restored
    to active service, FPPA will transfer from the death and disability fund the contribution required to fund the defined contribution plan or to fund service credit under the defined benefit plan for period of time the member was on temporary occupational disability (16% per year maximum). If a defined contribution plan’s normal contribution amount is above 16%, the employer will make up the difference.
  • If the member reaches age and service, including time on disability, under a defined benefit plan or 25 years of service and age 55 under a defined contribution plan while on temporary occupational disability, FPPA will transfer from the death and disability fund the final contributions necessary for member to earn full service credit and the member will be granted a normal retirement in lieu of continued disability retirement (16% per year maximum). If a defined contribution plan’s normal contribution amount is above 16%, the employer will make up the difference.
    
• Family option on total and permanent occupational disability to specifically include adult dependent incapacitated children
• Determination of disability can include consideration of any relevant evidence by Board
• Annual cost of living adjustments up to 3 % to be determined by the Board with no consumer price index limitation for occupational disability and survivor benefits and an automatic 3 % benefit increase for total disability
• Offsets for local SRA’s for total and permanent occupational disability benefits and survivor benefits
• Permanent occupational disability benefit payment options would be the same as total disability benefit payment options
• Statute of Limitations for applying for a disability benefit would be 180 days from the last day on the payroll
• Member can waive their right to reinstatement during application process
• Employers submit statement of reason for service termination with application
• Employers submit statement of additional basis for disability with application
• No earned income offset for total disability
• Five year window for upgrade from occupational disability to total disability begins from date of disablement (last day on payroll)
• Definition of “assigned duties” tightened
• Authority for Board to provide death and disability benefits to members on military service. Costs to be assessed, term of benefits, and offsets for military benefits to be established by rule.
• Line-of-duty death benefit increased to flat 70% of base salary. Supplemental benefit for members eligible for retirement to increase total survivor benefits for line-of-duty death to 70% of base salary.

Statewide Defined Benefit Plan Bill - House Bill 02 - 1032

Signed by the Governor: March 21, 2002
Effective date: January 1, 2003

This proposed bill will accomplish the following:

• Allow purchase of service credit for any public service
• Allow purchase of service credit for private sector service of up to five years, after five years of service credit are earned
• Ease the process for granting service credit for funds rolled over from other eligible retirement plans

Volunteer Firefighters Bill - House Bill 02 - 1036

Signed by the Governor: May 24, 2002
Effective date: July 1, 2002

This proposed bill will accomplish the following:

• Simplifies method of calculating state matching contribution without changing actual contribution for local volunteer plans