Reminder: Shift in PERA contributions takes effect this month

University of Colorado leadership is reminding employees who are PERA (Public Employee Retirement Association) members that they will see a 2.5 percent reduction in wages for the 2010-11 fiscal year, starting with July 2010 payroll (July 23 for employees on the bi-weekly pay cycle that ended July 20; July 31 for the monthly pay cycle).

The additional 2.5 percent paid through payroll deduction will go directly into each employee's personal PERA account. The net effect on take-home pay will be somewhat less than 2.5 percent, because the PERA deduction will be taken before federal and state taxes are calculated.

The extra 2.5 percent contribution will not reduce an employee's highest average salary, a calculation used to determine retirement benefits.

The change is being made to comply with a new Colorado law that shifts a portion of retirement fund contributions from the employer to the employee. Gov. Bill Ritter signed Senate Bill 10-146 into law as part of the effort to balance the state budget. The law decreases the employer contribution rate in the state and judicial divisions of PERA by 2.5 percent and increases the member contribution rate by 2.5 percent for one year. SB146 will save the state about $37 million during the 2010-11 fiscal year.

About 11,000 CU employees are PERA members.

For employees earning $40,000 a year, the deduction will amount to a $66 decrease in monthly pay, according to university calculations.

Employees with questions and the PERA shift should contact Payroll & Benefit Services at 303-735-6500 or the human resources office.