By: Beth Andersen-Filson

Colorado public school teachers, state troopers, many employees of state colleges and universities, judges and some court employees, some city and town employees, and many other state employees receive PERA (Colorado Public Employees’ Retirement Association) instead of Social Security for their years as state employees. 

PERA recipients must invest a fixed percentage of their pay into the pre-funded PERA trust fund. The PERA Trustees invest these funds. 

Colorado law allows a state employee who received/receives PERA (the retirement benefit for state employees) to choose one of three options in terms of their spouse’s benefit. 

  • Option 1 gives the recipient the highest benefit but leaves no death benefit for a spouse who survives them. 
  • Option 2 gives an intermediary benefit but leaves a 50% death benefit for the spouse. 
  • Option 3 pays less during the recipient’s lifetime but leaves a great death benefit to their co-beneficiary. 

As a general rule, once the election is made, you have 60 days to make changes. After that, the choice is final.

However, Colorado law also allows the state employee, or former state employee, to change the election to Option 1 and take away their ex-spouse’s death benefit

Image showing one person with their hand out and the other holding their hand in a stop position. they are in front of a professional looking person with papers and a gavel.

The husband in the In re the Marriage of Mack, 2022 CO 17, 507 P.3d 524 (2022), wanted to switch to Option 1 after divorce to remove his wife as a beneficiary using this provision.

The trial court judge disagreed and said the court, NOT the PERA recipient, had the exclusive right to decide whether the spouse could be removed. The husband disagreed and said the law allows him to remove his wife whether or not the court agrees. He appealed based on this argument.

In Mack, supra, the Colorado Supreme Court ruled against the husband PERA recipient and agreed with the lower court that ONLY THE COURT CAN SWITCH TO OPTION 1. 

There are some workarounds in this situation because ultimately the main goal in divorce is to ensure EVERYTHING is equitable (fair) to both parties. A party giving a PERA death benefit may trade this off with other property to make sure the agreement is fair.

An attorney can help PERA-eligible divorcing parties and their spouses make the best choices when it comes to PERA. If you have a question about PERA and how it affects you, call Andersen Law PC at 720-922-3880 or call my cell at 303-808-4794 for a free consultation.


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