Provision: State Funding for Death & Disability Plan

Seeks additional State funding for unfunded benefit costs for members hired prior to 1997

What Does This Legislation Do?

This action provides approximately $35 Million in State assistance toward funding the unfunded liabilities for Death & Disability Plan members hired prior to 1997. In turn, this funding will help to shore up the Plan for all members by reducing the amount of time required for the Plan to regain fully funded status.

Why is this action necessary?

The Statewide Death & Disability Plan provides benefits to over 14,000 Colorado firefighters, police officers, and their families in the event that the member is seriously injured or killed. Members are covered 24/7, both on- and off-duty, until they are eligible for normal retirement, retire or otherwise terminate employment. The Plan, and its benefits, are greatly appreciated by the members and their families, knowing they have a safety net should the unthinkable occur. As of 1/1/2021, the Plan is 76.5% funded.

The State of Colorado was responsible for funding the benefits for all members hired prior to January 1, 1997. Funding for members hired on or after January 1, 1997 is the responsibility of the member and their employer, with the contribution split decided at the local level.

When the funding mechanism changed, the State made a one-time payment to cover the anticipated benefits for all members hired prior to January 1, 1997. However, the actual cost of those benefits is greater than what was anticipated, and FPPA covered the difference using funds meant to pay benefits to members hired after the state's one-time payment. The funds requested by this legislation will help make up for that shortfall, and help the Plan regain fully funded status in a shorter period of time. Without an adequate cash infusion from the State, the path toward full funding is longer and potentially problematic.

Legislation passed in 2020, HB20-1044, gave FPPA’s Board greater control over contribution rates into the Plan. This increased the likelihood that the Plan would eventually regain fully funded status. Local employers and members supported the legislation in 2020 increasing their contributions. However, further action is necessary to ensure that the Plan regains full funding in a timely manner. This legislation provides for the State to participate with employers and members in bridging the gap.

Bottom line: funding from the State will help the Plan regain fully funded status, while ensuring that Colorado’s first responders can continue to count on their death and disability benefits

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