House Bill 24-1043: D&D Plan Funding

Seeks $27.39 Million to satisfy the state’s funding obligation for Members hired before 1997

What Does This Legislation Do?

HB24-1043 requests $27.39 Million in State funds to cover the unfunded liabilities for Members of the Statewide Death & Disability Plan hired prior to 1997 (Pre-97s). As written, this legislation requests the funds to be paid in three annual payments of $9.13 Million.

Why is This Action Necessary?

The Statewide Death & Disability Plan provides 24-hour, on- or off-duty coverage to Members in the event they are injured or pass away. Plan membership includes over 14,000 active and retired participants from over 250 fire and police departments. As of January 1, 2023, the Plan is 81.7% funded.

Timeline of funding issues with Statewide Death & Disability Plan

From inception until 1997, the state was responsible for funding all Plan benefits. Then on January 1, 1997, the Plan’s funding mechanism changed to require Members and their Employers to fund the Plan through monthly payroll contributions. In an effort to fulfill its obligation to fund benefits for Members hired before 1997, the state made a one-time payment based upon actuarial projections at the time.

But in the years that followed, the actual cost of benefits has become significantly greater than the state’s original projection. This is largely due to two factors:

  • Plan utilization: More Pre-97 Members have drawn D&D benefits than was expected, meaning more benefits are paid from the Plan than originally anticipated
  • Longevity: These Members are living longer than the state projected, meaning that benefits must be paid over a longer period of time

In 2022, FPPA pursued legislation to cover the funding shortfall for Pre-97 Members. Senate Bill 22‑036 requested $33.2 Million but was later amended to provide just $13.3 Million. This cash infusion has helped to close the funding gap for Pre-97 Members, and this new legislation seeks to shore up the remaining outstanding funds. Based upon the experience of the last few decades and current actuarial projections, the funding shortfall for Pre-97 Members is currently $27.39 Million.

The Bottom Line: The Statewide Death & Disability Plan provides an invaluable safety net to Colorado’s Firefighters, police officers, and their families. This bill asks the legislature to fulfill the state’s commitment to Colorado’s first responders, ensuring that they can count on their death and disability benefits into the future.

About This Site

ForwardWithFPPA.org provides information and resources for FPPA Members, stakeholders and the public regarding the future of the Fire & Police Pension Association of Colorado.

© Fire & Police Pension Association of Colorado | All Rights Reserved.