PERA, or Colorado's Public Employees' Retirement Association, is the pension plan covering most government employees in Colorado. Public employees essentially opt out of the social security system, and instead pay into PERA and receive employer matching.
PERA consists of two components: a defined benefit pension plan, and a 401(k).
Defined Benefit PERA
This is the traditional PERA. Unlike a 401(k) or IRAs, where the employee has a fund with money invested in it which is readily ascertainable (they're called "defined contribution plans"), PERA is a "defined benefit plan". Under PERA, the employer pledges to pay a specific monthly stipend upon retirement, depending upon employee's years of service, salary, and age at retirement.
Once defined benefit plans were the most common retirement plans around, now they are most often seen with public employees or large corporate employers.
A Colorado divorce court can divide PERA, and allocate benefits to the non-employee spouse. PERA even has a deceptively simple fill-in-the-blank order for the family law attorneys to fill out for the judge's signature. However, there is a strict 90-day deadline from the date of the decree of dissolution for PERA to receive the order, signed by the judge. And PERA will reject the form if it contains the slightest of mistakes. So make sure your Colorado divorce lawyer is diligent, and pays attention to detail.
When a defined benefit plan is divided, the non-employee spouse will receive his/her portion of the retirement benefits only when the employee-spouse receives his/her benefits.
PERA is typically divided using the time-rule formula - months of marriage overlapping the employment divided by the employee's total months of employment at the time of retirement. And be careful if you have unique situations, such as an employee who purchased additional PERA time during the marriage - that's where having a Colorado Springs family law attorney who knows what he/she is doing will help.
PERA also contains a traditional 401(k) component to it, which employees may voluntarily participate in. This is similar in concept to any other 401(k) plan, except that attorneys will need to use the standard PERA agreement and order to divide it, just as with the defined benefit component of PERA.
Divorce/Domestic Relations Orders - straight from PERA, a helpful page with information, and links to publications explaining how to divide PERA, as well as the model agreement and order to divide PERA.