(1) As used in this section, unless the context otherwise requires:
"Blended total contribution amount" means the weighted average of the total amounts paid by the employer and the member to the association for each of the five divisions pursuant to sections 24-51-401 (1.7) and 24-51-411, and the amount the association receives pursuant to section 24-51-414, but shall not include the portion of the employer contribution remitted to the health care trust fund pursuant to section 24-51-208 (1)(f) and (1)(f.5) and the portion of the employer contribution remitted to the annual increase reserve.
"Blended total required contribution" means the weighted average of the total of theassociation's reported actuarially determined contribution rates and member contribution rates of the five division trust funds.
"Weighted average" means the proportion of unfunded actuarial accrued liability attributable to each division reported as of the most recent valuation date.
Beginning July 1, 2019, and each July 1 thereafter, employer contribution rates, member contribution rates, annual increase amounts, and the direct distribution amount shall remain unchanged until such time as changes are required pursuant to this section.
When the blended total contribution amount is less than ninety-eight percent of theblended total required contribution, the following adjustment shall occur:
The annual increase percentage determined pursuant to sections 24-51-1002 and 2451-1009 (4)(a) shall be reduced by up to one-quarter of one percent, but at no time will the annual increase percentage be reduced to equal less than one-half of one percent, except as provided in sections 24-51-1002 (1.5) and 24-51-1009 (1.5);
The employer contribution rate will be increased by up to one-half of one percent,but at no time will the employer contribution rate be increased to exceed the employer contribution rates under section 24-51-401 (1.7)(a)(II), plus two percent;
The member contribution rate will be increased by up to one-half of one percent, butat no time will the member contribution rate be increased to exceed the member contribution rates under section 24-51-401 (1.7)(a)(IV), plus two percent; and
The amount of the direct distribution pursuant to section 24-51-414 will be increasedby up to twenty million dollars, but at no time will the amount of the direct distribution exceed two hundred twenty-five million dollars in a fiscal year.
The adjustment in subsection (3) of this section shall be determined by the association, shall be equally apportioned among the annual increases, the employer contributions, the member contributions, and, if applicable, the direct distribution amount, and shall be the maximum yearly adjustment allowed unless an adjustment less than the maximum adjustment is sufficient to bring the blended total contribution amount to one hundred three percent of the blended total required contribution. In no event shall a yearly adjustment cause the blended total contribution amount to exceed one hundred three percent of the blended total required contribution. The adjustment shall be made once in any calendar year and shall not exceed the maximum yearly amounts indicated in subsections (3)(a), (3)(b), (3)(c), and (3)(d) of this section.
In the event any one of the four component parts of the adjustment as outlined insubsection (3) of this section has reached its total maximum, then no further adjustment shall be made to that component. Only the adjustments to the other three components shall continue as specified in subsections (3) and (4) of this section, even if the fully required adjustment to bring the blended total contribution amount to one hundred three percent of the blended total required contribution is not achieved.
When the blended total contribution amount is greater than or equal to one hundredtwenty percent of the blended total required contribution, the following adjustment shall occur:
Subject to sections 24-51-1002 (1.5) and 24-51-1009 (1.5), the annual increase percentage determined pursuant to sections 24-51-1002 and 24-51-1009 (4)(a) shall be increased by up to one-quarter of one percent, but at no time will the annual increase percentage be greater than two percent, except as provided in section 24-51-1009.5;
The employer contribution rate will be reduced by up to one-half of one percent, butat no time will the employer contribution rate be less than the employer contribution rates under section 24-51-401 (1.7)(a)(I);
The member contribution rate will be reduced by up to one-half of one percent, but atno time will the member contribution rate be less than the member contribution rates under section 24-51-401 (1.7)(a)(I); and
The amount of the direct distribution pursuant to section 24-51-414 will be reducedby up to twenty million dollars in a fiscal year.
The adjustment in subsection (6) of this section shall be determined by the association, shall be equally apportioned among the annual increases, the employer contributions, the member contributions, and, if applicable, the direct distribution amount, and shall be the maximum yearly adjustment allowed unless an amount lower than the maximum adjustment is necessary to keep the blended total contribution amount equal to one hundred three percent of the blended total required contribution. In no event shall a yearly adjustment cause the blended total contribution amount to fall below one hundred three percent of the blended total required contribution. The adjustment shall be made once in any calendar year and shall not exceed the maximum yearly amounts specified in subsections (6)(a), (6)(b), (6)(c), and (6)(d) of this section.
The adjustments pursuant to this section shall be determined based on the blendedtotal contribution amount and blended total required contribution as reported in the annual actuarial valuation report required under section 24-51-204 (7) and shall be effective July 1 of the next calendar year. The first adjustment pursuant to this section shall not occur before July 1, 2020.
Source: L. 2018: Entire section added, (SB 18-200), ch. 370, p. 2243, § 12, effective June 4.
Cross references: For the legislative declaration in SB 18-200, see section 1 of chapter 370, Session Laws of Colorado 2018.