PERA posts $6 billion net increase in 2024; auditors give clean opinion while actuaries warn of long-term funding trade-offs

Auditors and actuaries told the Legislative Audit Committee on July 1 that Public Employees' Retirement Association of Colorado posted strong 2024 investment results and received a clean financial-statement opinion, while actuarial projections show ongoing funding challenges that could prompt future automatic adjustments of contribution or benefit rules.

Financial audit highlights: CliftonLarsonAllen, the external financial auditor, issued an unmodified (clean) opinion on PERA—9s financial statements for the year ended Dec. 31, 2024. PERA reported total investments at fair value of about $72.3 billion and a fiduciary net position of about $73.7 billion as of Dec. 31, 2024, an increase of roughly $6 billion from the $67.7 billion at the end of 2023. Total additions to the trust funds were about $12.4 billion in 2024, driven by $4.8 billion in contributions (roughly $2.7 billion employer, $1.7 billion member) and about $7.6 billion in net investment income. Benefit payments totaled roughly $5.5 billion.

Auditor Sean Walker (CliftonLarsonAllen) emphasized the audit—9s clean opinion and flagged key accounting notes, including disclosures related to investments, measurement hierarchy under GASB 72, and GASB 67/74 pension and OPEB liabilities. The audit found no material weaknesses in internal control over financial reporting.

Actuarial valuation and funding status: Segal—9s annual actuarial valuation (presented by Brad Ramirez and colleagues) found the unfunded actuarial accrued liability (UAAL) rose from about $90.5 billion to about $93.9 billion; the combined funded ratio on an actuarial basis remained in the high-60s (about 69.6% on actuarial value per the report). Segal noted the valuation incorporated changes from an experience study (updated mortality improvement assumptions, lower head-count growth in projections), several legislative items, and 2024 market results. The actuarial-determined contribution (ADC) and assessment of the Automatic Adjustment Provision (AAP) showed no AAP adjustment required by statute in this valuation cycle.

Segal also presented probability-based "signal" analyses. Under the modeling used, the report showed modest probabilities that an AAP trigger could occur in a given near-term year; the 10-year stochastic projection indicated a high likelihood the plan will face at least one AAP-triggering event over the next decade (Segal summarized the cumulative probability as high across 10 years), while the one-year stress tests identified return, payroll and demographic results that would be necessary to trigger an adjustment at the next valuation.

PERA and Board response: PERA staff thanked auditors and actuaries and highlighted a 30-year net return of about 8.4% and a 2024 net return near 10.9% (both net of fees). PERA said it manages a large portion of assets internally, has an updated asset allocation, and is monitoring legislative changes that affect future contribution flows.

What this means: The clean audit confirms PERA—9s financial statements are presented fairly under GASB reporting standards. The actuarial valuation shows the system remains funded at a level below full funding and that demographic and market assumptions, plus legislative changes, are material to future contribution requirements and the path to full funding. Segal cautioned that closing the plan or shifting members without an alternate mechanism to address the UAAL could have significant fiscal consequences.

Ending: The committee released the financial audit report and received the actuarial valuation and signal analysis for oversight; no immediate policy changes were adopted at the hearing.