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Rest of the Story: Reporting Pension Liabilities – PERA and GASB 68

For the 2014-2015 audit (completed and reported next fall based on the current year financial results), Douglas County School District (DCSD), along with all other districts and other PERA participating governmental entities in Colorado, will be required to report in the District’s government-wide financial statements, our portion of Colorado’s Public Employee’s Retirement Association (PERA) unfunded liability associated with PERA’s defined benefit retirement program. GASB Statement 68 requires that this liability be reported. This reporting with have a negative effect on the District’s unrestricted net position. 

DCSD’s portion will be calculated based on our portion of the prior year’s (starting with calendar year 2014) PERA contributions (both employee and employer), as it compares to the total contribution to PERA for that year. Even though DCSD does not have any control over the contribution rate, nor the management of investments or benefits provided, DCSD must report this liability.   

  • Can the District leave PERA? 
    • No, the District is required by Colorado State Statute to contribute member and employer contributions to PERA at a rate set by statute.
  • Does the District have its own specific fund that PERA administers on DCSD’s behalf? 
    • No, PERA is a multiple employer defined benefit pension plan in which all districts and district charter schools make contributions. It would be financially irresponsible for DCSD to make higher contributions than set by statute, as all monies are pooled for the benefit of all school employees in Colorado, not just DCSD employees.
  • What is GASB? 
    • GASB is the Governmental Standards Board which is an independent organization establishing and improving standards of accounting and financial reporting for U.S. state and local governments.
  • What is the GASB 68 Statement and what does it mean to the Douglas County School District?
    • This statement requires DCSD to post the District’s portion of PERA’s unfunded liability to our government-wide financial statements resulting in a negative unrestricted net position for our first reporting year, Fiscal Year (FY) 2014-2015.
  • When does this requirement go into effect? 
    • This is in effect for FY 2014-2015 end of year audit and financial reporting.
  • What other organizations are impacted by this requirement? 
    • All governmental entities throughout the nation that make contributions to a multiple-employer defined benefit pension plan are impacted. Arizona governmental employees, for example, are members of the Arizona State Retirement Association (ASRS).
  • What is PERA’s unfunded liability as of December 31, 2013?
    • Specific to the School Division, the unfunded liability is actuarially determined as $14.1 billion.
  • Why is there an unfunded liability? 
    • In 2008, investment income dropped significantly and in the late 1990’s, PERA, at the direction of the Colorado legislature, disbursed extra monies to participants in order to decrease the level of fund balance in PERA’s funds.
  • How is DCSD’s portion of the liability going to be determined? 
    • PERA will provide this information to each contributing employer. The calculation will be based on DCSD’s contribution (both employee and employer) to the fund in the prior calendar year.
  • Who decided the methodology for determining the liability?
    • GASB 68 determines the methodology for determining each contributing employer’s proportionate liability.
  • What is the quantification of DCSD’s portion of PERA’s unfunded liability? 
    • We will receive this information in the summer of 2015.
  • Does the District have an account with PERA that funds the retirement payments to the employees of DCSD?
    • No, the contributions from all districts and district charters in the state are pooled together. Employees of districts and district charter schools often move from one school district to another. 
  •  What is the current PERA contribution by DCSD and the employees? 
    • For FY 2013-2014 (the most recent reporting year), the employee’s contribution was 8% and the District’s contribution was 17.45%. 
  • What is the aggregate?
    • DCSD’s contribution in FY 2013-2014 was $47,497,483.
  • How have the rating agencies responded to this requirement? 
    • During the last General Obligation (G.O.) Bond Refunding, Moody’s reaffirmed DCSD’s Aa2 rating, one of about nine districts in Colorado with this high rating. During our ratings call, Moody’s confirmed that they had considered the District’s future liability associated with this GASB 68 reporting requirement.

Defined Benefit Pension Plan - PERA

Plan Description – DCSD contributes to the School Division Trust Fund (SDTF), a cost-sharing multiple-employer defined benefit pension plan administered by the Public Employees’ Retirement Association of Colorado (PERA). The SDTF provides retirement and disability, post-retirement annual increases, and death benefits for members or their beneficiaries. All employees of the District are members of the SDTF. Title 24, Article 51, of the Colorado Revised Statutes (CRS), as amended, assigns the authority to establish benefit provisions to the State Legislature. PERA issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for the SDTF. That report may be obtained on line at or by writing to Colorado PERA, 1301 Pennsylvania Street, Denver,   Colorado 80203, or by calling PERA at 303-832-9550 or 1-800-759-PERA (7372).

Basis of Accounting for the SDTF – The financial statements of the SDTF are prepared using the accrual basis of accounting. Member and employer contributions are recognized as revenues in the period in which the employer pays compensation to the member and the employer is statutorily committed to pay these contributions to the SDTF. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. The SDTF plan investments are presented at fair value except for short-term investments that are recorded at cost, which approximates fair value.

Funding Policy – DCSD is required to contribute member and employer contributions to PERA at a rate set by statute. The contribution requirements of plan members and the District are established under Title 24, Article 51, Part 4, of the CRS, as amended. The contribution rate for members is 8.0%. The contribution rate for the District is 10.15% of covered salary. A portion of the District’s contribution (1.02% of covered salary) is allocated to the Health Care Trust Fund. DCSD is also required to pay an amortization equalization disbursement (AED) and a supplemental amortization equalization disbursement (SAED) equal to the following statutory percentages of the total payroll. If the District rehires a PERA retiree as an employee or under any other work arrangement, it is required to report and pay employer contributions (including the AED and SAED) on the amounts paid for the retiree; however, no member contributions are required.




Start Date



Employer Rate


Amortization Equalization Disbursement

Supplemental Amortization Equalization Disbursement



Employer Rate

January 2007





January 2008





January 2009





January 2010





January 2011





January 2012





January 2013





January 2014





For the years ending June 30, 2012, 2013, and 2014, the District’s employer contributions to the SDTF were $39,173,651, $42,826,213 and $47,497,483 respectively, equal to its required contributions for each year.  

Quick Facts

  • The Public Employees’ Retirement Association (PERA) provides retirement and other benefits to the employees of more than 500 government agencies and public entities in Colorado. PERA is the 21st largest public pension plan in the United States.
  • Established by state law in 1931, PERA operates by authority of the Colorado General Assembly and is administered under Title 24, Article 51 of the Colorado Revised Statutes.
  • PERA members include state government employees, public school teachers, many university and college employees, judges, many employees of cities and towns, State Troopers, and the employees of a number of other public entities.
  • DCSD employees participate in the School Division Trust Fund (SDTF) – one of five separate PERA divisions governing the various employees cited above.
  • The Governmental Accounting Standards Board (GASB), is the independent organization that establishes and improves standards of accounting and financial reporting for U.S. state and local governments.
  • GASB Statement No. 68 Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27 was issued in June of 2012 and is effective for fiscal years beginning after June 15, 2014. This statement requires all employers (nationwide) who make contributions to a cost-sharing multiple employer defined benefit pension plan to post their portion of any unfunded liability to this plan to their government-wide financial statements adversely impacting their unrestricted net position.

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