Office of Sen.

Mike Johnston
Colorado General Assembly | 200 E. Colfax Avenue | Denver, CO 80203 | 303.866.4864

FACT SHEET MEMORANDUM

HB 12-1031 FPPA Board Authority to Amend Plans Rep. Peniston & Sen. Tochtrop Staff Name: Dietrich Hoefner What the Bill Does: The board of the Fire and Police Pension Association (FPPA) is currently limited in its ability to make changes to the plan for the administration of benefits. In some circumstances, it may coordinate amendments to benefit plans with member agencies or seek approval from all plan members. In other situations the board may need to seek changes in legislation to make changes to the plan. This bill would give the board broader authority to make changes to the plan for the administration of benefits. It allows the board to approve prudent and necessary amendments to administer benefits consistently and uniformly across the system, or to comply with state or federal law. Colorado Context: The FPPA, an independent political subdivision of the state of Colorado, administers both old- and newhire pension plans, and associated benefits, such as the statewide death and disability benefit.1 The board of the FPPA consists of nine members appointed by the Governor and confirmed by the Senate, and is required to include:2 Two members representing Colorado municipal employers; One member representing full-time paid firefighters; One member representing full-time paid police officers; One member, who is a retired police officer and who, upon completion of his term, is replaced by a retired firefighter. Thereafter, the appointment of retired officers alternates between a retired police officer and a retired firefighter for each successive four year term; One member who is either a member of the Board of Directors of a special district, or is the fulltime paid professional manager of a special district to represent special districts having volunteer firefighters; One member from the state's financial or business community with experience in investments; One member from the state's financial or business community with experience in insurance disability claims; and

Alex Schatz, HB 12-1031: FPPA Authority to Amend Plans (Jan. 17, 2012), http://www.leg.state.co.us/clics/clics2012a/csl.nsf/fsbillcont3/9621EA1416428C8C87257981007DCCC7?Open&file =HB1031_00.pdf 2 http://www.fppaco.org/toc_frames.html

DRAFT 2/26/2012 9:26 PM

For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.

One member of the state's financial or business community experienced in personnel or corporate administration in corporations of over 200 employees.

Bill Provisions: The bill adds language to existing law that broadens the authority of the board to modify or amend the plan as it deems prudent and necessary. The language prohibits the board from making any changes that would result in an actuarial cost to the plan, or that would modify the amount of a normal benefit. Fiscal Impact: The bill is likely to result in indeterminate savings to the FPPA due to greater efficiency in the administration of plans. These savings would result from elimination of printing, mailing, and administrative costs associated with the current regime of making changes to the plan. 3

Alex Schatz, HB 12-1031: FPPA Authority to Amend Plans (Jan. 17, 2012), http://www.leg.state.co.us/clics/clics2012a/csl.nsf/fsbillcont3/9621EA1416428C8C87257981007DCCC7?Open&file =HB1031_00.pdf

DRAFT 2/26/2012 9:26 PM

For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.