Commitment to Future, Willingness to Adapt Result in Financial Stability for Denver, CO Retirement Plan


The plan

The Denver Employees Retirement Plan (DERP) is a defined benefit pension plan that provides benefits to Denver city and county employees. At the end of 2012, it had 8,175 active contributing members and 8,045 retirees.

Commitment to funding

Denver has demonstrated its commitment to DERP funding by consistently paying its entire annual required contribution (ARC). Funding for the plan comes from a combination of investment income, government employer contributions, and employee contributions.


  • Maintaining long-term financial sustainability in spite of investment losses following the 2008 recession.
  • An increase in life expectancy for retirees that has resulted in longer, costlier retirements.

Changes to plan design

  • Accounted for increase in life expectancy.
  • Incremental increases in employer and employee ARCs. For 2014, employers will contribute 11.2 percent of employees’ total gross salaries, up from 10.25 percent in 2013. Employees will contribute 7.3 percent of gross salary on a pre-tax basis, up from 7 percent in 2013.
  • Smaller multiplier. DERP lowered the multiplier for retirement benefit calculations from 2 percent of the member’s average monthly salary based on the highest 36 months’ consecutive salary per year of service to 1.5 percent for all employees hired on or after Sept. 1, 2004.
  • Based the 1.5 percent benefit calculator on the highest 60 consecutive months’ salary rather than the highest 36 consecutive months’ salary for employees hired on or after July 1, 2011.
  • Excluded payments for unused sick and annual leave from the retirement benefit calculation for employees on or after July 1, 2011, to eliminate “spiking” of average salary estimates.
  • Changed from a rule of 75 with a minimum retirement age of 55 to a rule of 85 with a minimum age of 60 for all employees hired on or after July 1, 2011.

Strategies for the future

A July 2013 article in The Denver Post said the plan has “a bright future” thanks to its sustained focus on planning for the future. Pension officials say three key actions contribute to DERP’s ongoing financial success:

  • Managing the fund’s investments to meet or exceed its assumed annual return of 8 percent
  • Managing liabilities by regularly monitoring the long-term costs of meeting retirement obligations and making changes as needed
  • Receiving the full required contribution every year


  • City employees consistently identify the retirement benefits provided to them by the plan as a top reason for working for the city.
  • DERP’s goal is to achieve a funded ratio of 100 percent in order to fully fund its obligations, and expects to do so through its current practices.
  • At this stage, no additional changes are anticipated in the plan design or benefits beyond continued monitoring of liabilities and annual adjustments to the required contribution to maintain solid funding.
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