- Because the joint and survivor benefit covers two lifetimes, your monthly DERP Pension Benefit is reduced.
- If you are married, your spouse must be the designated beneficiary for at least a 50% joint and survivor benefit unless they formally consent to you electing the maximum benefit option.
- If you are married, your spouse must formally consent if you designate a joint and survivor benefit option for another beneficiary.
- If your beneficiary passes away before you, your DERP Pension Benefit will be increased to the maximum benefit as if no joint and survivor option had been elected.
To obtain an estimate of your DERP Pension Benefit with joint and survivor options, email Help@DERP.org. You will need to include your expected retirement date and your beneficiary’s date of birth. If you were hired prior to January 1, 2010 and are anticipating sick and vacation leave or paid time off payout, please include this information, too.
What happens if I become disabled while working for the city?
A Disability Retirement benefit is available for all active members of DERP. This benefit provides important protection for you and your loved ones, if you become totally and permanently disabled, whether on-the-job or off-the-job. Disability retirement benefits provide a monthly lifetime benefit if you meet eligibility requirements and must stop working before you reach normal retirement age.
- On-the-Job
If you become permanently disabled because of an accident or other medical reason in connection with your employment, you may be eligible for an on-the-job disability retirement benefit. This benefit would be based on the higher of 20 years’ service credit or actual service plus 10 years. In either case, the service credit cannot exceed the service you would have earned at age 65. There are no minimum years of service requirements for this benefit. To qualify for an on-the-job disability, you must:- Submit proof of a work-related injury or disease.
- Separate from employment within 24 months of the work-related injury or disease.
- Apply in writing for a disability retirement within 90 days of your employment separation.
- Qualify for a disability benefit as determined by Social Security standards.
- Off- the-Job
A disability caused by sickness or other medical reason, not connected to the job, is classified as an off-the-job disability. The off-the-job disability benefit is 75% of the benefit calculated for an on-the-job disability. To qualify for an off-the-job disability retirement, you must:
Have at least five years’ service credit.- Terminate employment with the employer due to medical reasons.
- Separate from employment within 24 months of the injury or disease.
- Apply in writing for a disability retirement within 90 days of your employment separation.
- Qualify for a disability benefit as determined by Social Security standards.
- Temporary Early Retirement Temporary early retirement (pending approval of a disability application) is available to active, vested members who are at least age 55 (or at least age 60, for members hired on or after July 1, 2011). This benefit is designed to provide income to the member during the process of fulfilling the disability application requirements. Temporary early retirement is limited to three years.
If you qualify for disability retirement, your DERP Pension Benefit becomes effective the first day of the month following your termination of employment with the city, Denver Health and Hospital Authority, or the Denver Employee Retirement Plan because of the disability.
To initiate the process for a disability retirement:
- Review DERP Disability Benefits guide.
- Complete, sign, and submit the required forms to Help@DERP.org.
What happens if I die while working for the city?
If you are an active member and die while employed with the city, Denver Health and Hospital Authority, or the Denver Employee Retirement Plan, there are death benefits available for your beneficiary.
In most instances, the death benefit is a monthly lifetime DERP Pension Benefit for the designated beneficiary. If you are married, your spouse will receive the lifetime DERP Pension Benefit, unless your spouse formally consents to and waives this right and consents to another designated beneficiary. If there you are not married, any children under age 21 will receive a benefit until they reach age 21. If you are not married and have no children under age 21, the designated beneficiary will receive the benefit. You should designate a beneficiary upon enrollment.
- On-the-Job
If a death is classified as on-the-job, your beneficiary will receive a monthly lifetime DERP Pension Benefit with service credit calculated as the higher of 15 years’ service or actual service plus five years. In either case, the additional service credit may not exceed the service which you would have earned by age 65. Benefits are calculated in accordance with the standard retirement calculation using the adjusted service credit. There are no minimum service requirements for this benefit. - Off- the-Job
If a death is classified as off-the-job, your beneficiary will receive a monthly lifetime DERP Pension Benefit that is 75% of the on-the-job death benefit. There are no minimum service requirements for this benefit. - Benefits to Children Under 21
If you die without a surviving spouse but with children under age 21, any benefit which would have been paid to the spouse will be paid to the child(ren’s) guardian. Monthly benefit payments will continue until your children reach age 21. - Death Benefit After Retirement
Your DERP Pension Benefit may be payable to your spouse or beneficiary after your death if you have elected a Joint and Survivor Option at retirement. Upon your death, DERP will pay a monthly lifetime DERP Pension Benefit to your designated beneficiary. If your beneficiary passes away before you, your DERP Pension Benefit will increase to the maximum benefit as if no Joint and Survivor benefit had been selected.
It’s important to review and update your beneficiaries periodically to ensure that any benefits payable upon your death are paid as you desire. Log in to your MyDERP.org account and click the Beneficiary button.
What is a lump-sum death benefit?
When you retire from active service, a single lump-sum death benefit payment is available to be paid upon your passing to your beneficiary, or to your estate if your beneficiary is no longer living. The following is a breakdown of the benefit amount based on retirement type:
- Normal, Rule-of-75, Rule-of-85, Disability Retirement (after age 65) and Temporary Early Retirement – The lump-sum death benefit is $5,000.
- Disability Retirement before age 65 – The lump-sum death benefit is 150% of the member’s annualized average monthly salary, limited to $50,000. This benefit reduces to $5,000 upon the disabled member reaching age 65.
- Early Retirement for Tier 1 and 2 Members (hired before July 1, 2011) – The lump-sum death benefit is $2,500 at age 55. This benefit is reduced by $250 for each year under the age 65.
- Early Retirement for Tier 3 Members (hired on or after July 1, 2011) – The lump-sum death benefit is $2,500 at age 60. This benefit is reduced by $500 for each year under the age of 65.
Important – Retirement Law allows the lump-sum death benefit to be paid to the retired member in regular monthly installments. These regular payments may be made in 50 or 100 equal monthly installments while the retired member is still alive. This amount will be paid in addition to the regular monthly DERP Pension Benefit. Any remaining balance in the death benefit account will be paid to your beneficiary upon your death. Once you have withdrawn the complete death benefit, the payments will stop and there will not be a lump-sum death benefit for the beneficiary.
What is the Social Security Make-up Benefit?
The normal retirement age under Social Security for members hired before July 1, 2011 was extended beyond age 65 for individuals born in 1938 or later. If you are in this group, DERP will increase your monthly retirement benefits to help “make-up” for delayed Social Security benefits.
The Social Security Make-Up benefit is payable beginning at age 62, or your retirement date, whichever is later. This benefit will not be paid before your DERP Pension Benefit has begun. The benefit calculation is based on a percentage of your estimated primary Social Security benefit times service credit during which the contributions were made to Social Security (up to a maximum of 35 years) divided by 35.
The Social Security Make-Up Benefit has been discontinued for members hired on or after July 1, 2011.
Supplementing Benefits
Can I purchase service credit to put toward my DERP Pension Benefit?
If you are vested, you may purchase service credit prior to separation from employment. You can purchase unlimited prior governmental service credit, and up to five years of nongovernmental service credit. Service credit may be purchased in periods of one or more months. The cost to purchase service credit is based upon your age, earliest unreduced retirement age, average monthly salary (based on the highest 36 or 60 consecutive months’ salary), and other actuarial factors.
Purchasing service credit will help you increase your DERP Pension Benefit by increasing the amount of service used in the calculation of your retirement benefit. Purchased service will be used only to calculate the member’s retirement benefit and will not be used in the calculation of the Rule of 75, Rule of 85, or health insurance premium reduction benefit.
Email Help@DERP.org to request an official calculation using your current data.
Can I add extra money to my DERP Pension Benefit?
You cannot add extra money to your DERP Pension Benefit other than by purchasing service credit. However, you can contribute more to your future retirement through the voluntary retirement savings (457b) program offered by the city. Visit the city’s Summit Savings website to learn more about the Deferred Compensation plan.
What should I do to begin receiving Social Security?
DERP does not have detailed information regarding benefits through Social Security. As you plan for retirement, the following links can be used a resource.
- Social Security Benefits Estimator
The Social Security Benefits Estimator helps you to better understand your Social Security protection as you plan for your financial future. The benefit calculator can answer all your questions about payments and options. - Social Security Statement
If you have questions about your Social Security Statement, this site has frequently asked questions that can guide you in the right direction for an answer. - Apply for Social Security Online
The Social Security Administration has a wealth of information for current employees and retirees alike, including retirement planning calculators, Medicare information, and how to apply for benefits. - Social Security Publications
The Social Security Administration produces a number of up-to-date, online publications that include information about retirement benefits, disability benefits, survivor’s benefits, and more.
When applying for benefits, Social Security recommends that you apply four months before you want to receive your first payment. If you would like to meet with a Social Security representative, you should plan to schedule the meeting several months in advance.
There are three options available to apply:
- Online at ssa.gov
- By phone at 1-800-772-1213
- At a Social Security office
Retired Members
Is my DERP Pension Benefit taxable?
Your DERP Pension Benefit is considered taxable income, subject to federal and state income tax, and reported to the IRS and state of Colorado. DERP can withhold federal and Colorado taxes from your pension benefit if requested. DERP cannot withhold taxes for any other state.
Colorado Income Tax Exemptions
- For members under age 65, the state of Colorado exempts the first $20,000 of retirement income.
- For members age 65 or over, the state of Colorado exempts the first $24,000 of retirement income.
Is there a maximum dollar amount I can receive from my DERP Pension Benefit?
Internal Revenue Code (IRC) §415(b) sets limits on the retirement benefits that DERP can pay from its qualified trust. Most members are not affected because their DERP Pension Benefit will not exceed the §415(b) limits however a few highly paid members may exceed the limits.
Although §415(b) imposes these limits, IRC §415(m) allows DERP to use a replacement benefit arrangement (RBA) to provide relief for a retiree who exceeds the 415(b) limit. If it is determined that your DERP Pension Benefit will exceed the §415(b) limits, a DERP membership services representative will contact you to discuss what it may mean for you.
How do I change my tax withholding?
You may change you tax withholding at any time.
To set up or change your tax withholding elections, log in to your MyDERP.org account and click the Tax Withholding button.
Does DERP send out a statement of retirement income and tax withheld at the beginning of the year?
DERP will mail, or make available through your MyDERP.org account, your Form 1099-R – Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., by January 31 to report your distribution of retirement benefits.
Log in to your MyDERP.org account, click the View Tax Forms hyperlink to view and print a prior Form 1099-R. To request older Form 1099-Rs email Help@DERP.org.
How do I change my address?
If you have moved, plan to move, have a new phone number, or new email address, you’ll want to update your information, so you continue to receive important news and information about your account.
Log in to your MyDERP.org account and click the Address and/or Account Info hyperlinks to update your address and contact information.
How do I change or set up direct deposit?
Log in to your MyDERP.org account and click the Direct Deposit button to update your direct deposit information.
What if I need an income verification letter?
During retirement there may be times when you need to show proof of your monthly DERP Pension Benefit amount. We will provide you an income verification letter upon request.
To request an income verification letter, email Help@DERP.org. We will process and mail or email an official letter within three business days of receipt.
Will I receive a Cost of Living Adjustment (COLA)?
When evaluating a COLA, the DERP Retirement Board takes into account the following factors:
- The DERP Retirement Board’s Primary Responsibility is to Safeguard the Overall Soundness of the Retirement Plan.
The retirement board’s top priority is to ensure funds are in place to pay every dollar of benefits promised to every current and future retiree. When contemplating a COLA, the retirement board assesses our unfunded pension liability, health insurance liability, and investment performance, among other things.
- The DERP Retirement Board Assesses the Impact a COLA Could Have on all DERP Members, Including Those in Different Tiers of Membership.
The retirement board considers the contribution rates for current employees compared to the contributions paid by retirees while employed. City employees did not contribute to their own retirement benefits until 2003, and employee contributions have steadily increased since that time. This means that for most current retirees, their monthly DERP Pension Benefit payment was funded, for the most part, by the city. Currently, every benefited employee contributes a percentage of each paycheck to DERP, along with a contribution from the city . Granting current retirees a COLA could increase the burden on current employees, who already pay a historically high contribution to DERP.
- Your DERP Pension Benefit Is Meant to Be One Part of Your Retirement.
While working at the city you were fortunate to be part of a retirement plan that guaranteed you a monthly payment upon your retirement. When you were employed at the city, you also paid into Social Security which means you receive a Social Security Benefit in addition to your DERP Pension Benefit. The Social Security Administration reviews Social Security benefits annually and adjusts for inflation based on a defined formula. The Revised Municipal Code of the City and County of Denver, which governs DERP, does not have a mandatory inflation adjustment or COLA formula.
What happens to my DERP Pension Benefit if I return to work?
Your DERP Pension Benefit and other retirement income may be affected differently based on your employer and other important factors. Consider the following information before becoming re-employed.
Working for the City and County of Denver or Any Other Covered Employer
If you decide to work for the city or any other covered employer during your retirement, re-employment may affect your DERP Pension Benefit. In order for your DERP Pension Benefit not to be interrupted:
- You must be separated from employment and not receive any monies from the city or any other covered employer, including any payment for accrued vacation and sick leave, for a minimum of 30 days, after retirement.
- You cannot work more than 1,000 hours in any calendar year after the initial date of re-employment.
If you don’t wait at least the minimum amount of time before resuming employment or work more than 1,000 hours in a calendar year, your DERP Pension Benefit will be suspended and you will be considered re-employed with the city or any other covered employer in a DERP-benefitted position.
You will be required to pay the applicable employee contributions to DERP, and in return will receive additional service credit until you separate again from employment. At that time, your initial retirement benefit will resume. You will have to reapply for an additional retirement benefit to be calculated based upon the new service and earnings accrued during the re-employment period. This new benefit will be paid in addition to the previously calculated benefit.
Working for a Non-Covered or Non-City and County of Denver Employer
If you decide to work for a non-covered or non-City and County of Denver employer, there are no limits on the amount of time you may work and your DERP Pension Benefit will not be affected.
Disability Recipient
If you are receiving a Disability Pension Benefit from DERP and return to work, you may not be able maintain your Social Security Disability Insurance (SSDI) benefits. If you lose your SSDI benefits, you will no longer qualify to receive a Disability Pension Benefit from DERP.
Social Security Benefits and Income Taxes
Returning to work may also affect your Social Security Benefits and income taxes. Contact the Social Security Administration and your tax professional to understand how you may be impacted.
Health Insurance
Does DERP offer health insurance?
Health insurance is an important part of a secure retirement. DERP offers you and your qualified dependents access to health insurance so that you can continue to safeguard your family. Health insurance includes medical plus prescription drug, dental, and vision plans. You may enroll in one or all three types of coverage.
Visit DERP’s Health Insurance page for details about the health insurance available for you and your dependents.
When can I make changes to my insurance?
You can enroll or make changes to your health insurance at retirement, during Open Enrollment, or when you experience a qualifying life event.
Retirement
When you retire, you can elect to enroll in health insurance within 30 days of receiving your first monthly lifetime DERP Pension Benefit. In most cases, your health insurance is effective when your DERP Pension Benefit becomes effective.
Open Enrollment
DERP’s annual Open Enrollment is the month of October. Open Enrollment is your opportunity to reflect on your needs and fine-tune your benefits package to match. Take this opportunity to think about the changes you have experienced in the past year or anticipate in the coming year and determine what plan(s) will best meet your needs. Any changes you make during Open Enrollment will be effective January 1 of the following year.
Qualifying Life Events
A qualifying life event is a change in your situation that makes you eligible to update your health insurance outside of DERP’s annual Open Enrollment period. A qualifying life event includes:
- Becoming eligible for Medicare
- Change in marital status
- Involuntary loss of previous health insurance
- Change in residence and becoming ineligible for your current health insurance
Changes to your health insurance must be within 30 days of a qualifying event.
Email Help@DERP.org as soon as possible so we can work with you to get the proper paperwork and supporting documentation related to your qualifying life event.
What is the Insurance Premium Reduction Benefit?
The Insurance Premium Reduction (IPR) Benefit is a benefit in which DERP contributes towards your monthly health insurance premiums. The amount DERP contributes is a based on your years of service and Medicare status. To be eligible for the IPR Benefit, you must be enrolled in group health insurance offered by DERP. In addition, the IPR Benefit is only available to members and spouses receiving a joint and survivor benefit.
