Section 31-31.5-402 - Plan funding - actuarial valuation and adjustments to maintain the actuarial soundness of the plan(1) The general assembly declares that the rates of member and employer contributions must be adequate to fund benefit liabilities accrued under the statewide retirement plan established by this article 31.5.(2)(a) The board shall conduct an annual actuarial valuation of the statewide retirement plan and shall determine the cost of all benefits of the lifetime benefit components, which may include projected cost of living adjustments for each of the lifetime benefit components. The board shall submit an annual actuarial valuation report to the state auditor, the pension review committee, the legislative audit committee, and the joint budget committee of the general assembly, together with any recommendations concerning such liabilities as accrued. Amortization of liability over a forty-year period shall be deemed adequate to maintain actuarial stability.(b) The board shall periodically conduct a review and study of the actual experience of the assets and liabilities of the lifetime benefit components of the statewide retirement plan. The board shall adjust the assumptions made with regard to each component as a result of the review and study.(3) The board shall determine after each annual actuarial valuation if the cost of all benefits established by this part 4 and the cost of a normal retirement pension beginning at age fifty-five for members then eligible may be fully funded on an actuarially sound basis not including future projected cost of living adjustments without necessitating an increase in the employer and member contributions made pursuant to subsection (5) of this section.(4) If in any year the board determines pursuant to subsection (2) of this section that the cost of the benefits described in this part 4 may not be fully funded on an actuarially sound basis, the board, in its discretion, may take the following actions singularly or in any combination and in any order: (a) The board may terminate allocating surplus contributions to the money purchase component pursuant to section 31-31.5-301 (3);(b) The board may terminate making cost of living adjustments pursuant to section 31-31.5-410;(c)(I) The board may order that the normal retirement pension commence such number of months as are actuarially supportable, from one to sixty, after age fifty-five for members who are otherwise eligible pursuant to section 31-31.5-401 (2)(a). If the board adjusts the age of eligibility pursuant to this subsection (4)(c)(I), it shall also adjust the age of eligibility for benefits under section 31-31.5-401 (2)(b), (3), and (4) in a like manner. The determination of the board is conclusive absent fraud.(II) A pension commenced before any adjustment in the age of eligibility pursuant to subsection (4)(c)(I) of this section is not subject to review. If a court determines that this subsection (4) is invalid, the age of retirement to be eligible for any normal retirement benefit shall be age sixty except for persons receiving a benefit at the time of the court's decision.(d) The board may prospectively order that the benefit multiplier used in section 31-31.5-403 (1)(b) be reduced from two and one-half percent to as low as two percent for any given year or years;(e) The board may suspend further implementation or participation in any plan amendment adopted pursuant to part 6 of this article 31.5 that contributes additional cost to the plan;(f) The board may suspend further participation in the deferred retirement option plan pursuant to section 31-31.5-409 if it determines that the option contributes additional cost to the statewide retirement plan; and(g) The board may reinstate any benefits terminated, adjusted, or suspended pursuant to this section if it determines that the action taken is no longer necessary to maintain the actuarial soundness of the lifetime benefit components. This may include, but is not limited to, retroactive reinstatement of the benefit multiplier reduced under subsection (4)(d) of this section.(5)(a) If the actual financial experience of the lifetime benefits account is found to be more or less favorable than the assumed experience during the previous period, adjustments may be made by the board in the member and employer contributions as may be deemed feasible and advisable so long as the employer contribution rate adjustment is equal to the member contribution rate adjustment.(b) The board shall not increase employer or member contributions pursuant to subsection (5)(a) of this section unless it has taken the actions permitted under subsections (4)(a) to (4)(f) of this section and it finds that the increase is necessary to maintain the actuarial soundness of the plan.(6) Nothing in this section shall be construed to require the reduction of benefits below the level sustainable by the higher member or employer contribution rates established pursuant to section 31-31.5-601.Amended by 2023 Ch. 303,§ 77, eff. 8/7/2023.Added by 2022 Ch. 61, § 1, eff. 8/10/2022.2023 Ch. 303, was passed without a safety clause. See Colo. Const. art. V, § 1(3). 2022 Ch. 61, was passed without a safety clause. See Colo. Const. art. V, § 1(3).