Updated September 3, 2026. Quick answer: Colorado Public Employees’ Retirement Association (PERA): the COLA is automatic under its statutory “automatic adjustment provision,” service credit can be purchased, and no DROP was found. Vesting takes five years of earned service credit.
Provisional. This page is published at medium confidence. The specific points that could not be confirmed are listed under What could not be verified below, and are named rather than smoothed over.
The verdicts
| Is the COLA granted? | Automatic |
|---|---|
| Is the COLA compounded? | Not stated |
| Vesting | 5 years of earned service credit |
| Buy service credit? | Yes |
| DROP? | None found |
| State | Colorado |
Those first two rows are separate questions and are routinely confused. Whether you get an increase at all is one thing; whether it compounds is another. A system can grant an increase automatically every year and still compute it against your original benefit forever, which is a materially worse deal than it sounds.
The COLA
“All AIs are paid in July and subject to change with the automatic adjustment provision.” For members who joined on or after January 1, 2007, the annual increase for July 2026 is the lesser of 1.0% or the average of the monthly CPI-W for 2025, to be announced in mid-2026; members who joined before that date, and all DPS benefit structure members, have a flat 1.0% cap for July 2026. Whether the increase compounds on the prior balance is not stated in the materials reviewed.
Buying service credit
PERA lets members reinstate a refunded/rolled-over account and purchase service credit for any employment not covered by PERA or another retirement program, including “any U.S. employment where the employer is set up under federal, state, or local government, as well as public and private K-12 school employment, and employment with public employee organizations.” Cost for pre-1/1/2007 members: “the amount rolled over/refunded plus interest”; for post-1/1/2007 members: “the amount rolled over/refunded, interest, and 1% of HAS for each month purchased” (the 1% goes to the annual increase reserve fund). Non-PERA-covered employment is priced at “the actuarial cost of providing the future benefit resulting from the purchase and is calculated using your HAS, your age, and your PERA membership start date.”
Run your own numbers before deciding: some purchases never recover their cost, and the calculator shows which.
Coordinate this with your overall retirement plan
An adviser can help weigh a COLA that may not compound, a service-credit purchase that may never pay for itself, or a DROP election against the rest of your retirement plan, but that does not replace the numbers in your own member statement.
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Vesting
Five years of earned service credit is PERA’s threshold for reduced/inactive-vested status: “If you are an inactive DPS benefit structure member with five or more years of earned service credit and you were not eligible for retirement at the time you terminated employment (inactive vested deferred), you are only eligible to retire when you reach full service retirement eligibility.” Full unreduced retirement eligibility varies heavily by hire date, from 30 years at 50 (hired before 7/1/2005) to 35 years at any age (hired on/after 1/1/2020).
DROP
No DROP program appears in PERA’s fact sheets or benefit-basics pages reviewed this session.
DROP is rarer than it appears across the systems on this site: most have none.
What could not be verified
REFUND TERMS: this page does not state what happens to your contributions if you take a refund instead of leaving your account with the system: that comparison was not independently researched for this system this session, and is left as an open gap rather than guessed from another system’s rule. Consult your own plan’s refund/forfeiture terms before deciding. Any additional field marked “not stated” in the verdicts table above was genuinely absent from the official materials read, not omitted for space.
Sources
Read September 3, 2026.
Related public pension systems: Tennessee TCRS · Indiana PERF.
General information drawn from each system’s own official published materials, not legal, tax or financial advice. Vesting, COLA and buyback rules are set by state statute and plan tier, differ materially by hire date, and can change by future legislation. This page cannot see your own member statement, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.