Your DERP Pension Benefit Payment
As a DERP retiree, you join more than 10,000 retirees who receive a monthly lifetime DERP Pension Benefit payment. From knowing when to expect your payment, updating direct deposit information, electing tax withholding, and more, you’ll need to stay informed about topics related to your DERP Pension Benefit payment so you can manage your finances in retirement with ease. Below is a summary of information regarding your payment.
Your First DERP Pension Benefit Payment
Your first monthly lifetime DERP Pension Benefit payment will become effective the first day of the month after you have separated from employment as long as DERP has received your completed Retirement Application and required documentation within 30 days following your separation date. Your DERP Pension Benefit is paid by direct deposit to your bank account or credit union on the first business day of each month.
If we receive your complete Retirement Application and required documentation by the 15th of the month prior to your effective retirement date, you’ll receive your first benefit payment on the first business day of the month your retirement is effective.
If your complete Retirement Application and required documentation are received after the 15th of the month, you will receive your first benefit combined with your second benefit on the first business day of the following month.
As a new retiree, you will receive your monthly lifetime DERP Pension Benefit through direct deposit. Your monthly lifetime DERP Pension Benefit payment is deposited directly into your checking or savings account at your bank or credit union the first business day of the month. Direct deposit is fast, easy, and secure, and you have access to your funds without having to take a trip to the bank!
Log in to your MyDERP.org account and click the Direct Deposit button to set up or change your direct deposit.
Log in to your MyDERP.org account and click the Benefit Account button to view and print your direct deposit advice and review your DERP Pension Benefit history.
Your monthly lifetime DERP Pension Benefit payment is paid by direct deposit on the first business day of the month. If you have been with us for a while and still receive a physical check, your check will be mailed on the first business day of the month. Payment dates are listed below.
Download the Pay Dates Calendar.
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.
Cost of Living Adjustment (COLA)
Even though the DERP Retirement Board can provide a COLA, it is rarely granted for multiple reasons.
- 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 make sure funds are in place to pay every dollar of benefits already promised to every current and future retiree. Before granting a COLA, the retirement board takes into consideration several factors, such as the contribution rates of current employees compared to the contribution paid by retirees while employed, our unfunded pension and health insurance liability, and our investment performance.
- Granting a COLA Increases Contribution Rates.
While a COLA would increase your monthly DERP Pension Benefit payment, it would also create a new unfunded liability, which would mean increased costs to the city, its employees, and ultimately to the taxpayers.
- Your DERP Pension Benefit Is Meant to Be One Part of Your Retirement.
While working at the City and County of Denver (city) you were fortunate to be part of a retirement plan that guaranteed you a monthly DERP Pension Benefit payment upon your retirement. However, it’s important to remember that while your DERP Pension Benefit provides a strong foundation, it is designed to be supplemented with Social Security and your personal savings and investments.
When you were employed at the city, you paid into Social Security. This means you receive a DERP Pension Benefit and a Social Security Benefit which is not the case for many government employees. And, Social Security has a statutory COLA required by law based on the Consumer Price Index.
Taxes in Retirement
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.
To set up or change your tax withholding elections, log in to your MyDERP.org account and click the Tax Withholding button.
DERP cannot provide tax counseling. Specific questions about your taxes should be directed to your personal tax advisor, the IRS, and/or the Colorado Department of Revenue.
Have you moved?
If you have recently moved or changed your address, make sure to update your address in your MyDERP.org account. Keep in mind, if you move from Colorado to another state and were having Colorado taxes withheld, these taxes will continue to be withheld until you change your tax withholding elections.
To update your address, log in to your MyDERP.org account and click the Address button.
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.
DERP cannot provide tax counseling. Tax questions should be directed to your personal tax advisor, the IRS, and/or the Colorado Department of Revenue.
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-R’s, email Help@DERP.org.
Federal Limits on Benefits
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.