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.
Download the 2022 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)
A cost of living adjustment (COLA) refers to an increase in income that correlates with the rise in the cost of living. DERP can implement a COLA only by a vote of the retirement board and only when funds are available to cover the cost of benefits over the lifetime of all retired members.
Because the retirement board’s primary responsibility is to safeguard the overall soundness of the retirement plan, the top priority is to make sure the 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 our investment performance, contribution rates of current employees compared to the contribution paid by retirees while employed, and our unfunded pension and health insurance liability.
A COLA has not been granted since 2002.
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.
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.