Colorado's Facility Schools Might Finally Get Access to PERA Retirement Benefits

What This Bill Actually Does

Facility schools aren't your standard neighborhood elementary schools. Under Colorado law, they are highly specialized educational programs—often run by private or nonprofit organizations—that serve students with severe physical, behavioral, mental health, or special education needs. Because these organizations aren't technically public school districts, their employees have historically been excluded from the Public Employees' Retirement Association (PERA). This has created a two-tiered system where educators doing some of the most intensive, demanding work in the state are denied the standard retirement benefits offered to their peers in traditional public schools.

HB26-1146 aims to fix that structural gap. By amending Section 24-51-101 of the Colorado Revised Statutes, the bill officially adds any "approved facility school" to the state's legal definition of an employer. This subtle legal tweak is powerful. It allows the governing board of any of Colorado's 35 approved facility schools to formally apply to join PERA. If approved, the school is specifically assigned to PERA's Local Government Division rather than the standard School Division. It is crucial to note that this is a purely opt-in program; the state is not forcing any facility school to change its retirement offerings.

The legislation also builds in a complex exit strategy under Section 24-51-313. If a facility school joins the PERA system but later decides the financial burden is too heavy, they can apply to terminate their affiliation. However, the bill prevents an employer from unilaterally pulling the rug out from under its staff. To leave PERA, the school's governing body must pass a resolution, and then at least 65 percent of the employees who are PERA members must vote to approve the exit. This gives workers significant leverage and ensures that once a school commits to providing a pension, it cannot easily back out.

What It Means for You

If you work at one of Colorado's approved facility schools—whether you're a special education teacher, a paraprofessional, a counselor, or an administrative staff member—this legislation could fundamentally change your long-term financial trajectory. Historically, you've been doing incredible heavy lifting without access to the traditional pension benefits enjoyed by standard public school teachers. If your school’s board decides to opt in, you will be enrolled in PERA. This means a mandatory 11.0 percent contribution will be deducted from your paycheck, which buys you into a defined benefit pension plan that provides guaranteed monthly income when you retire. Furthermore, if you ever decide to transition to a traditional public school district, your PERA service credits will travel seamlessly with you.

If you are a parent or guardian of a child who relies on a facility school, you already know how disruptive staff turnover can be. Burnout in specialized education is notoriously high, and facility schools frequently lose their best educators to traditional school districts simply because those districts can offer PERA pensions. By giving facility schools the ability to offer the exact same retirement package, this bill provides a massive recruitment and retention tool. The ultimate goal is to foster a more experienced, stable, and long-term staff working with Colorado's most vulnerable students.

Here is what you should do next to stay ahead of this change:

• Talk to your school's governing board: Since this is an entirely opt-in program, your leadership team has to pass a resolution to apply. Start having conversations now about whether they are open to joining PERA.
• Run the numbers on your paycheck: An 11.0 percent mandatory deduction is significant. Make sure you understand how this will affect your monthly take-home pay, and compare it to whatever 401(k) or 403(b) contributions you are currently making.
• Understand the long-term benefit: Educate yourself on the difference between a defined benefit pension (which guarantees income for life) and a defined contribution plan (where your retirement relies heavily on market performance).

What It Means for Your Business

If you sit on the board of a nonprofit that operates a facility school, or if you manage the operations of one, HB26-1146 completely rewrites your compensation and hiring playbook. Right now, you are locked in a fierce battle with traditional public school districts for specialized educational talent. Being able to offer PERA benefits levels that playing field and gives you a fighting chance to retain your top performers. However, that competitive advantage comes with a steep, recurring price tag. If you opt into the Local Government Division, you will be legally required to make an employer contribution equal to 15.8 percent of your employees' salaries. For a facility school running on tight state funding margins, that is a massive line item to absorb.

Beyond the financial commitment, joining PERA requires a substantial administrative overhaul. If your board passes a resolution to apply, you will need to update your payroll infrastructure to handle PERA enrollments, remit contributions accurately on a strict schedule, and report detailed compliance data to the state so they can calculate retirement benefits. You also need to heavily weigh the 65 percent rule. If you join PERA and later realize the 15.8 percent employer contribution is financially unsustainable, you cannot simply cancel the benefit. The law requires a supermajority of your PERA-enrolled staff to approve the exit. Once you are in, you are essentially locked in unless your employees agree to let you out.

Here are the specific action items you need to tackle THIS WEEK:

• Conduct a rigorous financial stress test: Model out exactly what a 15.8 percent employer contribution looks like across your current and projected payroll. Does your current per-pupil funding and tuition model support this overhead without cutting core services?
• Audit your payroll capabilities: Contact your payroll processor or HR software vendor immediately to verify they have the backend capability to handle PERA's specific reporting, coding, and deduction requirements for the Local Government Division.
• Survey your employees: Do not make assumptions about what your staff wants. Survey them to find out if they actually want a pension plan enough to accept an 11.0 percent mandatory reduction in their take-home pay.

Follow the Money

The most appealing aspect of this legislation from a state taxpayer perspective is its absolute lack of state-level funding requirements. The official legislative fiscal note projects exactly $0 in state revenue impacts and $0 in state expenditures. There are no general fund appropriations attached to this bill, and it does not impact TABOR refunds. Every single dollar required to fund these new retirement benefits will come directly from the facility schools that choose to participate and the paychecks of their employees.

For the broader PERA Local Government Division Trust Fund, the impact is expected to be a wash. While PERA will take on new future liabilities by promising retirement payouts to these specialized educators, those future liabilities are offset by the immediate influx of the 15.8 percent employer and 11.0 percent employee contributions. Because there are only about 1,000 facility school employees statewide as of late 2025, even if every single approved school opts in, the overall PERA system will not experience any significant structural changes or funding shocks. PERA's administrative staff will see a minor, manageable bump in workload to process the initial affiliation applications, which they will absorb within existing resources.

Where This Bill Stands

This bill is moving quickly through the legislative process with strong bipartisan backing, sponsored by Democrats and Republicans in both chambers. It was formally introduced in the House on February 4, 2026, and assigned to the House Education Committee. On February 19, 2026, the committee reviewed the legislation, found no need for amendments, and referred it directly to the House Committee of the Whole.

Next up, the bill will face a full floor vote in the House before crossing over to the Senate for a similar committee and floor process. Given the zero-dollar state fiscal impact and the non-controversial nature of allowing private educational facilities to opt into a public retirement system on their own dime, it has a very high probability of passing into law. If it clears the final hurdles and is signed by the governor, the act will officially take effect 90 days after the legislative session adjourns (estimated to be August 12, 2026), assuming no citizen referendum is filed against it.