Colorado PERA Lowers Fees for 401k and 457b Plans

Colorado PERA offers a fantastic 401k and 457b plan to all PERA-affiliated employers, which includes all public school employees. These plans are almost always better than the 403bs or 457bs offered through their school districts by other vendors (see Littleton Public Schools, Cherry Creek, Denver, Douglas County, and Aurora as examples).

At Friday’s Board Meeting, PERA announced that fees for both the 401k and 457b in 2025 will be even lower due to the health of the plans.

• PERA 401k: They will waive the 0.03% administrative fee for 2025 and keep the monthly fee at $1.00. This is the fourth year in a row they have been able to waive the 0.03% administrative fee on the 401k.
  
• PERA 457b: The will waive the 0.03% administrative fee for 2025 and lower the monthly fee from $1.50 to $1.00. This is the first year they have been able to waive the fee for the 457 plan. (As a newer and smaller plan, it’s still growing assets so is more “expensive” to run.)
  
• DC Plan: While not particularly relevant to this post, for PERA members who choose the Defined Contribution Plan over the Defined Benefit Plan (only available in some divisions), the 0.03% administrative fee will also be waived in 2025.

Please note this is not necessarily a permanent reduction in the fees, as it’s based on the current health of the plan. So it’s certainly possible that the 0.03% administrative fee will not be waived in future years. (I’m hopeful, however, that the 457 plan will now stay at $1.00 per month like the 401k plan.)

So here are the current fees for the investment choices in the PERA 401k and 457b plans (plus the $1.00/month account fee). (When the 0.03% administrative fee is not waived, you would add that to the expense ratio.)

They also announced that they have now created a Target Date 2070 fund as a new option. In addition, they are making rule changes as a result of Secure Act 2.0 that will require PERA employers to offer the Roth version of the 401k (all employers have to offer the 401k, but currently an opt-in to offer the Roth) and the Roth version of the 457 (for those employers who have opted in to the 457; currently offering the Roth is optional even if they offer the traditional 457) beginning in 2026.

So, as always, if you are in a Colorado school district, I highly recommend you use PERA’s 401k instead of any 403b vendors available in your district, and you also use PERA’s 457 plan if your district has opted into it. Even for districts who have put their 403b plans out to bid (as noted above), PERA’s 401k is still superior and, over time, will result in much greater earnings than if you use other vendor’s 403b and/or 457b plans.