PERA’s executive team hosted two virtual Town Hall meetings on Wednesday, June 26 to provide updates on PERA and answer questions from members and retirees.

Chief Executive Officer/Executive Director was joined by Chief Investment Officer/Chief Operating Officer Amy C. McGarrity, Chief Benefits Officer Patrick Lane, and Chief Operating Officer Jeremy Hill.

We’ve included clips of some of the executives’ answers below, and full recordings of each Town Hall are available at copera.org/townhall.

How did PERA’s investments perform last year and what is PERA’s financial status?

McGarrity began by highlighting PERA’s financial results from 2023, as reported in the recently released 2023 Annual Comprehensive Financial Report.

“For the year ended December 31, 2023, PERA’s investment portfolio earned a positive return of 13.4% net-of-fees,” McGarrity said. “The value of the total PERA Defined Benefit Plan was $61.5 billion at the end of the year, and PERA’s funded status was 69.6%.”

PERA remains on track to meet its funding goals, and as such, there will be no automatic adjustments to member and employer contributions or annual benefit increases. Retirees and beneficiaries will receive a 1% Annual Increase in July 2024 and another 1% in 2025.

Explore PERA’s financial results in an interactive format at copera.org/snapshot.

As PERA’s new CEO, do you anticipate making any major changes, such as implementing a larger annual benefit increase for retirees?

Roth reiterated that staff and the Board understand the challenge inflation has posed in recent years as the Annual Increase—which is set in statute and can only adjust up or down based on PERA’s funding progress, has not kept pace.

“I, as Executive Director, do not have the power or authority to make changes to the Annual Increase,” Roth said. “We understand and are doing everything we can to address financial security for our retirees, as is central to our mission.”

Has PERA been planning for the possibility of a recession, and what could that mean for the portfolio?

McGarrity discussed PERA’s strategic asset allocation—which is set by Board—and its focus on long-term performance. In addition, the Board is currently conducting a study of its investment strategy known as an asset/liability study, and that process includes modeling many different scenarios.

“In that 30-year capital market assumption set, they have a variety of market scenarios, there are recessions, there are bull markets,” McGarrity said. “So as it relates to shorter term or medium term economic events…they’re incorporated into those long-term assumptions.”

PERACare premiums have largely held steady over the past few years; will they remain the same next year?

“I’ll be very direct and say, ‘No.’ PERACare premiums will be going up for the 2025 plan year,” Lane said. “Our Medicare Advantage participants have been protected from premium increases for the last three years because of the rate we were able to get guaranteed when we renewed three years ago. Unfortunately, that rate guarantee is expiring this plan year.”

Lane added that regulatory changes have also prompted insurance carriers to raise their rates for the coming plan year. PERA is still working out the details with carriers and expects to provide 2025 plan information in the fall.

What is PERA doing about Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)?

Lane said that since the WEP and GPO are provisions of federal law, any changes would have to come from Congress. And while legislators have introduced various bills related to the issue over the years, lawmakers haven’t come to an agreement on a path forward.

“What would happen if the WEP/GPO were to be repealed, that would mean more money coming out of the Social Security trust fund, and that is really where legislation has failed in the past,” Lane said. “I think there are a lot of members of Congress who are interested in the subject and are open to the conversation, but they have yet to reach an agreement on how to actually fund that additional money that would be coming out of the trust fund.”

We follow this issue closely and will provide any updates on federal WEP/GPO legislation when we can.

Where do you see PERA headed in the future and how can I be sure I will receive my full benefit when I retire?

“We have been delivering benefits for almost a century, and we are focused on doing the exact same thing for the next century; your benefits will be here,” Roth said. “Colorado PERA is here for its members and we look forward to serving you as we move into the future together.”

For full recordings of both Town Halls, visit copera.org/townhall.