Retirement insights from a Colorado PERA perspective

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Colorado PERA once again received a clean audit at its annual hearing with the Legislative Audit Committee.



<h4 class="wp-block-heading">Results of outside audit</h4>



Every year, the State hires an independent auditor to examine PERA’s financial reports, compliance, and internal controls. Since 2015, the State has enlisted CliftonLarsonAllen, a nationally recognized financial services firm, to conduct that work. CliftonLarsonAllen presented the results of this year’s audit at the Legislative Audit Committee’s Aug. 5 meeting.



As in years past, the audit did not find any issues with PERA’s recently released 2023 Annual Comprehensive Financial Report and did not find any deficiencies or weaknesses in PERA’s internal controls.



RELATED: <a href="https://www.copera.org/pera-on-the-issues/pera-board-releases-2023-annual-report" target="_blank" rel="noreferrer noopener">PERA Board Releases 2023 Annual Report</a>



<h4 class="wp-block-heading">Additional interim committee activity</h4>



In addition to the Legislative Audit Committee, PERA staff and consultants meet with other legislative panels throughout the summer, including the Pension Review Subcommittee and Pension Review Commission. The Pension Review Subcommittee is tasked with making recommendations to the PERA Board and the Pension Review Commission. The Commission may then draft legislation that lawmakers may introduce in the next legislative session in January.



We’ll be monitoring the ongoing legislative activity at the State Capitol throughout the interim period and will post updates here on PERA On The Issues when we have them.

PERA Receives Results of 2023 Financial Audit

In this story:



<ul>
<li>Committee members heard from PERA leaders, external auditors and actuarial consultants</li>



<li>External auditors gave PERA’s 2020 annual report a clean audit with no issues</li>



<li>PERA gets a “green light” on its funding progress</li>
</ul>



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PERA leaders and actuarial consultants appeared before the Colorado General Assembly’s Legislative Audit Committee on Aug. 18. The purpose of the hearing was to review PERA’s <a href="https://content.copera.org/how-its-made-peras-financial-report/" target="_blank" rel="noreferrer noopener">2020 Comprehensive Annual Financial Report</a>, released earlier this summer, and to review the findings of an external audit of the report. Committee members also heard an update from PERA’s actuarial consultants on PERA’s funded status and had the opportunity to ask questions.



Below is a summary of information presented at the hearing. To listen to an audio recording of the full hearing, <a href="https://sg001-harmony.sliq.net/00327/Harmony/en/PowerBrowser/PowerBrowserV2/20210824/67/12036#info_" target="_blank" rel="noreferrer noopener">click here</a>.



<h4 class="wp-block-heading">Results of PERA’s annual audit</h4>



Every year, the Office of the State Auditor hires an independent auditor to review PERA’s financial status and fiscal controls. CliftonLarsonAllen LLP has been auditing PERA’s annual statements since 2015.



For the year that ended Dec. 31, 2020, the auditors gave the annual report a clean audit, with no significant issues or outstanding recommendations.



<a href="https://leg.colorado.gov/sites/default/files/documents/audits/copera_legislative_audit_report_dec_2020.pdf" target="_blank" rel="noreferrer noopener">Click here</a> to read the full audit report.



<h4 class="wp-block-heading">PERA gets a ‘green light’</h4>



As part of its annual financial reporting, PERA enlists actuarial consulting firm Segal to issue an assessment of PERA’s funding progress called Signal Light Reporting. The report uses a simple color-coded system similar to a traffic signal — shades of green, yellow and red — to give a clear representation of whether PERA is on track to eliminate its unfunded liability.



Segal simulates thousands of possible scenarios to test the effects of different variables — like investment returns and public employer payroll changes, for example — on the likelihood of PERA reaching its target of full funding by 2048. The projected results range from dark green (fully funded ahead of schedule) to dark red (insolvent within 20 years). As of Dec. 31, 2020, all five division trust funds were in “green” or “dark green” status, meaning they are expected to be fully funded by 2048.



<figure class="wp-block-image size-large"><img decoding="async" src="https://content.copera.org/pera-receives-clean-audit-positive-funding-assessment-at-committee-hearing/"" class="wp-image-4626"/></figure>



<a href="https://content.copera.org/pera-receives-clean-audit-positive-funding-assessment-at-committee-hearing/" target="_blank" rel="noreferrer noopener">Click here</a> to read the full Signal Light report.



The Legislative Audit Committee is one of several legislative committees and subcommittees that PERA reports to regularly. Others include the Joint Budget Committee, Joint Finance Committee, Pension Review Subcommittee, and Pension Review Commission. These regular meetings with lawmakers allow for robust oversight and transparency into the state’s largest public employee retirement system.

PERA Receives Clean Audit, Positive Funding Assessment at Committee Hearing

The Colorado Public Employees’ Retirement Association Board of Trustees requests applications for an outside member of its Audit Committee. The Committee meets at least three times per year and assists the Board in fulfilling its fiduciary responsibilities as they relate to accounting policies and financial reporting, the system of internal controls, PERA’s Standards of Professional and Ethical Conduct, the internal audit process, and the practices of the Internal Audit Director. The successful candidate must meet PERA’s guidelines for independence. The deadline for application is August 20, 2021.



<h1 class="wp-block-heading">Heading</h1>



To learn more about the position and to apply please go to “<a href="https://content.copera.org/p4581/" target="_blank" rel="noreferrer noopener">Colorado PERA Seeks an Outside Member for its Audit Committee</a>”.



Colorado PERA provides retirement and other benefits to more than 630,000 current and former teachers, State Troopers, corrections officers, snow plow drivers, and other public employees who provide valuable service to all of Colorado. PERA is a vital and stable contributor to Colorado’s economy, distributing more than $4.2 billion in 2020 to more than 107,000 retirees who live in Colorado.

Colorado PERA Seeks an Outside Member for its Audit Committee

Report Marks 5th Consecutive Year for Clean Audit



For the fifth consecutive year, the Colorado Public Employees’ Retirement Association (PERA) received a <a href="https://content.copera.org/colorado-pera-2015-financials-receive-clean-audit/">clean financial audit</a>. Auditors did not find any significant deficiencies or material weaknesses in PERA’s financial reporting or controls. Nor did their report make any recommendations for best practices improvements.



Every year, the Office of the State Auditor contracts with an independent accounting firm that reviews the financial operations of PERA. The findings of the 2015 audit were released today after receiving approval from Legislative Audit Committee of the Colorado General Assembly. The audit was conducted by national firm <a href="http://www.claconnect.com/">CliftonLarsonAllen</a>. PERA’s actuary, <a href="http://cavmacconsulting.com/">Cavanaugh Macdonald</a>, also provided information about the funded status of the state’s largest retirement system.



In addition to reviewing and approving the audit, the Legislative Audit Committee also reviewed PERA’s implementation of a new reporting methodology designed to communicate PERA’s financial health. PERA’s use of this new “signal light” technology, developed by <a href="http://pensiontrusteeadvisors.com/">Pension Trustee Advisors</a> in accordance with Senate Bill 14-214, showed the PERA trusts to be in the yellow category, meaning that the trusts are sustainable, but will require more than 40 years to reach 100 percent funding levels. The yellow designation reflects that the plan will be able to pay benefits into the future, unlike the situation in 2009 when the fund was predicted to run out of funds in 20 years. As a result of those projections, the General Assembly passed <a href="https://www.copera.org/preview?pageid=41010">Senate Bill 10-001</a>, which resulted in significant reforms that returned the fund to being able to always pay benefits due.



“This year’s clean audit and PERA’s adoption of the signal light technology demonstrate our commitment to transparency, as well as our desire to ensure the highest level of quality in all of our operations,” said Gregory W. Smith, PERA Executive Director. “We take seriously our responsibility to provide a secure retirement for our members. That means ensuring that our operations are sound and providing an honest assessment of the financial status of the fund,” he added.



Colorado PERA provides retirement and other benefits to more than 547,000 current and former teachers, State Troopers, corrections officers, snow plow drivers, and other public employees who provide valuable service to all of Colorado. PERA is a vital and stable contributor to Colorado’s economy, distributing $3.7 billion in 2015 to retirees who live in Colorado. PERA is one of Colorado’s best investments.

Colorado PERA 2015 Financials Receive Clean Audit

Amy McGarrity, PERA’s Deputy Chief Investment Officer, has been appointed to the <a href="http://pcaobus.org/About/Advisory/Pages/Investor_Advisory_Group_Members.aspx" target="_blank" rel="noreferrer noopener">Public Company Accounting Oversight Board (PCAOB) Investor Advisory Group</a> for the 2015-2018 term. McGarrity joins 21 other national leaders to provide views and advice on broad policy issues and other matters that impact investors.



The PCAOB aims to improve audit quality, reduce the risks of auditing failures in the U.S. public securities market, and promote public trust in both the financial reporting process and auditing profession.



What is the PCAOB?



<a href="http://pcaobus.org/About/pages/default.aspx" target="_blank" rel="noreferrer noopener">The PCAOB</a> oversees the audits of public companies, working to protect the interests of investors by promoting informative, accurate, and independent audit reports. The PCAOB also oversees the audits of broker-dealers to promote investor protection.



Created by the <a href="http://pcaobus.org/About/History/Documents/PDFs/Sarbanes_Oxley_Act_of_2002.pdf" target="_blank" rel="noreferrer noopener">Sarbanes-Oxley Act of 2002</a> (which was amended by Dodd-Frank in 2010), the PCAOB is a nonprofit corporation established by Congress. Prior to Sarbanes-Oxley, the auditing profession had been self-regulated. For the first time, the law required oversight of external and independent auditors of U.S. public companies.



The five members of the PCAOB Board are appointed by the <a href="https://content.copera.org/colorado-pera-deputy-chief-investment-officer-named-to-national-investor-advisory-group/" target="_blank" rel="noreferrer noopener">Securities and Exchange Commission</a> (SEC) after consultation with the Chairman of the <a href="https://www.federalreserve.gov/" target="_blank" rel="noreferrer noopener">Board of Governors of the Federal Reserve System</a> and the <a href="https://www.treasury.gov/about/Pages/Secretary.aspx" target="_blank" rel="noreferrer noopener">Secretary of the Treasury</a>.



The SEC has oversight authority over the PCAOB, including the approval of the Board&#8217;s rules, standards, and budget.



“Colorado PERA has a strong history with the PCAOB, and I am pleased to be the second representative from Colorado PERA to serve on a PCAOB advisory committee,” said McGarrity. “We look forward to our continued participation in the discussion surrounding audit standards and their relevancy to investors.”



McGarrity oversees the risk, compliance, performance and investment operations functions for Colorado PERA, in addition to the Opportunity Fund asset class. She also serves as a global equity analyst and co-portfolio manager for Colorado PERA’s $1.3 billion internally-managed active global portfolio. Previously, McGarrity was the Chief Investment Officer for the Denver Public Schools Retirement System. She has also held prior investment positions at Buck Consultants, Prima Capital Holding, William M. Mercer Investment Consulting, and Caxton Corporation. McGarrity is a CFA charterholder and a member of the CFA Institute and the CFA Society of Colorado.



Previously, Colorado PERA Chief Investment Officer Jennifer Paquette served on the PCAOB Standing Advisory Committee.



<a href="https://www.copera.org/colorado-pera-deputy-chief-investment-officer-named-to-national-investor-advisory-group" target="_blank" rel="noreferrer noopener" class="broken_link">Read</a> the news release.

Colorado PERA Deputy Chief Investment Officer Named to National Investor Advisory Group

A recent study of retirement plan design shows Colorado PERA is more efficient and uses dollars more effectively than other types of plans in use today.&nbsp;Three simple charts summarize the findings.



Read the <a href="https://www.copera.org/independent-report-finds-pera-efficient-and-effective" target="_blank" rel="noreferrer noopener" class="broken_link">Gabriel, Roeder, Smith &amp; Company report</a> on PERA’s income replacement in retirement efficiency and cost effectiveness.

Independent Report Finds PERA Efficient and Effective

For the third year in a row, auditors found no significant deficiencies or material weaknesses in PERA’s financial reporting or controls. Each year, independent auditors hired by the Office of the State Auditor conduct a review of PERA’s financial status and fiscal controls, reporting the results to the Legislative Audit Committee (LAC) of the Colorado General Assembly.



The <a href="https://www.copera.org/colorado-pera-receives-another-clean-financial-audit" target="_blank" rel="noreferrer noopener" class="broken_link">2013 audit</a>, presented on August 26 to the LAC, was conducted by KPMG and overseen by the State Auditor’s Office.



Colorado PERA is committed to transparency in everything we do and that’s especially true in communicating the financial status of the plan to our membership, our employers, elected officials, the media, and taxpayers.



PERA’s <a href="https://www.copera.org/colorado-pera-receives-another-clean-financial-audit" target="_blank" rel="noreferrer noopener" class="broken_link">Comprehensive Annual Financial Report</a>, which includes audited financial statements, has served as the model for the industry and has won the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officer’s Association (GFOA) for 28 consecutive years. The <a href="https://www.copera.org/colorado-pera-receives-another-clean-financial-audit" target="_blank" rel="noreferrer noopener" class="broken_link">Summary Annual Financial Report,</a> which is mailed to all members and retirees, has received this recognition for 11 consecutive years. The Summary Annual Financial Report contains easy to read information about PERA&#8217;s investments, funded status, and the economic impact of paying $3.35 billion in retirement distributions to retirees who call Colorado home.



For more information on the economic impact of Colorado PERA on the state’s economy, please see this previous PERA on the Issues post: <a href="https://www.copera.org/colorado-pera-receives-another-clean-financial-audit" target="_blank" rel="noreferrer noopener" class="broken_link">The Economic Impact of Colorado PERA</a>.

Colorado PERA Receives Another Clean Financial Audit

Colorado PERA is committed to transparency in everything we do and that’s especially true in communicating the financial status of the plan to our membership, our employers, elected officials, the media, and the public.



Each year, independent auditors hired by the Office of the State Auditor conduct a review of PERA’s financial status and fiscal controls, reporting the results to the Legislative Audit Committee (LAC) of the Colorado General Assembly. For the second year in a row, auditors found no significant deficiencies or material weaknesses in PERA’s financial reporting or controls.



The 2012 audit, presented on July 16 to the LAC, was conducted by KPMG and overseen by the State Auditor’s Office.



PERA sets a high standard for managing the assets and administering benefits for our 500,000 members and retirees. This is reflected in our <a href="https://www.copera.org/about" target="_blank" rel="noreferrer noopener">Mission Statement and Guiding Principles</a>, and as the KPMG audit demonstrates, it is a standard we consistently meet. We hold assets in trust for our members and we take seriously the responsibility of providing a stable and secure retirement for Colorado’s public employees.



PERA’s <a href="https://content.copera.org/colorado-pera-receives-another-clean-financial-audit-2/" target="_blank" rel="noreferrer noopener">Comprehensive Annual Financial Report</a>, which includes audited financial statements, has served as the model for the industry and has won the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officer’s Association (GFOA) for 27 consecutive years. The <a href="https://www.copera.org/colorado-pera-receives-another-clean-financial-audit-2" target="_blank" rel="noreferrer noopener" class="broken_link">Summary Annual Financial Report</a>, which is mailed to all members and retirees, has received this recognition for 10 consecutive years. The Summary Annual Financial Report contains easy to read information about PERA&#8217;s investments, funded status, and the economic impact of paying $3.2 billion in retirement distributions to retirees who call Colorado home.



More information on PERA’s annual financial audit is available in the <a href="https://www.copera.org/colorado-pera-receives-another-clean-financial-audit-2" target="_blank" rel="noreferrer noopener" class="broken_link">KPMG audit report</a>.

Tag Archives:

PERA Receives Results of 2023 Financial Audit

PERA Receives Clean Audit, Positive Funding Assessment at Committee Hearing

Colorado PERA Seeks an Outside Member for its Audit Committee

Colorado PERA 2015 Financials Receive Clean Audit

Colorado PERA Deputy Chief Investment Officer Named to National Investor Advisory Group

Independent Report Finds PERA Efficient and Effective

Colorado PERA Receives Another Clean Financial Audit

Colorado PERA Receives Another Clean Financial Audit

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