Retirement insights from a Colorado PERA perspective

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The Board of Trustees of Colorado PERA is a group of 16 professionals who are responsible for overseeing PERA’s investment program and the administration of PERA’s benefits. The Colorado General Assembly, with the approval of the Governor, can change PERA benefits or contributions.



State law describes the responsibilities of the Board and the process for Trustees to be selected.



Three Trustees are appointed by the Governor and confirmed by the State Senate, 12 are elected by PERA members and retirees, and the State Treasurer serves as an ex officio Trustee.



Details on current Trustees may be viewed <a href="https://www.copera.org/recap-of-pera-boards-june-2021-meeting" class="broken_link">here</a>.



<a href="https://peraontheissues.com/wp-content/uploads/2017/02/TrusteesFinal2-17-1.pdf" target="_blank" rel="noreferrer noopener">PERA Board of Trustees Fact Sheet</a>

PERA Board: Working for You

In June, the Board of Trustees of Colorado PERA released the <a href="https://www.copera.org/investment-returns-beat-benchmark-in-difficult-year" class="broken_link">Comprehensive Annual Financial Report</a> (CAFR). The CAFR disclosed the total PERA fund investment return from 2015, which was 1.5 percent.



“It was a very challenging year in terms of the investment markets,” noted PERA Executive Director Gregory W. Smith in the release of the CAFR. “We were able to achieve a positive return in an environment when a number of other public funds did not, which affirms PERA’s investment strategy and allows us to offer our retirees and the entire state a reliable source of economic stability,” Smith added.



Taking into account the 2015 investment return, the PERA trust fund is now 60 percent funded, meaning PERA’s current and future liabilities exceed its assets. For recent historical perspective, in 2010, PERA was threatened with insolvency and the General Assembly passed legislation to reduce benefits for members and retirees.



During the 2009 legislative session and as the significant decline in the financial markets associated with the Great Recession were recognized, the General Assembly directed the PERA Board to develop recommendations that would return the PERA trusts to long-term sustainability. Thus, the resulting <a href="https://content.copera.org/pera-board-of-trustees-remains-vigilant-about-funded-status/">2010 legislation</a> began as a recommendation from the Board after an extensive review and analysis process that included discussions with stakeholders throughout the state. The Board unanimously supported the reform measures of <a href="https://www.copera.org/preview?pageid=41010">Senate Bill 10-001</a> – even those Board members who were directly impacted by the personal sacrifice shared by all PERA members.



The most important responsibility of PERA Trustees is to act as <a href="https://www.copera.org/2018-board-election-underway" class="broken_link">fiduciaries</a>. Trustees are bound by a fiduciary obligation to act in the best interests of PERA members, retirees, and other beneficiaries, including survivors and those on disability. The changes that began in 2010 <a href="https://www.copera.org/puerto-rico-and-pensions" class="broken_link">brought PERA back to solvency</a>. Based on last year’s financial performance, it will take 44 years to reach 100 percent funding. While that is certainly a long time, PERA projections, along with independent projections performed for the Office of the State Auditor, show PERA will continue to be able to pay benefits now and into the future. Despite the continued solvency of PERA, the increased duration to reaching full funding is concerning.



The Board has just concluded two rigorous Request for Proposals (RFP) processes to select both an investment consultant and actuarial firm, making final selections in January and June, respectively. This positions the Board for in-depth analyses of the investment and actuarial assumptions that are used in assessing PERA’s financial health in the future.



The Board will share that information with members and a range of other stakeholders, including legislators who have the responsibility for setting PERA benefits and funding (the Board does not have that power). The PERA Board continues to remain open to all viable ideas that serve the members and their beneficiaries.



Learn more about the <a href="https://www.copera.org/recap-of-pera-boards-june-2021-meeting" class="broken_link">PERA Board of Trustees</a>.

PERA Board of Trustees Remains Vigilant About Funded Status

The <a href="https://www.copera.org/colorado-pera-board-serves-the-membership" class="broken_link">results</a> are in, and four members will begin serving on the PERA Board of Trustees on July 1. Colorado PERA members <a href="https://www.copera.org/colorado-pera-board-serves-the-membership" target="_blank" rel="noreferrer noopener" class="broken_link">elected</a> the Honorable Will Bain from the Judicial Division, David Hall from the State Division, Robert Lamb from the Local Government Division, and William N. Parker from the School Division to the 16-member Board.



<ul>
<li>Bain is a District Judge in the 4th&nbsp;Judicial District and replaces Judge Brian T. Campbell who has served on the Board since 2015 and did not seek re-election.</li>



<li>Hall is a Sergeant and Legislative Liaison with the Colorado State Patrol and replaces Richard Delk who has served on the Board since 2008 and did not seek re-election.</li>



<li>Lamb is the Finance Director for Boulder County and fills the seat he was appointed to in 2015.</li>



<li>Parker is the International Baccalaureate Coordinator and Literacy Teacher at Northeast Elementary School in Brighton School District 27J and replaces Amy Nichols who has served on the Board since 2000 and did not seek re-election.</li>
</ul>



Even though&nbsp;Trustees are elected by certain segments of the PERA membership, all Trustees serve as <a href="https://www.copera.org/2018-board-election-underway" class="broken_link">fiduciaries</a>. This means they must act in the best interests of all plan members and benefit recipients. However, acting in the best interest of the membership does not mean the Board only advocates for benefit improvements. In fact, the opposite has often been true. (Note though that only the Colorado General Assembly, with the approval of the Governor, can change PERA member benefits.)



In 2009, the General Assembly asked that the Board develop recommendations to return the trust funds to long-term sustainability after the Great Recession. The Board put together a comprehensive package of benefit reductions and contribution increases that was largely <a href="https://www.copera.org/five-years-after-the-great-recession-pera-continues-progress-toward-full-funding" target="_blank" rel="noreferrer noopener" class="broken_link">enacted by the legislature in 2010</a> and signed by former Governor Ritter in late February of that year.



The PERA Board of Trustees, a majority of whom are elected by the PERA membership, voted unanimously in 2009 for the Legislature to cut benefits for all PERA members – including themselves. The results of the&nbsp;Trustees&#8217; decision led to successful recommendations and bipartisan support for a reform package that was <a href="https://www.copera.org/investment-returns-beat-benchmark-in-difficult-year" class="broken_link">one of the first in the country</a> to implement responsible reforms for a public retirement plan. As fiduciaries, Trustees understood that taking a shared sacrifice approach to <a href="https://www.copera.org/puerto-rico-and-pensions" class="broken_link">returning PERA to financial stability</a> meant that everyone had to give up something in order for everyone to benefit in the long run.

Colorado PERA Board Serves the Membership

Colorado PERA members will be receiving ballots for the 2016 Board Election in May. This year, members of the State, School, Local Government, and Judicial Divisions will be casting their votes for Trustee candidates. The State Division and School Division seats are for four-year terms. The Local Government position is a two-year term and the Judicial Division position is a three-year term. There will not be an election for either of the two Retiree seats on the Board this year, and because there was only one candidate for the Denver Public Schools (DPS) Division, current Trustee Amy Grant was appointed in March by the Board to a four-year term filling the DPS seat when her term expires on June 30.



The following Trustees will be leaving the Board when their terms expire on June 30:



<ul>
<li>Rich Delk of the State Division who has served on the Board since 2008</li>



<li>Amy L. Nichols of the School Division who has served on the Board since 2000</li>



<li>Brian T. Campbell of the Judicial Division who decided not to run in 2016 after filling a vacancy created in 2015 when the Honorable Richard Gabriel was appointed to the Colorado Supreme Court</li>
</ul>



Bob Lamb, the current Local Government Division Trustee, was appointed to a Board vacancy in 2015 and is seeking to complete the remainder of the two-year term.



This year, voters will be able to vote using the Internet, by phone, or by mailing in their ballot. The voting deadline is May 31, 2016.



Ballots will contain biographical information on the candidates running in each division. Candidates also provided responses to a series of questions about PERA. These responses may be viewed <a href="https://content.copera.org/colorado-pera-board-election-reminder/" target="_blank" rel="noreferrer noopener">here</a>.



As a reminder, all Trustees serve as <a href="https://www.copera.org/2018-board-election-underway" class="broken_link">fiduciaries</a>. This means that they must act in the best interests of all plan members and benefit recipients. Trustees are not compensated for their service on the Board, but are reimbursed for necessary expenses.



For more details on the PERA Board of Trustees, please see this <a href="https://content.copera.org/colorado-pera-board-election-reminder/">PERA on the Issues article</a>.



See information on <a href="https://www.copera.org/recap-of-pera-boards-june-2021-meeting" target="_blank" rel="noreferrer noopener" class="broken_link">current Trustees</a>.

Colorado PERA Board Election Reminder

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

The Board of Trustees of Colorado PERA is a group of 16 professionals who are responsible for overseeing PERA’s investment program and the administration of PERA’s benefits. The Colorado General Assembly, with the approval of the Governor, can change PERA benefits or contributions.



State law describes the responsibilities of the Board and the process for Trustees to be selected.



Three Trustees are appointed by the Governor and confirmed by the State Senate, 12 are elected by PERA members and retirees, and the State Treasurer serves as an ex officio Trustee.



Each May, Colorado PERA holds an election for Trustees whose terms of office are expiring. <a href="https://www.copera.org/colorado-pera-board-of-trustees" target="_blank" rel="noreferrer noopener" class="broken_link">Candidacy packets are available beginning in January.</a>



Details on current Trustees may be viewed <a href="https://www.copera.org/recap-of-pera-boards-june-2021-meeting" target="_blank" rel="noreferrer noopener" class="broken_link">here</a>.

Tag Archives:

PERA Board: Working for You

PERA Board of Trustees Remains Vigilant About Funded Status

Colorado PERA Board Serves the Membership

Colorado PERA Board Election Reminder

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

Colorado PERA Board of Trustees

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