Retirement insights from a Colorado PERA perspective

A distant view shows a mountainous landscape with sloping peaks, green trees in the foreground, and a cloudy sky above.

The PERA Board of Trustees held its annual Planning Session September 18 to 20 in Colorado Springs.



Over the course of three days, Trustees participated in informational meetings, workshops, and took action on a number of important items, some of which are summarized below.



<h2 class="wp-block-heading">Strategic planning</h2>



An important part of the Board’s duties is laying out PERA’s strategic direction and priorities, and the Trustees have spent several meetings working on the organization’s next strategic plan.



During the most recent meeting, the Board reviewed the results of surveys sent to various stakeholders, including members, retirees, and employers. Through those surveys, the Trustees were able to identify some of PERA’s top strengths, weaknesses, opportunities, and threats, which will help lay out the organization’s goals for the next several years.



The Board expects to have a plan draft ready for Trustee review in January.



<h2 class="wp-block-heading">CEM Benchmarking report</h2>



Each year, the PERA Board receives a report from CEM Benchmarking that rates PERA on the various services it provides to members and the cost of providing those services, as well as comparing PERA to other similar public pensions.



This year’s CEM report gave PERA a service score of 85 compared to the peer average of 81. PERA earned particularly high scores on factors such as the average time a member spends waiting on the phone to talk to a customer service representative, the features and functionality of the secure online member portal, and participation in member education webinars.



CEM found PERA’s administrative costs amount to $58 per member, below the peer average of $67. Overall, the CEM report found PERA provides a higher level of service at a lower cost than the average public pension plan.



<h2 class="wp-block-heading">Pension Review Subcommittee’s review of assumptions</h2>



Every three years, the State Legislature’s Pension Review Subcommittee is tasked with commissioning a report from an independent firm that is meant to evaluate the various assumptions PERA uses to forecast its financial health, as well as determining whether PERA is on track to meet its goal of full funding and a handful of other assessments.



The Subcommittee began that process in January and chose Switzerland-based PNYX Group to conduct the analysis. PNYX then presented its findings and recommendations in July.



Using its own models and projections, PNYX opined that some of PERA’s key assumptions should be adjusted based on their own assumptions and methodologies, and stated the fund could be facing a significant shortfall in future years as a result. Therefore, PNYX recommended a handful of policy options, primarily related to increasing contributions—including $2 billion from the State—in order to improve the fund’s position. Members of the Pension Review Subcommittee and Pension Review Commission expressed doubts about the feasibility of such changes.



In discussing with the Board, PERA staff and the board’s consultants presented on some of the methods and findings of the report, and highlighted their own confidence in the assumptions, methodologies, and models that form the basis of their own recommendations to the PERA Board. Additionally, the review missed key elements that would have made the report more comprehensive and on point, they said. For example, the Board just concluded a study of PERA’s strategic asset allocation and is beginning a study comparing actual experience over the past four years to actuaries’ projections, both of which could help address some of the findings of the PNYX report.



PERA staff, along with the PERA Board’s actuarial and investment consultants, presented a <a href="https://leg.colorado.gov/content/ipensionrevewsubcomm2024ascheduleandmeetingmaterials" target="_blank" rel="noreferrer noopener">formal response</a> to the PNYX report on September 23 and may also address the report and its findings with the Pension Review Commission on September 27.



<h2 class="wp-block-heading">Asset/liability study</h2>



The Board concluded its yearlong asset/liability study and adopted new long-term asset allocation targets for the PERA Defined Benefit Plan portfolio. The changes aim to add diversification to the portfolio over time and enhance the potential for future returns.



READ MORE: <a href="http://copera.org/pera-on-the-issues/pera-board-adopts-new-strategic-asset-allocation-following-study">PERA Board Adopts New Strategic Asset Allocation Following Study</a>



<h2 class="wp-block-heading">2025 Board meeting dates</h2>



Finally, Trustees wrapped up the September Planning Session by approving the calendar for 2025 Board meetings, choosing the following five dates:



<ul>
<li>January 17</li>



<li>March 14</li>



<li>June 27</li>



<li>September 17-19 (Planning Session)</li>



<li>November 21</li>
</ul>







PERA Board meetings are streamed live on <a href="https://www.copera.org/about/board-of-trustees" class="broken_link">copera.org</a> and include time for public comment. In response to a recommendation from the Pension Review Commission, meeting recordings will be available online following the Board’s November 15, 2024 meeting.

PERA Board Discusses Strategic Plan, Investment Strategy and More at 2024 Planning Session

The&nbsp;<a href="https://www.copera.org/about/board-and-leadership" target="_blank" rel="noreferrer noopener">Colorado PERA Board of Trustees</a>&nbsp;convened for three days in Colorado Springs for its annual September planning session. The planning session concluded with the Board meeting on Friday, Sept. 22.



Over the course of the three days, Trustees engaged in a number of discussions, education sessions, and planning meetings. Below is a summary of some of the highlights and important actions the Board took.



<h4 class="wp-block-heading">Executive Director search</h4>



The Board committee tasked with overseeing the search for PERA’s next Executive Director announced to the full Board that it has selected an outside firm to assist in that search. Hudepohl &amp; Associates, a firm with experience in executive searches for public pension plans, will conduct a nationwide search over the coming months.



READ MORE:&nbsp;<a href="https://peraontheissues.com/pera-board-selects-firm-to-conduct-executive-director-search" target="_blank" rel="noreferrer noopener">PERA Board Selects Firm to Conduct Executive Director Search</a>



<h4 class="wp-block-heading">CEM&nbsp;Benchmarking&nbsp;Report</h4>



Each year, CEM&nbsp;Benchmarking&nbsp;releases a report comparing PERA to other public pension plans on factors such as plan administration costs and the quality of services provided to members. The most recent report, which CEM presented at the planning session, shows PERA continues to provide a high level of service at low cost to its members relative to its peers.



According to CEM, PERA’s administrative cost was $55 per member in 2022, below the peer average of $63. PERA’s service score of 83 was the 10th&nbsp;highest of the 61 pension systems around the world that were included in the report. Among its peers of similarly sized U.S. plans, PERA ranked fourth.



Notably, the report showed that most plans are seeing an increase in wait times and call lengths on their customer service phone lines in recent years, and PERA is no exception. Staff have been taking steps to improve service levels, including upgrading phone systems and better forecasting staffing needs to meet members’ expectations.



<h4 class="wp-block-heading">Asset/liability study</h4>



An important action the Board undertakes every few years is conducting what’s called an asset/liability study. The last study&nbsp;<a href="https://peraontheissues.com/board-directed-asset-liability-study-informs-peras-investment-strategy/" target="_blank" rel="noreferrer noopener">was completed in 2019</a>.



The asset/liability study is what ultimately informs PERA’s strategic&nbsp;asset allocation&nbsp;— or the mix of stocks, bonds, and other investments that make up PERA’s portfolio.



Over the next several months, PERA’s investment consultants will work with staff and the Board to discuss PERA’s long-term investment goals, risk tolerance, expectations of future performance and other factors to determine if PERA should adjust its&nbsp;asset allocation&nbsp;. A notable change that resulted from the last study was allocating slightly more of the portfolio to&nbsp;<a href="https://peraontheissues.com/asset-classes-explained-global-equity/" target="_blank" rel="noreferrer noopener">global equity</a>.



The Board will discuss the asset/liability study further at its November meeting, with the possibility of finalizing the study as soon as next spring.



The Board will hold its final meeting of 2023 on Nov. 17.

Recap of PERA Board’s September Planning Session, Meeting

In this story:



<ul>
<li>CEM Benchmarking report finds PERA’s administrative costs in 2020 were lower than the average of its peer group</li>



<li>PERA’s service score reflects challenges of COVID-19 pandemic</li>



<li>PERA remains committed to improving service to members, retirees</li>
</ul>



<hr class="wp-block-separator has-css-opacity"/>



Despite the challenges of the COVID-19 pandemic, Colorado PERA continued to provide a high level of service to its members at a low cost in 2020, according to the latest report from CEM Benchmarking.



The report, which is released every year, compares PERA to other large public pension systems around the United States and the world on two key measures: administrative costs and the quality of service members receive. PERA consistently ranks among the top of its peer group of similarly sized pension systems.



<h2 class="wp-block-heading">How PERA’s costs compare to other public pension plans</h2>



PERA’s pension administration costs in 2020 totaled $31.4 million, for a cost of $48 per member. That’s lower than the average of $62 per member for PERA’s peer group. In particular, PERA spends less than its peers on front-office staff, information technology and major projects.



PERA’s administration costs have been decreasing since 2018, when the cost per member was $52, while peer organizations have increased slightly.



<h2 class="wp-block-heading">Impact of COVID-19</h2>



CEM Benchmarking measures service quality from the perspective of a PERA member, looking at factors such as how long it takes to reach a customer service representative on the phone, and how many of those calls result in a desired outcome.



Like other public pension systems, PERA saw some effects of the COVID-19 pandemic reflected in its service score in 2020. Economic uncertainty led to an increase in calls from members inquiring about retirement, and that resulted in longer wait times for PERA’s Customer Service Center, as well as longer call duration.



As a result, PERA’s total service score dipped slightly to 82 out of 100, which was equal to its peer group but higher than the average of 76 for all pension systems included in the report.



<h2 class="wp-block-heading">Continuing to build on a tradition of service</h2>



The customer service center is a cornerstone of PERA’s operations, providing important information and assisting members and retirees on a daily basis. As PERA continues to work <a href="https://peraontheissues.com/pera-board-continues-to-press-for-innovation/" target="_blank" rel="noreferrer noopener">toward fulfilling the Board’s vision of innovation in service delivery</a>, PERA’s customer service team strives to build on its tradition of service quality and dependability.



PERA hired a new director of customer service in September. Philip Hill has more than 25 years of experience in customer service call centers, more than half of which has been in retirement services and human resources.



Hill said his focus will be on making sure PERA’s customer service representatives have everything they need to continue meeting members’ needs in the future.



“In customer service, we consistently look at our methods to make sure we are providing the best service possible,” he said. “We need to continue to maximize our knowledge and availability to our callers through all the tools available to us. This is a great team that wants to do their best for each caller and provide world-class customer service.”

PERA Continued to Provide Cost-Effective Service During Challenging Year

Every year, <a href="https://www.cembenchmarking.com/" target="_blank" rel="noreferrer noopener">CEM Benchmarking</a> releases a report detailing the performance of 72 global pension systems and the cost associated with running each.



PERA consistently ranks very highly against peer organizations. “PERA delivers high levels of service at low cost to members,” has become a <a href="https://peraontheissues.com/pera-continues-streak-listed-among-most-efficiently-run-pension-systems/" target="_blank" rel="noreferrer noopener">familiar refrain</a> on this website every October.



Patrick Lane, PERA&#8217;s Chief Benefits Officer, said the report provides the valuable opportunity to evaluate PERA’s services. He added that PERA’s consistent track record is worth taking note of. On any given day, however, Lane is not thinking about PERA’s ranking. He’s thinking about how the future of service delivery is going to look different than it does today.



Establishing a Baseline



The CEM report compiles data at an extreme level of detail. For example, PERA submits dozens of factors about its digital operations, from the ability to “download or print duplicate tax receipts” to the number of videos published online.



These data points, which encompass PERA&#8217;s service delivery across the board, are aggregated into a single “total service score.” PERA scored an 88 out of a possible 100 in this year&#8217;s report. The median score of PERA’s peer group, which consists of 12 other pensions of similar size, was 82. The total cost to administer PERA averaged $50 per member per year, below the peer average of $61.



“The PERA Board of Trustees and staff are committed to providing outstanding service that also demonstrates our commitment to spending assets wisely,” Lane said. “It’s rewarding to be recognized for providing high-quality, cost-effective services, but we must continue to pursue improvement and innovation in the way we serve our members.”



Pursuing Quality



The CEM report delivers valuable insights. For example, the report captures the array of services available to members (e.g. &#8220;how many tasks can a member perform online?”), metrics related to efficiency (e.g. “what was the average call time when calling customer service?”) and volume (e.g. “how many members attended an in-person educational session?”). But it doesn’t capture everything.



<div class="wp-block-image"><figure class="alignright size-medium"><img decoding="async" src="https://content.copera.org/the-future-of-service-at-pera/"Patrick Lane, PERAs Chief Benefits Officer" class="wp-image-3056"/><figcaption>Patrick Lane, Chief Benefits Officer at PERA</figcaption></figure></div>



For instance: Are there any online tools this report does not address that members want? When does a longer-than-average call to customer service indicate a representative’s patience and ability to work through a complicated problem with a member rather than an inefficiency? What do educational opportunities look like five years from now, and how can PERA reach members who aren’t inclined to attend an educational session? These are the types of questions Lane considers.



“Quality is something we must always focus on,” he said, while also pointing out that quality is tough to measure in data-driven analyses like the CEM report. PERA does measure quality through thousands of surveys sent to members throughout the year that gauge member satisfaction on interactions with multiple PERA departments. Put together, these various sources of information provide insight into PERA’s ability to meet member expectations.



The COVID Effect



The global pandemic has ushered in changes to PERA services. “The nature of the business disruption was different than anything we’ve ever seen,” Lane said. “This is the only event in our lifetime that has had a truly universal impact: Everyone is experiencing this, though in different ways.”



Lane said that at the pandemic’s onset, the demand for PERA services initially decreased. “People were thinking about more immediate needs,” he said. By June, however, “it was back to our normal workloads.”



Some PERA services changed dramatically and the pandemic provided unexpected opportunities to improve and expand. “The most obvious is that Field Education presentations and one-on-one member counseling pivoted from in-person to <a href="https://content.copera.org/are-public-sector-workers-satisfied/" target="_blank" rel="noreferrer noopener" class="broken_link">completely virtual</a>,” Lane said. “We did this overnight without a disruption in service and haven’t heard of any negatives from our members.”



Lane said that these additions were part of PERA’s long-term plans before the pandemic began. But the sudden halt of in-person meetings led to the rapid development and roll-out of these digital channels.



Looking Ahead



Web-based meetings are just one area of change. Other areas of focus in the coming months include reducing paper-intensive processes, making more information readily available on member accounts, and simplifying and automating online calculators.



Lane mentioned that the introduction of the PERA new member journey is a recent example of the work PERA is doing to engage members in a new, more intentional way. The new member journey is a series of communications during a new member’s first year that should increase the awareness of how a PERA benefit works over that employee’s career.



Enhancing service also means strengthening relationships with PERA’s contacts at the more than <a href="https://www.copera.org/pera-on-the-issues/the-future-of-service-at-pera" target="_blank" rel="noreferrer noopener">500 PERA employers</a> throughout Colorado. These people work to deliver essential information to PERA and often serve as de facto PERA experts for their coworkers. “PERA is just one in a number of responsibilities our contacts have,” Lane said, recognizing the demands placed on employer representatives, even before the pandemic. “We are really trying to invest in that two-way communication to be more effective partners in what ultimately becomes a service to our members.”



Moving PERA into the future requires taking in a lot of information—findings from the CEM report, changing conditions due to COVID, goals laid out in the Board’s strategic plan—and moving forward.



High marks from the CEM report show that PERA is operating efficiently. But there is no measure that can capture whether an organization is ready for the future. Lane knows that this is the ultimate aim of the organization. And, at a time in which most PERA staff members are working from home, the need to innovate is more apparent than ever. 



To that end, Lane said that a phrase often used by PERA Executive Director Ron Baker resonates: “We won’t be returning to the same organization we left in March.”

Tag Archives:

PERA Board Discusses Strategic Plan, Investment Strategy and More at 2024 Planning Session

Recap of PERA Board’s September Planning Session, Meeting

PERA Continued to Provide Cost-Effective Service During Challenging Year

The Future of Service at PERA

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