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.

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>



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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.



<h4 class="wp-block-heading">How PERA’s costs compare to other public pension plans</h4>



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.



<h4 class="wp-block-heading">Impact of COVID-19</h4>



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.



<h4 class="wp-block-heading">Continuing to build on a tradition of service</h4>



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">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.”

The Future of Service at PERA

In 2018, Colorado PERA lowered administrative costs while also
improving service, according to an annual report issued by CEM Benchmarking, a
global pension fund benchmarking and consulting agency. 



The cost to run PERA equaled $52 per active, inactive, and
retired member, which is 13 percent less than PERA’s peer average of $60 per
member, and about half of the $103 average cost for all organizations in the
study. PERA’s administration costs actually fell 0.4 percent per year between
2015 and 2018, while peer average costs remained unchanged. Even as PERA
reduced administrative costs needed to operate the system, it was also able to
improve its customer service scores. 



Balancing customer service
and administrative costs



Every year, CEM Benchmarking conducts an in-depth analysis
of global public pension systems. Colorado PERA has improved or maintained its
overall service score—this year 91 out of 100—for the sixth consecutive year
and continues to stand out as a leader in the field.



To assess the 62 pensions in the study, CEM Benchmarking
looks at two primary factors: Each organization’s administrative costs and the quality
of service its members receive. The top-level findings reaffirmed PERA’s place
as a top performer in each category when measured against both the 12 organizations
in its peer group and also when measured against all organizations in the study.



“The PERA Board of Trustees and staff are committed to
providing high-quality service to our members at a low cost,” said Ron Baker,
Executive Director of Colorado PERA. “As we look forward, PERA is committed to
seeking innovative ways to provide better service to the membership while
remaining responsible stewards of their retirement dollars.”



&nbsp;Delivering top-notch service



CEM Benchmarking defines service from the perspective of
members receiving the service, not from the perspective of PERA employees. The
report states, “high service means more channels, faster turnaround times, more
availability, more choice, better content and higher quality.” To evaluate
service, CEM Benchmarking examines hundreds of data points collected from all
service divisions in the organization and provides comparative data with
pension funds of similar size and assets under management (confirm how peer
group is set). 



Key to PERA’s industry-leading ranking were factors such as average
wait time for the call center and percentage of calls that conclude in desired
outcomes. The report also compares the average time needed to process key
service requests and the availability of counseling and education sessions,
among other factors. 



Amid a rapidly changing world, the demand to consistently
deliver quality service at a low cost is often easier said than done. When a
third-party study shows that PERA has established such a pattern, it
demonstrates not only sound stewardship of member dollars, but also a
commitment to serving each of PERA’s more than 600,000 members.

PERA Continues Streak, Listed Among Most Efficiently Run Pension Systems

Service score remains high, costs low – even when compared to high-achieving retirement systems



At PERA, the goal is excellent customer service measured by the standard of every interaction with the membership as both efficient and effective. Further, PERA strives to achieve these standards in a way that is also cost-effective. In order to measure performance against these important goals, PERA contracts with an independent, international firm that evaluates customer-service delivery and the cost to achieve that level of service.



Every year, the public-pension service-evaluation firm <a href="http://www.cembenchmarking.com/" target="_blank" rel="noreferrer noopener">CEM Benchmarking</a> performs a review of PERA’s delivery of service and costs, which is then compared to a group of peers, 13 different public retirement systems across the country. PERA’s peers include the <a href="https://www.opers.org/" target="_blank" rel="noreferrer noopener">Ohio Public Employees Retirement System</a>, the <a href="https://www.copera.org/pera-earns-an-a-on-2017-customer-service-report-card" target="_blank" rel="noreferrer noopener" class="broken_link">Arizona State Retirement System</a>, and the <a href="https://www.drs.wa.gov/" target="_blank" rel="noreferrer noopener">Washington State Department of Retirement Systems</a>, among others.



This last year, PERA’s total service score was 90, which was above the peer median of 83, and one of the highest of all 70 plans that choose to be evaluated by CEM (not just PERA’s peers who are also high performers). In the last three years, PERA’s score has increased three points due to enhanced website capabilities, more member counseling, and reduced turn-around times for purchasing service credit.



<figure class="wp-block-image"><a href=""><img decoding="async" src="https://content.copera.org/pera-earns-an-a-on-2017-customer-service-report-card/"" class="wp-image-2094"/></a></figure>



Not only did PERA receive high marks from CEM for our level of service, but also achieved this outcome with a lower cost per member than many peers. PERA’s cost to administer the retirement benefits of the plan was $52 per member in 2017. That’s $9, or 14 percent, lower than the median per-member/retiree cost of $61.



<figure class="wp-block-image"><a href=""><img decoding="async" src="https://content.copera.org/pera-earns-an-a-on-2017-customer-service-report-card/"" class="wp-image-2095"/></a></figure>



PERA’s ability to maintain these lower costs is due to operational efficiencies – namely, achieving the same results with fewer employees – and an economy of scale advantage.



Even when compared to other plans that are high performers (PERA was third highest among our peers), PERA earned an A rating from CEM.



<figure class="wp-block-image"><a href=""><img decoding="async" src="https://content.copera.org/pera-earns-an-a-on-2017-customer-service-report-card/"" class="wp-image-2096"/></a></figure>

PERA earns an ‘A’ on 2017 customer-service report card

<blockquote class="wp-block-quote">
“Celebrate that you are member service superstars – a low-cost, high-service system. Colorado PERA ranks 5th in the world when it comes to member satisfaction and service delivery.” – Tom Scheibelhut of CEM Benchmarking
</blockquote>



Just like the investment side of PERA is <a href="https://content.copera.org/how-does-pera-measure-up/" target="_blank" rel="noreferrer noopener">benchmarked</a> and evaluated, so is the administrative side of the plan. <a href="http://www.cembenchmarking.com/" target="_blank" rel="noreferrer noopener">CEM Benchmarking</a>, an international firm that analyzes pension fund service delivery, compared PERA to its peer group of 13 U.S. pension plans and to a larger universe of 71 plans around the world.



The range of U.S. pension plans varies from CalSTRS and CalPERS in California to the systems in Iowa, Kansas, and Utah. Global pension plans studied include ABP and PFZW in The Netherlands to the Ontario Pension Board and the British Columbia Pension Corporation in Canada, and numerous other plans in several countries.



For 2016, PERA’s administrative costs were well below the average of both the 13 funds in its peer group and the 71 pension funds evaluated across the globe. PERA’s annual pension administration costs were $51 per active member per year (or annually), inactive member, and retiree, or $10 below the peer average of $61 per year.



The reasons for PERA’s lower than average costs included higher employee productivity and lower costs for information technology and economies of scale. PERA had 3.4 full-time employees (FTE) per 10,000 members, below the peer average of 4.4.



PERA’s overall service score, measuring the customer service PERA provides its members and retirees, was 90 out of 100. Only four funds out of the 71 measured had higher service scores than PERA.



“CEM’s independent, third-party analysis of PERA’s operations confirms what members and retirees tell me about PERA’s customer service delivery. Being part of this global benchmarking effort allows PERA to learn from others in our industry and to implement good ideas that benefit our membership. And it affirms PERA’s commitment to the wise use of our members’ retirement assets,” said Greg Smith, PERA’s executive director.



The results of the CEM Benchmarking study further demonstrate the strong commitment of PERA to deliver exceptional service for PERA members and retirees. PERA provides this level of service at a low cost, protecting the retirement savings of its members and continuing to be one of Colorado’s best investments for members, retirees, and taxpayers across the state.

How Does PERA Measure Up?

A new analysis of reporting standards for public retirement systems was recently released by the <a href="http://slge.org/" target="_blank" rel="noreferrer noopener">Center for State and Local Government Excellence</a> (SLGE) confirming that Colorado PERA is getting it right when it comes to communicating the financial status of the plan. The report, “<a href="http://slge.org/wp-content/uploads/2017/04/Public-Pension-Reporting-and-Disclosure-2017-Report.pdf" target="_blank" rel="noreferrer noopener">Public Pension Reporting and Disclosure: The Current State of Practice and Examples of What Works Well</a>,” developed by SLGE with input and assistance from the <a href="http://www.nasra.org/" target="_blank" rel="noreferrer noopener">National Association of State Retirement Administrators</a>, finds 72 of the 83 systems in the sample follow the <a href="http://gfoa.org/" target="_blank" rel="noreferrer noopener">Government Finance Officers Association</a> (GFOA) reporting standards in producing their comprehensive annual financial reports (CAFR), with nearly half of the sample also developing a plain language or popular annual financial report.



Best practices include conducting an actuarial valuation once a year and an experience study every five years. PERA’s actuarial valuation is performed by an external consulting firm that reports to the PERA Board of Trustees. The actuarial valuation is posted on the <a href="https://content.copera.org/2016-legislative-session-wrap-up/" target="_blank" rel="noreferrer noopener">PERA website</a> along with the <a href="https://www.copera.org/investment-returns-beat-benchmark-in-difficult-year" target="_blank" rel="noreferrer noopener" class="broken_link">Comprehensive Annual Financial Report</a> (CAFR) and the <a href="https://content.copera.org/pension-communication-best-practices/" target="_blank" rel="noreferrer noopener">Summary Annual Financial Report</a> (plain language or popular report), which is also mailed to all PERA members in July.



SLGE included the disclosure of investment fees in the CAFR and online as well as using benchmarks to compare investment performance among the ways to promote transparency. (Investment expenses paid by PERA are on page 29 of the <a href="https://www.copera.org/investment-returns-beat-benchmark-in-difficult-year" target="_blank" rel="noreferrer noopener" class="broken_link">2015 CAFR</a> and asset class benchmarks are provided on page 123.)



According to the SLGE report, “Certain themes surface with regard to systems that have developed robust communication and financial reporting initiatives: the importance of active, two-way communication between the system and all stakeholders; the identification of communication and reporting as a priority by system leadership; the engagement of all stakeholders, even critics, before, during, and after the implementation of policy, benefit, and programmatic changes; and the openness to using social media technologies and/or establishing formal structures (e.g., advisory committees) to garner detailed feedback from a range of stakeholders.”



The <a href="https://www.copera.org/recap-of-pera-boards-june-2021-meeting" target="_blank" rel="noreferrer noopener" class="broken_link">PERA Board of Trustees</a> has as a priority the engagement of stakeholders and has a <a href="https://www.copera.org/policies-and-practice-shape-oversight-and-involvement-of-trustees-in-pera-investments" target="_blank" rel="noreferrer noopener" class="broken_link">standing committee</a> devoted to ensure a strong communications outreach effort is in place. SLGE noted that successful systems facilitate open communication “before, during, and after” the implementation of changes – a practice PERA is taking to the next level with the <a href="https://content.copera.org/pera-signal-light-divisions-orange-mean/" target="_blank" rel="noreferrer noopener">PERA Community Outreach Tour</a> website, the <a href="https://peraontheissues.com/">PERA on the Issues</a> and <a href="https://www.copera.org/pension-communication-best-practices" target="_blank" rel="noreferrer noopener" class="broken_link">The Dime</a> blogs, and <a href="https://www.copera.org/telephone-town-hall-frequently-asked-questions-3-2" target="_blank" rel="noreferrer noopener" class="broken_link">telephone town hall</a> meetings.

Tag Archives:

PERA Continued to Provide Cost-Effective Service During Challenging Year

The Future of Service at PERA

PERA Continues Streak, Listed Among Most Efficiently Run Pension Systems

PERA earns an ‘A’ on 2017 customer-service report card

How Does PERA Measure Up?

Pension Plan Financial Communication Best Practices and Colorado PERA

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