
<p>Retirement insights from a Colorado PERA perspective</p>



<p></p>


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


<p>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.</p>



<p>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.</p>



<p>We’ve included clips of some of the executives’ answers below, and full recordings of each Town Hall are available at <a href="https://copera.org/about/pera-town-hall" target="_blank" rel="noreferrer noopener">copera.org/townhall</a>.</p>



<h5 class="wp-block-heading"><strong>How did PERA’s investments perform last year and what is PERA’s financial status?</strong></h5>



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



<p>“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%.”</p>



<p>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.</p>



<p>Explore PERA’s financial results in an interactive format at <a href="https://copera.org/snapshot" target="_blank" rel="noreferrer noopener">copera.org/snapshot</a>.</p>



<h5 class="wp-block-heading"><strong>As PERA’s new CEO, do you anticipate making any major changes, such as implementing a larger annual benefit increase for retirees?</strong></h5>



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<p>Roth reiterated that staff and the Board understand the challenge inflation has posed in recent years as the <a href="https://www.copera.org/retirees/benefit-basics-for-retirees/annual-benefit-increases" target="_blank" rel="noreferrer noopener">Annual Increase</a>—which is set in statute and can only adjust up or down based on PERA’s funding progress, has not kept pace.</p>



<p>“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.”</p>



<h5 class="wp-block-heading"><strong>Has PERA been planning for the possibility of a recession, and what could that mean for the portfolio?</strong></h5>



<div class="wp-block-advgb-video advgb-video-block full-width" data-video="https://content.copera.org/wp-content/uploads/2024/07/24-amy-recession.mp4" data-source="local" data-video-attr="controls,playsinline" data-video-preload="metadata"><div class="advgb-video-wrapper full-width no-lightbox"><video class="full-width" height="450" poster="https://content.copera.org/wp-content/uploads/2024/07/amy-recession.png" controls preload="metadata" playsinline><source src="https://content.copera.org/wp-content/uploads/2024/07/24-amy-recession.mp4"/>Your browser does not support HTML5 video.</video></div></div>



<p>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 <a href="https://www.copera.org/pera-on-the-issues/asset-liability-study-a-guide-to-building-a-strategic-portfolio" target="_blank" rel="noreferrer noopener">asset/liability study</a>, and that process includes modeling many different scenarios.</p>



<p>“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.”</p>



<h5 class="wp-block-heading"><strong>PERACare premiums have largely held steady over the past few years; will they remain the same next year?</strong></h5>



<div class="wp-block-advgb-video advgb-video-block full-width" data-video="https://content.copera.org/wp-content/uploads/2024/07/24-patrick-peracare.mp4" data-source="local" data-video-attr="controls,playsinline" data-video-preload="metadata"><div class="advgb-video-wrapper full-width no-lightbox"><video class="full-width" height="450" poster="https://content.copera.org/wp-content/uploads/2024/07/patrick-peracare.png" controls preload="metadata" playsinline><source src="https://content.copera.org/wp-content/uploads/2024/07/24-patrick-peracare.mp4"/>Your browser does not support HTML5 video.</video></div></div>



<p>“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.”</p>



<p>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.</p>



<h5 class="wp-block-heading"><strong>What is PERA doing about Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)?</strong></h5>



<div class="wp-block-advgb-video advgb-video-block full-width" data-video="https://content.copera.org/wp-content/uploads/2024/07/24-patrick-wep-gpo.mp4" data-source="local" data-video-attr="controls,playsinline" data-video-preload="metadata"><div class="advgb-video-wrapper full-width no-lightbox"><video class="full-width" height="450" poster="https://content.copera.org/wp-content/uploads/2024/07/patrick-wep-gpo.png" controls preload="metadata" playsinline><source src="https://content.copera.org/wp-content/uploads/2024/07/24-patrick-wep-gpo.mp4"/>Your browser does not support HTML5 video.</video></div></div>



<p>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.</p>



<p>“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.”</p>



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



<h5 class="wp-block-heading"><strong>Where do you see PERA headed in the future and how can I be sure I will receive my full benefit when I retire?</strong></h5>



<div class="wp-block-advgb-video advgb-video-block full-width" data-video="https://content.copera.org/wp-content/uploads/2024/07/24-andrew-pera-future.mp4" data-source="local" data-video-attr="controls,playsinline" data-video-preload="metadata"><div class="advgb-video-wrapper full-width no-lightbox"><video class="full-width" height="450" poster="https://content.copera.org/wp-content/uploads/2024/07/andrew-pera-future.png" controls preload="metadata" playsinline><source src="https://content.copera.org/wp-content/uploads/2024/07/24-andrew-pera-future.mp4"/>Your browser does not support HTML5 video.</video></div></div>



<p>“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.”</p>



<p>For full recordings of both Town Halls, visit <a href="https://copera.org/about/pera-town-hall" target="_blank" rel="noreferrer noopener">copera.org/townhall</a>.</p>


CEO Andrew Roth, Executives Answer Questions in PERA Town Halls


<p>Save the date—this year’s Town Halls with PERA executives are set for June 26.</p>



<p>PERA holds Town Halls each year after the release of the&nbsp;<em>Annual Comprehensive Financial Report</em>&nbsp;(ACFR), which contains details on the Plan’s finances and membership for the previous calendar year. The PERA Board of Trustees will release the 2023&nbsp;<em>ACFR</em>&nbsp;at its June 21 meeting.</p>



<p>This year, participants will have the opportunity to meet PERA’s&nbsp;<a href="https://content.copera.org/qa-with-peras-new-ceo-executive-director-andrew-roth/" target="_blank" rel="noreferrer noopener">new CEO/Executive Director, Andrew Roth</a>. He and the executive team will be taking questions live during two Town Halls.</p>



<p>This year’s Town Halls will once again be virtual, with the option to participate online, via social media, and on the phone.</p>



<h4 class="wp-block-heading"><strong>Event details</strong></h4>



<p><strong>Date and time:</strong>&nbsp;Wednesday, June 26</p>



<ul>
<li><strong>10:00 a.m. MT&nbsp;</strong>(retirees)<br><a href="https://www.addevent.com/event/eK21465061" target="_blank" rel="noreferrer noopener">Add to Calendar</a></li>



<li><strong>6:00 p.m. MT&nbsp;</strong>(active members)<br><a href="https://www.addevent.com/event/Au21465068" target="_blank" rel="noreferrer noopener">Add to Calendar</a></li>
</ul>



<h4 class="wp-block-heading"><strong>How to participate</strong></h4>



<p>There are multiple ways to take part in these virtual events:</p>



<ul>
<li><strong>Web:</strong>&nbsp;Visit&nbsp;<a href="https://content.copera.org/about/pera-town-hall/" target="_blank" rel="noreferrer noopener">copera.org/townhall</a>&nbsp;to connect.</li>



<li><strong>Phone:</strong>&nbsp;<a href="https://content.copera.org/2024-pera-town-halls-taking-place-on-june-26/" target="_blank" rel="noreferrer noopener">Sign up for a phone call here</a>.</li>



<li><strong>Social Media:</strong>&nbsp;Connect on&nbsp;<a href="https://www.facebook.com/ColoradoPERA/" target="_blank" rel="noreferrer noopener" class="broken_link">Facebook</a>&nbsp;or&nbsp;<a href="https://www.youtube.com/ColoradoPERA" target="_blank" rel="noreferrer noopener">YouTube</a>.</li>
</ul>



<p>Both Town Halls are open to anyone who would like to participate, but the content of each will be tailored to its respective audience.</p>



<p>If you’re unable to attend either event, recordings will be available afterward.</p>



<p>For more information, visit&nbsp;<a href="https://content.copera.org/about/pera-town-hall/" target="_blank" rel="noreferrer noopener">copera.org/townhall</a>.</p>


2024 PERA Town Halls Taking Place on June 26


<p>Andrew Roth began his tenure as Colorado PERA’s eighth CEO/Executive Director on Monday, May 13.</p>



<p><em>PERA On The Issues</em>&nbsp;sat down with Mr. Roth to learn more about him, his experience, and his perspective on the issues facing PERA and its members.</p>



<p>Answers have been lightly edited for length and clarity.</p>



<h5 class="wp-block-heading"><strong>Tell us a little bit about your career and how you ended up working in public pensions.</strong></h5>



<p>I started my professional career with the California State Auditor as a performance auditor. The State Auditor taught me how to critically assess government programs and identify and review key documents. After working as a Public Information Officer for the California Department of Social Services, I joined the state securities regulator as their Director of Education and Outreach. There I championed anti-fraud and financial literacy education for seniors, military servicemembers, and youth. That work led to my entry at the California State Teachers’ Retirement System (CalSTRS) as the Director of Retirement Readiness. Most recently, I was Deputy Director of the Teacher Retirement System of Texas (TRS).</p>



<h5 class="wp-block-heading"><strong>You have worked at some of the biggest public pension plans in the country. How do you think that will inform your leadership at PERA?</strong></h5>



<p>The experience I’ve gained at CalSTRS and TRS taught me that every pension system is both similar and yet unique. Pension systems share the need to serve members, engage with employers and stakeholders such as the Legislature, and attract and retain the talent necessary to administer a large financial institution with billions of dollars in assets. Each system also operates in a unique environment with its own plan design, statutory and regulatory frameworks, and the organizational culture cultivated by leadership. As I onboard with PERA, I will listen to the terrific talent already in place to determine what works and where opportunity lies to help advance the mission and serve our members.</p>



<h5 class="wp-block-heading"><strong>PERA is often a topic of discussion at the State Legislature and beyond. What’s your approach to engaging with stakeholders?</strong></h5>



<p>I see the role of the CEO/Executive Director as one that is primarily external facing. While I will spend time working closely with the executive team and leadership on the high-level decisions my position is responsible for addressing, I will also prioritize serving as the face of Colorado PERA with its stakeholders. This includes member organizations, legislators, state and national pension associations, institutional investor organizations, and other key participants in the pension space. As the CEO/Executive Director, I will approach interactions with an open mind and a listening ear.</p>



<h5 class="wp-block-heading"><strong>There’s been some renewed interest in&nbsp;defined benefit&nbsp;plans in both the public and private sectors. What’s your take on the future of pensions?</strong></h5>



<p>I’ve been a proponent of&nbsp;defined benefit&nbsp;plans for 20 years. They are—and in my opinion will remain—an effective solution for helping to ensure retirement security for all Americans. Given the vagaries of the stock market, and the challenge many people experience in making the right financial decisions necessary to fund a retirement, I believe&nbsp;defined benefit&nbsp;plans constitute a bedrock element in the nation’s retirement landscape.</p>



<h5 class="wp-block-heading"><strong>As we develop our next strategic plan, what trends or issues do you think the PERA Board will want to address?</strong></h5>



<p>In my experience, the trustees of pension systems tend to focus their attention on issues that involve actuarial soundness, excellent customer service, operational effectiveness, and employer and stakeholder relations. Simply put, that equates to members, employers, financial issues, and operational concerns. I look forward to a collaborative process with the Board, executive staff, stakeholders, and the organization in building a roadmap to continued success for Colorado PERA.</p>



<h5 class="wp-block-heading"><strong>Finally, if you could deliver one message to our active members and retirees, what would it be?</strong></h5>



<p>It is an honor and a privilege to serve as the CEO/Executive Director for Colorado PERA. I will work hard every day to ensure the retirement security of PERA’s hardworking members and the sustainability of the fund.</p>


Q&A With PERA’s New CEO/Executive Director Andrew Roth


<p>After an extensive nationwide search, the Colorado PERA Board of Trustees announced it has selected PERA’s next Executive Director.</p>



<p>The Board named Andrew Roth, Deputy Director of the Teacher Retirement System of Texas, as PERA’s eighth Chief Executive Officer/Executive Director. The Board announced Roth’s appointment at&nbsp;<a href="https://peraontheissues.com/recap-of-pera-boards-march-2024-board-meeting/" target="_blank" rel="noreferrer noopener">its March 15 meeting.</a></p>



<p>“The Board conducted an extremely thorough process with highly qualified candidates from across the country,” said Board Chair Marcus Pennell. “Mr. Roth stood out among these leaders because of his experience managing complex pension organizations, a commitment to PERA’s&nbsp;fiduciary&nbsp;obligations and as someone who has demonstrated a dedication to public service.”</p>



<p>Prior to his role at the Teacher Retirement System of Texas, Roth served in high-level positions at the California State Teachers’ Retirement System and in various departments within the State of California.</p>



<p>“PERA is one of the nation’s premier pension funds and it is an honor to serve the members and retirees who have dedicated their careers to public service in the great state of Colorado,” Roth said. “PERA has contributed to a secure retirement for Colorado’s public workforce for nearly 100 years, and I appreciate the Board’s confidence in me to carry this vital mission into the future. I look forward to working closely with the Board, our employees, and every member to ensure PERA remains steadfastly focused on meeting the retirement needs of hundreds of thousands of Coloradans.”</p>



<p>Roth will begin his new role as Chief Executive Officer/Executive Director on May 13.</p>


PERA Board Names Andrew Roth as New Executive Director


<p>The Colorado PERA Board of Trustees met on Friday, January 19 for its first regular meeting of 2024.</p>



<p>The agenda included important topics of discussion and various action items. Some of the Board’s major actions at the meeting are summarized below.</p>



<h4 class="wp-block-heading"><strong>Board appointment and Vice Chair election</strong></h4>



<p>Current Board Vice Chair Suzanne Kubec is retiring, and therefore vacating her seat on the PERA Board. In accordance with Board policy, Chair Marcus Pennell moved to fill that seat with the candidate from the State Division’s previous Board election who received the second-highest number of votes. As a result, Ashley M. Smith, who served on the Board from 2021 to 2022, was appointed to fill that seat until the next election in 2025.</p>



<p>Additionally, the Board held an election to replace Kubec as Vice Chair, and the Trustees elected Taylor McLemore to fill that role. McLemore has been on the Board since 2021 and currently serves as chair of the Ad Hoc Committee overseeing the search for PERA’s next Executive Director.</p>



<blockquote class="wp-block-quote">
<p><strong>REMINDER:</strong> <a href="https://peraontheissues.com/four-seats-on-pera-board-up-for-election-in-2024/" target="_blank" rel="noreferrer noopener">Four Seats on PERA Board Up For Election in 2024</a></p>
</blockquote>



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



<p>McLemore provided an update on the Ad Hoc Committee’s Executive Director search, stating that more than 200 people have applied for the job. The committee is working with an outside search firm to screen applicants and identify candidates of high interest who will receive in-person interviews in February. The committee will then provide a list of top candidates to the full Board, which will be responsible for selecting a finalist.</p>



<h4 class="wp-block-heading"><strong>Legislative update</strong></h4>



<p>The 2024 legislative session is underway, and lawmakers have so far introduced <a href="https://peraontheissues.com/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">three PERA-related bills</a>. Interim Executive Director/Chief Investment Officer Amy C. McGarrity and Public and Government Affairs Manager Michael Steppat updated the Trustees on the bills:</p>



<ul>
<li><strong>HB24-1044:</strong> Would expand the number of PERA retirees who can work for school districts without reductions in their benefits.</li>



<li><strong>SB24-013:</strong> Would increase district attorney and assistant district attorney pay&nbsp;and allow county boards to require assistant DAs to become a member of the PERA Defined Benefit Plan.</li>



<li><strong>SB24-044:</strong> Would create a temporary tax credit for qualifying PERA retirees in tax years 2024 and 2025.</li>
</ul>



<p>The Board generally takes a position on a bill if it has a financial impact on PERA, and Trustees voted to take an “amend” position on HB24-1044. That means the Board is looking for lawmakers to amend the bill to include a way to offset potential negative impacts on PERA’s funding.</p>



<blockquote class="wp-block-quote">
<p><strong>READ MORE:</strong> <a href="https://peraontheissues.com/2024-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">2024 Proposed Legislation Status</a></p>
</blockquote>



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



<p>In September, the Board began the process of examining PERA’s strategic asset allocation through what’s known as an <a href="https://peraontheissues.com/asset-liability-study-a-guide-to-building-a-strategic-portfolio/" target="_blank" rel="noreferrer noopener">asset/liability study</a>. The Board’s consultants, Aon, discussed the work that’s been completed so far, including meeting with PERA’s investment staff and modeling future funding scenarios based on the existing asset makeup.</p>



<p>That work will continue over the next several months, with more analysis and modeling to determine if different asset allocations or levels of diversification would better help PERA meet its goals.</p>



<h4 class="wp-block-heading"><strong>Future meetings</strong></h4>



<p>The Board has four more regular meetings scheduled for 2024:</p>



<ul>
<li>March 15</li>



<li>June 21</li>



<li>September 20</li>



<li>November 15</li>
</ul>



<p>In addition, the Ad Hoc Committee will be meeting to interview Executive Director candidates in February. All meetings are streamed live and include time for public comment.</p>



<p>For more information, visit <a href="https://www.copera.org/board-of-trustees" target="_blank" rel="noreferrer noopener" class="broken_link">copera.org/board-of-trustees</a>.</p>



<p></p>


Recap of PERA Board’s January 2024 Meeting


<p>The&nbsp;<a href="https://www.copera.org/board-of-trustees" target="_blank" rel="noreferrer noopener" class="broken_link">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.</p>



<p>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.</p>



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



<p>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.</p>



<p><strong>READ MORE:</strong>&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></p>



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



<p>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.</p>



<p>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 10<sup>th</sup>&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.</p>



<p>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.</p>



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



<p>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>.</p>



<p>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.</p>



<p>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>.</p>



<p>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.</p>



<p>The Board will hold its final meeting of 2023 on Nov. 17.</p>


Recap of PERA Board’s September Planning Session, Meeting


<p>The PERA Board is making progress in its search for PERA’s next Executive Director. It formed an ad hoc executive search committee to oversee the process. The committee selected Hudepohl &amp; Associates, a Florida-based firm with expertise in executive searches for public pension plans like PERA, to conduct a nationwide search.</p>



<p>The former Executive Director’s position has been vacant since June 1. Chief Investment Officer/Chief Operating Officer Amy C. McGarrity is serving as Interim Executive Director.</p>



<p>On Tuesday, the committee met to discuss its search timeline and objectives. The committee expects to meet again in early-to-mid October, and the entire process is expected to take several months to complete.</p>



<p>Taylor McLemore, chair of the ad hoc committee, said the committee will consider a wide variety of candidates, both internal and external, to find PERA’s next leader.</p>



<p>&#8220;Our mandate is to find the best person for the job,&#8221; McLemore said. &#8220;This is a significant organization that&#8217;s critical to our members, to our employees, and to this state, so we need to find the person who is going to take PERA forward on its mission and make it successful for all of our members and the employees they&#8217;re leading.&#8221;</p>



<p>Meetings of the ad hoc committee are open to the public and are streamed live on <a href="https://www.copera.org/board-of-trustees" class="broken_link">copera.org</a>. PERA members and others are invited to listen in to those meetings, and each includes time for public comment.</p>



<p>For more information, visit <a href="https://www.copera.org/board-of-trustees" class="broken_link">copera.org</a>.</p>


PERA Board Selects Firm to Conduct Executive Director Search


<p>PERA leaders hosted two live Town Halls on Wednesday, July 12 to provide an update on PERA and answer questions from members and retirees.</p>



<p>Interim Executive Director and Chief Investment Officer Amy C. McGarrity was joined by Chief Benefits Officer Patrick Lane and Chief Administrative Officer Jeremy Hill for both meetings.</p>



<p>They answered questions on a number of important topics, including annual benefit increases, Social Security, and PERA’s investment portfolio. Responses to some of those questions are summarized below, and full recordings of each Town Hall are available at <a href="https://copera.org/townhall" target="_blank" rel="noreferrer noopener" class="broken_link">copera.org/townhall</a>.</p>



<h4 class="wp-block-heading"><strong>Why was the previous executive director’s employment contract terminated?</strong></h4>



<figure class="wp-block-video"><video controls src="https://peraontheissues.com/wp-content/uploads/2023/07/2023-th-executive-director.mp4"></video></figure>



<p>“The decision was at the discretion of the PERA Board,” McGarrity said. “To reiterate, there was no criminal wrongdoing and no impact to retiree benefits. We are in the process of selecting an executive director. The first step is to select an executive search firm to assist with the recruitment of that next leader for PERA, and the Board has formed an ad hoc committee. Those ad hoc committee meetings are posted on <a href="https://copera.org/about/board-and-leadership" target="_blank" rel="noreferrer noopener">copera.org</a> and they’re streamed live for anyone who wishes to follow the process.”</p>



<h4 class="wp-block-heading"><strong>Why aren’t annual benefit increases for retirees keeping up with inflation?</strong></h4>



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<p>“We recognize the challenges that this inflationary environment presents. We feel it as consumers but we know it is particularly important to our retired members,” Lane said. “As you know, the Annual Increase percentage is set in statute and it is not within the purview of the PERA Board or staff to make changes to the Annual Increase…the only way that could change is if the state legislature decided to change the law, which would in effect extend PERA’s 30-year window to full funding.”</p>



<h4 class="wp-block-heading"><strong>Are PERA benefits in danger due to 2022’s negative investment returns?</strong></h4>



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<p>No, PERA benefits are not in danger. The investment portfolio is well-diversified and contains a wide array of assets so the portfolio can withstand different market environments, McGarrity said. While we were subject to the market downturn in 2022, we are also subject to positive market swings and have been able to take advantage of those markets in prior years and so far in 2023, McGarrity said.</p>



<p>In 2022, PERA paid $5.2 billion in retirement benefits to retirees and benefit recipients, so you can continue to count on PERA to provide retirement income throughout your life.</p>



<h4 class="wp-block-heading"><strong>What is PERA doing about Social Security’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)?</strong></h4>



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<p>“Social Security’s WEP and GPO are provisions within federal law and are therefore outside the scope of the PERA Board and staff to influence,” Lane said. “We encourage you to contact your members of the U.S. House and Senate to be heard on this issue.”</p>



<p>Bills to modify or repeal WEP and GPO are frequently introduced in Congress, and <em>PERA On The Issues </em>monitors and reports on those activities throughout the year. <a href="https://peraontheissues.com/an-update-on-2023-wep-gpo-legislation/" target="_blank" rel="noreferrer noopener">Click here</a> for our latest article on WEP/GPO reform efforts.</p>



<h4 class="wp-block-heading"><strong>What is PERA doing to improve wait times to talk to Customer Service on the phone?</strong></h4>



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<p>“We have made a number of recent changes that have cut down on wait times in the call center,” Lane said. “We implemented a new caller verification process that makes the security process faster and shortens the length of calls. And we just migrated to a new phone system just within the last few weeks that allows us to better forecast call volumes throughout the day, throughout the month and throughout the year.”</p>



<p>He added: “We have seen service levels increase in recent months and we look forward to providing better service going forward.”</p>



<h4 class="wp-block-heading"><strong>Does PERA inform its investments by accounting for social goals, such as diversity, equity and inclusion? If so, what does that look like?</strong></h4>



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<p>McGarrity explained that PERA’s primary goal is achieving the best risk-adjusted returns for PERA members and therefore PERA does not have any mandates related to environmental, social, or governance (ESG) or diversity, equity, and inclusion (DEI) outcomes. However, PERA staff will consider any financially relevant factors when making investment decisions.</p>



<p>“To the extent that a company’s long-term expected return may be influenced somehow by one of those factors in a financially material way, certainly we will consider it in our underlying due diligence of that investment and/or underwriting of that investment,” McGarrity said. “However, unless they are financially material factors or drivers of the expectations for long-term returns, they are not rising to the top of our considerations. So we are really focused on the factors that have an influence on long-term shareholder returns.”</p>



<h4 class="wp-block-heading"><strong>How can members be sure PERA will be there for them when they retire?</strong></h4>



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<p>“I think the legislature has shown its commitment through the years to keeping PERA strong and enacting reforms several times in the past decade to ensure we are on a financially sustainable path. Most recently, Senate Bill 200 (enacted in 2018) puts us on a path to full funding by 2048,” McGarrity said. “The reforms are working and we’re committed to providing reliable income in retirement that our members cannot outlive.”</p>



<h4 class="wp-block-heading"><strong>PERA mobile app</strong></h4>



<p>Hill also mentioned <a href="https://content.copera.org/pera-leaders-answer-member-questions-at-2023-town-halls/" target="_blank" rel="noreferrer noopener">PERA’s new mobile app</a>, which is now available in the App Store for iOS devices and Google Play Store for Android devices. The app is part of PERA’s long-term goal of modernizing and improving the way it serves its membership, and it makes it easy for members and retirees to access and manage their accounts wherever they are.</p>



<p>These annual town halls are an important opportunity to speak directly with Colorado’s current and former public employees and we’re grateful to all who participated.</p>



<p>To watch full recordings of each Town Hall, visit <a href="https://copera.org/townhall" target="_blank" rel="noreferrer noopener" class="broken_link">copera.org/townhall</a>.</p>


PERA Leaders Answer Member Questions at 2023 Town Halls


<p>As Ron Baker begins his new role as Colorado PERA’s seventh Executive Director, the 24-year veteran of the organization sat down with the <em>Denver Business Journal</em> to chat about what’s next for Colorado’s largest public pension fund. With the passage of Senate Bill 200 during the 2018 Colorado legislative session, PERA’s financial profile—as well as the state’s—is now on more stable long-term footing. But keeping the pension fund on its most productive path is an ongoing challenge, and Baker used his discussion with the <em>DBJ</em> to summarize what was accomplished with SB 200, what challenges lie ahead, and how he plans to lead the organization through its next phase.</p>



<p>Read Baker&#8217;s interview with the <em>DBJ</em> <a href="https://www.bizjournals.com/denver/news/2018/09/13/colorado-pera-stabilizes.html?b=1536847739%5E21339113" target="_blank" rel="noreferrer noopener">here</a>.</p>


Denver Business Journal interview with Ron Baker


<p>In late August, the PERA Board of Trustees <a href="https://content.copera.org/pera-board-names-ron-baker-sole-finalist-for-executive-director/" target="_blank" rel="noreferrer noopener">named Ron Baker</a> as the finalist for PERA’s Executive Director. Currently serving as the Interim Executive Director, Mr. Baker will officially be named to the position pending contract negotiations and final Board approval.</p>



<p>The process for selecting PERA’s new leader began in January when Board Chairman Timothy M. O’Brien created a special ad hoc committee. Trustee David Hall chaired the committee, with Trustees Amy Grant, Roger Johnson, Suzanne Kubec, Bill Parker, and Walker Stapleton serving as members. These trustees represented a cross-section of the PERA Board, bringing together trustees elected by members of the School, Denver Public Schools, and State Divisions, along with a governor-appointed trustee and the State Treasurer.</p>



<p>The Ad Hoc Committee worked with PERA Human Resources to create a list of priorities for the outside search firm that would assist in filling the position. From a group of three finalists, <a href="https://www.eflassociates.com/" target="_blank" rel="noreferrer noopener" class="broken_link">EFL Associates</a> was tapped to manage the search process.</p>



<p>The Committee, PERA HR, and EFL spent the next month finalizing the job description before posting the announcement in national and pension industry publications. In addition to receiving outside applications, EFL used its extensive recruiting database to create a pool of candidates. After a series of interviews, the Board invited four candidates for further discussions.</p>



<p>After these four interviews were conducted before the full Board, the Trustees announced that Ron Baker had been named the finalist.</p>



<p>“The Ad Hoc Committee was committed to reaching out nationally to find the very best candidates for the PERA Executive Director position,” said David Hall, Ad Hoc Committee Chairman. “It was important that we found candidates who reflected the values of PERA members and who were committed to working with PERA’s hard-working employees to ensure PERA continued to be a leader in the pension field.”</p>



<p>Mr. Baker has served as the Interim Executive Director since December. After joining PERA in 1994, he held several management positions overseeing information technology and was appointed Chief Administrative Officer in 2013.</p>



<p>“The Board embarked on a thorough and competitive process to ensure that the most qualified candidate would be installed to lead PERA,” said PERA Board of Trustees Chairman Timothy M. O’Brien. “Ron’s qualifications and commitment to PERA are unparalleled. In addition to his decades of tenure at PERA, he led the organization through a challenging time during the first part of this year that included a legislative session in which major changes were made to the retirement plan. He was the clear and unanimous choice for the Board.”</p>



<p>Mr. Baker is a graduate of the University of Northern Colorado with a degree in mathematics with a dual emphasis in computer science and mathematics. He is a graduate of the Executive Leadership Program at the Daniels College of Business at the University of Denver.</p>



<p>“I appreciate the confidence of the Board in me to continue to serve the PERA membership,” said Baker. “I look forward to helping guide PERA into this next chapter.”</p>



<p>In his new role, Mr. Baker becomes the seventh executive director of the $49 billion retirement system, which was established in 1931 by the Colorado General Assembly.</p>



<p>In late August, the PERA Board of Trustees <a href="https://content.copera.org/pera-board-names-ron-baker-sole-finalist-for-executive-director/" target="_blank" rel="noreferrer noopener">named Ron Baker</a> as the finalist for PERA’s Executive Director. Currently serving as the Interim Executive Director, Mr. Baker will officially be named to the position pending contract negotiations and final Board approval.</p>



<p>The process for selecting PERA’s new leader began in January when Board Chairman Timothy M. O’Brien created a special ad hoc committee. Trustee David Hall chaired the committee, with Trustees Amy Grant, Roger Johnson, Suzanne Kubec, Bill Parker, and Walker Stapleton serving as members. These trustees represented a cross-section of the PERA Board, bringing together trustees elected by members of the School, Denver Public Schools, and State Divisions, along with a governor-appointed trustee and the State Treasurer.</p>



<p>The Ad Hoc Committee worked with PERA Human Resources to create a list of priorities for the outside search firm that would assist in filling the position. From a group of three finalists, <a href="https://www.eflassociates.com/" target="_blank" rel="noreferrer noopener" class="broken_link">EFL Associates</a> was tapped to manage the search process.</p>



<p>The Committee, PERA HR, and EFL spent the next month finalizing the job description before posting the announcement in national and pension industry publications. In addition to receiving outside applications, EFL used its extensive recruiting database to create a pool of candidates. After a series of interviews, the Board invited four candidates for further discussions.</p>



<p>After these four interviews were conducted before the full Board, the Trustees announced that Ron Baker had been named the finalist.</p>



<p>“The Ad Hoc Committee was committed to reaching out nationally to find the very best candidates for the PERA Executive Director position,” said David Hall, Ad Hoc Committee Chairman. “It was important that we found candidates who reflected the values of PERA members and who were committed to working with PERA’s hard-working employees to ensure PERA continued to be a leader in the pension field.”</p>



<p>Mr. Baker has served as the Interim Executive Director since December. After joining PERA in 1994, he held several management positions overseeing information technology and was appointed Chief Administrative Officer in 2013.</p>



<p>“The Board embarked on a thorough and competitive process to ensure that the most qualified candidate would be installed to lead PERA,” said PERA Board of Trustees Chairman Timothy M. O’Brien. “Ron’s qualifications and commitment to PERA are unparalleled. In addition to his decades of tenure at PERA, he led the organization through a challenging time during the first part of this year that included a legislative session in which major changes were made to the retirement plan. He was the clear and unanimous choice for the Board.”</p>



<p>Mr. Baker is a graduate of the University of Northern Colorado with a degree in mathematics with a dual emphasis in computer science and mathematics. He is a graduate of the Executive Leadership Program at the Daniels College of Business at the University of Denver.</p>



<p>“I appreciate the confidence of the Board in me to continue to serve the PERA membership,” said Baker. “I look forward to helping guide PERA into this next chapter.”</p>



<p>In his new role, Mr. Baker becomes the seventh executive director of the $49 billion retirement system, which was established in 1931 by the Colorado General Assembly.</p>


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