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.

Every year—often in the spring—publicly traded companies hold shareholder meetings and ask their investors to weigh in on issues such as corporate leadership and policies. It’s an important process, and one Colorado PERA takes seriously as an institutional investor.



At its September 20 meeting, the PERA Board of Trustees voted to approve updates to its Proxy Voting Policy, which guides staff in exercising PERA’s shareholder voting rights.



<h4 class="wp-block-heading">What is proxy voting?</h4>



Simply put, proxy voting is the process that allows shareholders—individuals who own stock in a company, as well as institutional investors like PERA—to provide their input on corporate management decisions without having to be present at shareholder meetings. Proxy voting matters can come from a company’s board or its shareholders, and they cover important decisions such as approving the members of the board, mergers, acquisitions, and the types of disclosures a company makes to its shareholders.



The PERA Board believes the shareholder right to vote is an asset of the plans to be managed under fiduciary care. Because PERA invests to provide retirement income for nearly 700,000 current and former public employees, our focus is on voting to encourage corporate behavior that can generate long-term financial value. Proxy voting is one way we practice investment stewardship for the benefit of our members. &nbsp;



In 2023, PERA cast votes on more than 68,000 proposals in more than 6,000 shareholder meetings. The overwhelming majority of those proposals—more than 99%—were related to corporate governance.



“Governance matters have always been our focus, and can include things like board elections and executive compensation,” said Senior Investment Stewardship Analyst Luz Rodriguez. “Those decisions can impact a company’s financial performance, which can, in turn, affect the investments we make on behalf of PERA members.”



<h4 class="wp-block-heading">Updating PERA’s policy</h4>



Over the course of several months, PERA staff have worked closely with the Board’s Investment Committee to review and update the Proxy Voting Policy. The full Board approved those changes in September, and they will go into effect in January 2025. The last update took place in 2021.



While some of the updates simply clean up or clarify language in the policy, others are more substantive and aim to provide additional information on PERA’s voting philosophy and processes. They include:



<ul>
<li>Clarifying PERA’s focus on governance matters. Not only are most proxy voting proposals related to corporate governance, but there’s a good body of research supporting the role of good governance in generating long-term value for shareholders.</li>



<li>Broadening the general scope of the policy to be more reflective of PERA’s global investments. For example, the updated policy refers to generally accepted accounting standards rather than U.S.-specific standards and expands language on greenhouse gas emission disclosures.</li>



<li>Clarifying which duties and responsibilities fall under the Board’s governance policy versus general practices. The Board is responsible for overseeing PERA’s investment program, including proxy voting. The Investment Committee is responsible for recommending changes to, and monitoring compliance with, governance and proxy voting policies, and staff is responsible for voting and reporting proxies.</li>



<li>Expanding on PERA’s approach to corporate board composition. The updated policy states that PERA will vote for proposals asking a company to provide a skills matrix that outlines the skills, experiences, background, and qualifications of board members, which can help give shareholders a better understanding of a board’s collective capabilities. The updated policy also states PERA will vote against certain director nominees if the company’s board does not provide this disclosure.</li>
</ul>







Through regular review and updates to the Proxy Voting Policy, the Board ensures that PERA’s policies effectively guide staff in engaging with the companies in which we invest in order to maximize risk-adjusted returns for our members.



“Our goal in voting proxies isn’t to dictate what companies do, but to encourage them to adopt sound governance practices that foster profitability and long-term shareholder value,” Rodriguez said. “As stewards of investments for nearly 700,000 current and former public employees, we take our shareholder responsibilities seriously.”



Take a deeper dive into proxy voting and PERA’s approach to investment stewardship by exploring the <a href="https://copera.org/investment-stewardship-report" target="_blank" rel="noreferrer noopener">2024 Investment Stewardship Report</a>.

PERA’s Proxy Voting Policy Receives an Update

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.



<h4 class="wp-block-heading">Strategic planning</h4>



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.



<h4 class="wp-block-heading">CEM Benchmarking report</h4>



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.



<h4 class="wp-block-heading">Pension Review Subcommittee’s review of assumptions</h4>



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.



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



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>



<h4 class="wp-block-heading">2025 Board meeting dates</h4>



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 PERA Board of Trustees has adopted new asset allocation targets following a year-long study into PERA’s investment portfolio and strategy.



The new allocation includes tweaks to several asset classes in an effort to reduce volatility in the portfolio while providing the potential for higher returns in the future.



<h4 class="wp-block-heading">Background</h4>



Every four or five years, the PERA Board conducts what is known as an asset/liability study to examine the PERA Defined Benefit Plan portfolio and ensure the mix of stocks, bonds, and other investments aligns with PERA’s funding goals. That process last took place in 2019, after which the Board adopted the current <a href="https://copera.org/asset-allocation">strategic asset allocation</a>.



The most recent asset/liability study began in September 2023, and over the past year, PERA’s investment staff have been working with the Board’s Defined Benefit investment consultant, Aon, to carry out the analysis. After examining various factors, such as the fund’s risk tolerance, market conditions, and projections for future returns, Aon presented its recommendations at the Board’s September meeting.



<h4 class="wp-block-heading">What’s changing</h4>



The new strategic asset allocation is expected to provide incrementally greater diversification in the portfolio by reducing the percentage allotted to Global Equity (i.e., stocks) and investing more in private asset classes such as Private Equity and Real Estate with the goal to slightly lower risk and add potential for higher returns over time for the entire investment portfolio.



The table below shows PERA’s current long-term target allocation and the new targets the Board adopted.



<figure class="wp-block-table"><table><thead><tr><th>Asset Class</th><th>Current Target</th><th>New Target</th></tr></thead><tbody><tr><td>Global Equity</td><td>54.0%</td><td>51.0%</td></tr><tr><td>Fixed Income</td><td>23.0%</td><td>23.0%</td></tr><tr><td>Private Equity</td><td>8.5%</td><td>10.0%</td></tr><tr><td>Real Estate</td><td>8.5%</td><td>10.0%</td></tr><tr><td>Alternatives</td><td>6.0%</td><td>6.0%</td></tr></tbody></table></figure>



Within the Alternatives asset class, the new policy increases allocations to real assets and private debt while reducing allocations to hedge funds and opportunistic investments.



By making these changes, the Board is aiming to strengthen PERA’s investment portfolio and ensure PERA remains on track to meet its goal of full funding.



“Asset allocation is the single largest driver of investment returns, and I appreciate the attention and care the Board has given to analyzing and updating our strategic asset allocation,” said Chief Investment Officer/Chief Operating Officer Amy C. McGarrity. “These new long-term targets are expected to help reduce risk in the portfolio and ensure we can continue to provide the lifetime retirement income that so many of Colorado’s public employees rely on.”



The Board also reaffirmed its long-term expected rate of return of 7.25%.



Asset Classes Explained:&nbsp;<a href="https://www.copera.org/pera-on-the-issues/asset-classes-explained-global-equity" target="_blank" rel="noreferrer noopener">Global Equity</a>&nbsp;|&nbsp;<a href="https://www.copera.org/pera-on-the-issues/asset-classes-explained-fixed-income" target="_blank" rel="noreferrer noopener">Fixed Income</a>&nbsp;|&nbsp;<a href="https://www.copera.org/pera-on-the-issues/asset-classes-explained-private-equity" target="_blank" rel="noreferrer noopener">Private Equity</a>&nbsp;|&nbsp;<a href="https://www.copera.org/pera-on-the-issues/asset-classes-explained-real-estate" target="_blank" rel="noreferrer noopener">Real Estate</a>&nbsp;|&nbsp;<a href="https://www.copera.org/pera-on-the-issues/asset-classes-explained-alternatives" target="_blank" rel="noreferrer noopener">Alternatives</a>



<h4 class="wp-block-heading">What’s next</h4>



With the Board’s adoption of a new strategic asset allocation, it’s up to PERA’s investment staff to begin the work of implementing the updated strategy. Aon expects the portfolio to reach its new long-term targets within two to three years.

PERA Board Adopts New Strategic Asset Allocation Following Study

The PERA Board of Trustees met on Friday, June 16 to take action on a number of important items, including releasing PERA’s 2022 Annual Report and announcing results of the recent Board election.



<h4 class="wp-block-heading">Board election</h4>



The Board held elections for three open seats this year. One new Trustee was elected to the Board, two Trustees were reelected, and one Trustee was reappointed:



<ul>
<li>Eunice Botchway was elected by School Division members</li>



<li>Trina Ruhland was reelected by Local Government Division members</li>



<li>Timothy M. O’Brien was reelected by retired members of the State, Local Government, and Judicial Divisions</li>



<li>Judge Rebecca R. Freyre was reappointed to the Judicial Division seat</li>
</ul>



Botchway, a special education teacher at Aurora Public Schools, fills a seat currently held by JB Phillips, who was appointed to the Board in 2022. Botchway was elected to a two-year term.



Ruhland, a deputy county attorney with the Boulder County Attorney’s Office, was elected to the seat to which she was appointed in 2022.



O’Brien, the auditor for the City and County of Denver, has served on the PERA Board since 2011.



In addition to the election results, Judge Rebecca R. Freyre was the sole candidate for the Judicial Division seat and was reappointed to the Board in March.



Ruhland, O’Brien, and Freyre will serve four-year terms beginning July 1, 2023.



Learn more about the PERA Board of Trustees at <a href="https://www.copera.org/about/board-and-leadership" target="_blank" rel="noreferrer noopener">copera.org</a>.



<h4 class="wp-block-heading">Financial results and Annual Report release</h4>



A key action the Board takes every year at its June meeting is receiving the results of its annual actuarial valuations and approving the release of PERA’s <a href="https://www.copera.org/pera-on-the-issues/pera-by-the-numbers-a-closer-look-at-the-2022-annual-report" target="_blank" rel="noreferrer noopener">Annual Comprehensive Financial Report</a> (ACFR). The 2022 ACFR contains detailed information about PERA’s finances, investment performance, and funded status for the year ended Dec. 31, 2022.



FULL ARTICLE: <a href="https://peraontheissues.com/pera-board-releases-2022-annual-report/" target="_blank" rel="noreferrer noopener">PERA Board Releases 2022 Annual Report</a>



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



The Board also received an update on the <a href="https://content.copera.org/pera-board-announces-election-results-at-june-meeting/" target="_blank" rel="noreferrer noopener">recently concluded 2023 legislative session</a>. Legislators passed three bills this year that affect PERA, and Gov. Jared Polis has signed all three into law.



One of the bills allocates additional funding to recompense PERA for the state&#8217;s missed 2020 direct distribution. Another requires PERA to include a description of climate-related investment risks, impacts and strategies in its annual <a href="https://copera.org/investment-stewardship" target="_blank" rel="noreferrer noopener">Investment Stewardship Report</a>, and the third bill reclassifies wildlife officers and parks and recreation officers with Colorado Parks and Wildlife as safety officers for determining their PERA benefits.



READ MORE: <a href="https://peraontheissues.com/colorado-legislators-pass-three-pera-related-bills-during-2023-legislative-session/" target="_blank" rel="noreferrer noopener">Colorado Legislators Pass Three PERA-Related Bills During 2023 Legislative Session</a>



The Board also received an update on legislative activity PERA staff will be involved in over the coming months before the next session begins in January. That includes regularly scheduled hearings before the Pension Review Commission, Pension Review Subcommittee, and Legislative Audit Committee this summer, the Joint Budget Committee in the fall, and the Joint Finance Committee in the winter.



In addition, the Board discussed the history of 2018’s Senate Bill 200. That bill, which is now part of state statute, included a number of major reforms that improved PERA’s financial status and established guardrails to ensure PERA is on a path to full funding by the end of 2047. <a href="https://www.copera.org/pera-board-announces-election-results-at-june-meeting" target="_blank" rel="noreferrer noopener" class="broken_link">Click here</a> for details.



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



The Board has begun the process of searching for PERA’s next executive director and is actively seeking an executive search firm to assist in that process. <a href="https://content.copera.org/pera-board-announces-election-results-at-june-meeting/" target="_blank" rel="noreferrer noopener">Click here</a> for more information on the Board’s Request for Information from qualified firms.



Throughout this year, the Board has been working to develop its next five-year strategic plan. Since Trustees would like PERA’s next executive director to be involved in that process, the Board decided to extend the existing strategic plan through the end of 2024.



The Board’s next regularly scheduled meeting is the September planning session from Sept. 20 to Sept. 22.

PERA Board Announces Election Results at June Meeting

In our recent <a href="https://peraontheissues.com/test-your-knowledge-of-pera-benefits/" target="_blank" rel="noreferrer noopener">quiz about PERA benefits</a>, there was one question that seemed to trip a lot of people up, and it had to do with the PERA Board of Trustees:



Which of the following is the PERA Board of Trustees responsible for setting?



<ul>
<li>A: Employee and employer contribution rates</li>



<li>B: Annual benefit increase amounts</li>



<li>C: Benefit eligibility requirements</li>



<li>D: All of the above</li>



<li>E: None of the above</li>
</ul>



The correct answer is E: None of the above. While the Board is tasked with overseeing PERA operations, it isn’t directly responsible for setting many of the benefits that members receive.



PERA governance and operations are split between three main entities: The state legislature, the PERA Board, and PERA staff.



<h4 class="wp-block-heading">The legislature and state law</h4>



The state legislature established PERA as an instrumentality of the state in 1931. PERA and its benefits continue to be governed under Title 24, Article 51 of the Colorado Revised Statutes, also known as <a href="https://content.copera.org/what-roles-do-the-general-assembly-and-board-play-at-pera/" target="_blank" rel="noreferrer noopener">PERA Law</a>.



State statute lays out in detail the various provisions that determine who receives PERA benefits, when, and how much they receive, including:



<ul>
<li>Contribution amounts</li>



<li>How service credit can be accrued and purchased</li>



<li>Benefit options and eligibility</li>



<li>Annual benefit increases</li>
</ul>



Because the legislature is responsible for setting benefits, any changes to PERA benefits must also happen at the State Capitol. Change happens when lawmakers bring forth a bill, which then makes its way through the <a href="https://www.youtube.com/watch?v=WLOeY1h1TFo" target="_blank" rel="noreferrer noopener">legislative process</a> with a majority vote in the House and Senate, along with the governor’s signature. Neither the Board nor PERA staff have the power to change any of the provisions set in statute.



So far this year, lawmakers have introduced more than a half-dozen bills pertaining to PERA and its members. <a href="https://peraontheissues.com/2023-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">Click here</a> for the latest on where those bills stand.



The legislature also conducts routine oversight of PERA. Various legislative panels meet regularly with PERA leadership and staff, including the Legislative Audit Committee, the House and Senate Finance Committees, the Joint Budget Committee, the Pension Review Commission and the Pension Review Subcommittee.



<h4 class="wp-block-heading">The PERA Board of Trustees</h4>



The <a href="https://www.copera.org/about/board-and-leadership" target="_blank" rel="noreferrer noopener">PERA Board</a> is made up of 16 members: three Trustees appointed by the Governor and confirmed by the Senate; four members from the School Division; three members from the State Division; one member from the Local Government Division; one Judicial Division member; two PERA retirees; a non-voting representative from the DPS Division; and the State Treasurer as an ex officio, voting member. As fiduciaries, the Board has a responsibility to act in the best interests of PERA members.



While the legislature sets benefits and other important plan provisions, the PERA Board is responsible for administering those benefits and overseeing PERA operations and management. The Board’s <a href="https://www.copera.org/about/board-of-trustees" target="_blank" rel="noreferrer noopener" class="broken_link">Governance Manual</a>, which adheres to best practices in public pension governance, defines these responsibilities. They include:



<ul>
<li>Setting rules and policy for PERA administration</li>



<li>Establishing organizational priorities and strategies</li>



<li>Overseeing PERA’s investment program</li>
</ul>



The Board also reviews and releases various important reports each year. That includes the Annual Comprehensive Financial Report (ACFR), which provides details about PERA’s financial status, funded status and membership statistics. The ACFR will be available following the Board’s June meeting.



<h4 class="wp-block-heading">PERA staff</h4>



While the legislature and Board establish policy and rules, PERA staff are responsible for administering plan benefits and managing day-to-day operations. PERA currently employs approximately 300 people who work every day to meet the goals set out in the Board’s <a href="https://www.copera.org/what-roles-do-the-general-assembly-and-board-play-at-pera" target="_blank" rel="noreferrer noopener" class="broken_link">strategic plan</a>. Some of those duties include:



<ul>
<li>Processing employee and employer contributions</li>



<li>Managing PERA’s investments</li>



<li>Distributing retirement payments and other benefits</li>



<li>Member communications and education</li>
</ul>



Providing retirement and other benefits to nearly 650,000 members is a big job, and it’s one we take seriously. The state legislature, PERA Board, and PERA staff all play important roles in making sure Colorado’s public employees will be able to receive reliable retirement income today and for generations to come.

What Roles Do the General Assembly and Board Play at PERA?

The PERA Board of Trustees met on Friday, March 24 for its second regular meeting of 2023.



The meeting began with public comment and Board committee reports from the day before, followed by an update on the upcoming Board election and reports from PERA staff.



<h4 class="wp-block-heading">Board election</h4>



Four seats on the Board are up for election this year, and members interested in serving as a PERA trustee were able to submit their candidate packets in January and February.



Of those four seats, three received enough qualified candidates to hold an election in May: Seats in the School and Local Government divisions, and a retiree seat. As the sole candidate for the Judicial division seat, the Trustees appointed Hon. Rebecca R. Freyre to another four-year term in that seat.



Ballots will go out to active members in the School and Local Government divisions, as well as retirees in the State, Local Government, and Judicial divisions in early May, and the Board will announce election results at its June 16 meeting.



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



PERA Public and Government Affairs Manager Michael Steppat and Chief Investment Officer and Chief Operating Officer Amy C. McGarrity provided the Board with an update on legislative activity at the State Capitol. The Colorado General Assembly got underway in early January, and so far, lawmakers have introduced more than 450 bills.



There are three bills pertaining to PERA that are still under consideration in the legislature:&nbsp;<a href="https://leg.colorado.gov/bills/sb23-056" target="_blank" rel="noreferrer noopener">SB23-056</a> aims to fully recompense PERA for the state’s missed 2020 payment of $225 million to PERA;&nbsp;<a href="https://leg.colorado.gov/bills/sb23-016" target="_blank" rel="noreferrer noopener">SB23-016</a> would require PERA to include in its annual&nbsp;<a href="https://www.copera.org/investment-stewardship" target="_blank" rel="noreferrer noopener">Investment Stewardship Report</a>&nbsp;a description of climate-related investment risks, impacts and strategies; and <a href="https://leg.colorado.gov/bills/sb23-163" target="_blank" rel="noreferrer noopener">SB23-163</a> would reclassify wildlife officers and parks and recreation officers employed by Colorado Parks and Wildlife as safety officers for the purpose of determining their PERA benefits.



The Board also discussed <a href="https://leg.colorado.gov/bills/hb23-1016" target="_blank" rel="noreferrer noopener">HB23-1016</a>, which would provide a temporary tax credit of $700 for public service retirees in Colorado. That bill was introduced in January as is currently awaiting consideration by the House Appropriations Committee. 



Four other PERA-related bills have been postponed indefinitely.



<blockquote class="wp-block-quote">
READ MORE: <a href="https://peraontheissues.com/2023-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">2023 Proposed Legislation Status</a>
</blockquote>



The current legislative session will wrap up by May 8.



<h4 class="wp-block-heading">Strategic planning</h4>



The Board continued its work developing a new strategic plan that will guide the PERA Board and staff into the future. As part of that process, Trustees reviewed a SWOT (strengths, weaknesses, opportunities, and threats to the organization) analysis and discussed the results of that process. The SWOT analysis will help inform the Board’s work of identifying goals to pursue over the next half-decade and beyond.



The Board will continue working on a draft plan throughout the year.



The Board’s next scheduled meeting is June 16.

PERA Board Discusses Board Election, Legislation at March Meeting

Four seats on the Colorado PERA Board of Trustees are up for election this year, and candidacy packets are now available to those interested in running.



The Board of Trustees plays a vital role in PERA’s operations, overseeing the administration of all benefits and programs at PERA. The Board comprises 16 Trustees, and PERA members and retirees directly elect 12 of them. The governor appoints three (with approval by the Senate), and the State Treasurer serves as an ex officio member. Elected Board members serve without pay, but are reimbursed for necessary expenses.



The four seats up for election this year are:



<ul>
<li>School Division – currently held by JB Phillips</li>



<li>Local Government Division – currently held by Trina Ruhland</li>



<li>Judicial Division – currently held by Hon. Rebecca R. Freyre</li>



<li>Retiree – currently held by Timothy M. O’Brien</li>
</ul>



Any person interested in running for an open seat in their division can request a candidacy packet between now and Feb. 28. In this election, the retiree seat is open only to retirees from the State, Local Government, and Judicial divisions. Candidates must then gather the required signatures from members in their divisions and submit by March 1.



In early May, every PERA member whose division has an open seat will receive a ballot in the mail. If only a single candidate runs in a division, no election is held if approved by the Board, and no ballots will be mailed.



The Board will announce election results in June.



Visit <a href="https://www.copera.org/about/board-and-leadership" target="_blank" rel="noreferrer noopener">copera.org/board-of-trustees</a> for more information.

Candidacy Open for Four PERA Board Seats in 2023

The PERA Board of Trustees met for its last meeting of 2022 on Nov. 18. The Board heard updates from PERA staff and consultants, and considered several important issues, including the next Board election, the member contribution interest rate, the results of the actuarial audit, and the Board’s strategic planning process.



<h4 class="wp-block-heading">2023 Board election</h4>



The Board approved the calendar for the 2023 Board election, where four seats will be up for election:



<ul>
<li>School Division – currently held by JB Phillips</li>



<li>Local Government Division – currently held by Trina Ruhland</li>



<li>Judicial Division – currently held by Hon. Rebecca R. Freyre</li>



<li>Retiree – currently held by Timothy M. O’Brien</li>
</ul>



Candidacy application will begin January 3 and the election will be held in May



<h4 class="wp-block-heading">Member contribution interest rate</h4>



By statute, the PERA Board is required to set the interest rate paid on PERA Defined Benefit (DB) Plan accounts. In 2020, the Board <a href="https://content.copera.org/recap-of-the-pera-boards-november-2022-meeting-2/" target="_blank" rel="noreferrer noopener">updated their policy</a> regarding the setting of the interest rate. The policy reflects the Board’s principles and evaluates the interest rate as a component of members’ overall retirement benefit. Based on the guidance provided in the policy, the Board voted to keep the current rate of 3% (compounded annually) for 2023.



If a PERA member leaves PERA-covered employment and requests a refund of their DB account, they receive their contributions, the interest earned on that balance, and any applicable employer match. If that member keeps their account with PERA, however, their balance will continue to accrue interest and the member will be eligible for a lifetime monthly benefit when reaching retirement eligibility.



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



The Board heard the results of <a href="https://content.copera.org/recap-of-the-pera-boards-november-2022-meeting-2/" target="_blank" rel="noreferrer noopener">an independent audit</a> of the work of PERA’s actuarial consultants, The Segal Group, Inc. The audit, by consulting firm Buck Global, LLC, found that Segal’s actuarial assumptions and methods are sound and in compliance with actuarial standards of practice.



<blockquote class="wp-block-quote">
Related: <a href="https://peraontheissues.com/explaining-the-role-of-actuaries-in-retirement-plans-like-pera/" target="_blank" rel="noreferrer noopener">Explaining the Role of Actuaries in Retirement Plans like PERA</a>
</blockquote>



<h4 class="wp-block-heading">Strategic plan update</h4>



Executive Director Ron Baker spoke about how the Board is continuing with its yearlong process to develop a new strategic plan to guide the organization and emphasized the current plan’s four key goals: (1) To fortify PERA’s financial resilience and adaptability, (2) to elevate PERA’s identity among stakeholders to that of a partner, (3) to strengthen organizational health and performance, and (4) to improve retirement security through “best fit” products, services, and education.



The Board will continue working on a draft plan throughout 2023, with the goal of adopting a new strategic plan for 2024 – 2029 by the end of the year. The strategic plan will guide the efforts of PERA staff.

Recap of the PERA Board’s November 2022 Meeting

Four PERA Board seats are up for election in 2021. 



At the PERA Board meeting on March 19, the following details of the races were shared:



<ul><li>Three candidates are running for one open seat representing the State Division</li><li>Five candidates are running for two open seats representing the School Division</li><li>Four candidates are running for one open seat representing retirees in in the School Division</li></ul>



<h4 class="wp-block-heading">Election Timeline</h4>



<ul><li>May 3: Candidate responses to questions posted on copera.org</li><li>May 3-7: Ballots mailed to PERA members and retirees whose representative(s) are up for election</li><li>May 21: Deadline for members and retirees requesting a duplicate or special ballot</li><li>May 31: Deadline for ballots to be postmarked; Internet and phone voting closes at midnight (Mountain Time)</li><li>Mid-June: PERA notifies winning candidates of preliminary election results</li><li>June 18: Presentation of certified election results to Board for approval. PERA will notify all candidates of certified results after Board approval.</li><li>July 1: Deadline for ballot recount requests</li></ul>



<h4 class="wp-block-heading">PERA Board – Duties and Organization</h4>



Oversight and management of PERA is divided among a number of entities. The Colorado General Assembly sets contribution rates and benefit levels. State statute creates and empowers PERA’s Board of Trustees to set PERA policy and oversee PERA programs and operations. PERA staff implements the Board’s policies.



The 16-member Board includes: 12 Trustees elected by PERA members and retirees (including one non-voting member), three Trustees appointed by the governor and confirmed by the Senate, and the State Treasurer.



Board members are fiduciaries, which means they are required to act in the best interest of members. In addition to attending Board meetings, Trustees serve on various PERA subcommittees and are required to spend a certain number of hours attending educational sessions.

What You Need to Know about the Upcoming Board Election

Colorado PERA’s Board of Trustees met on Friday, September 11. In the meeting, the Board reviewed a report assessing its governance procedures and heard reports from staff, among other agenda items.



Staff Reports



PERA Executive Director Ron Baker noted the continuing ways in which PERA has adapted to a vastly changed environment. Baker shared with the Board up-to-date membership statistics:


<div class="wp-block-image is-style-default">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="517" height="301" src="https://content.copera.org/wp-content/uploads/2020/09/image.png" alt="" class="wp-image-44159" srcset="https://content.copera.org/wp-content/uploads/2020/09/image.png 517w, https://content.copera.org/wp-content/uploads/2020/09/image-300x175.png 300w" sizes="(max-width: 517px) 100vw, 517px" /></figure></div>


PERA’s Chief Investment Officer, Amy C. McGarrity, updated the Board on market conditions and PERA’s portfolio. She noted that the quick recovery seen in public equities has been as much as a surprise as the onset of the global pandemic and swift market decline.



This recovery, however, has been uneven as a few companies account for a significant portion of the recovery while other economic indicators, like employment, still face serious challenges ahead.



She added that, while the investment team did reallocate funds within asset classes in the preceding months, these changes were made within the framework of the <a href="https://peraontheissues.com/pera-board-meeting-notes-setting-peras-portfolio-mix/" target="_blank" rel="noreferrer noopener">Board’s asset allocation policy </a>rather than a tactical move.



Patrick Lane, PERA’s Chief Benefits Officer, shared a report outlining PERA’s service delivery so far this year. The number of retirements through July 31 is nearly identical to 2019. And, despite PERA’s physical buildings being closed to the public since March, PERA counselors have performed nearly as many individual counseling sessions as in 2019. However, PERA has processed nearly 15% more benefit estimates and 20% more applications to purchase service credit compared to last year.



Other details Lane shared include:



<ul>
<li>Member savings in <a href="https://www.copera.org/recap-of-pera-boards-september-meeting" class="broken_link">PER</a><a href="https://www.copera.org/recap-of-pera-boards-september-meeting" target="_blank" rel="noreferrer noopener" class="broken_link">A</a><a href="https://www.copera.org/recap-of-pera-boards-september-meeting" class="broken_link">Plus </a>457 plans recently crested $1 billion for the first time.</li>



<li>The call center has answered 122,976 calls through July 31. The most frequent questions have been about health care, web access, and retirement planning.</li>



<li>93,347 people are enrolled in <a href="https://www.copera.org/peracare" target="_blank" rel="noreferrer noopener">PERACare plans</a>.</li>



<li>The Field Education team quickly moved their curriculum to online-based <a href="https://www.copera.org/members/webinars" target="_blank" rel="noreferrer noopener">webinars </a>and have reached more than 15 times as many people through digital means compared to 2019.</li>
</ul>



Governance Review



The Board routinely has third parties assess its procedures and operations. Cortex Applied Research, the Board’s governance consultant, analyzed the Board’s governance framework and fiduciary best practices. Their findings included:



<ul>
<li>PERA’s Governance Manual “ranks very highly; it is consistent with the published standards in almost all respects and generally meets or exceeds the practices of the peer group.”</li>



<li>The Manual “is among the most detailed and comprehensive manuals in the Peer Group.”</li>



<li>“The code of conduct was also particularly strong.”</li>



<li>PERA’s Governance Manual is held up as an example in multiple industry publications.</li>
</ul>

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