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The investment staff at Colorado PERA have a large responsibility: managing more than $61 billion for the defined benefit plans and almost $6 billion for the defined contribution plans on behalf of current and former public employees.



We operate a low-cost investment program—management expenses amount to less than one-half of one percent of the total fund—and staff are always looking for ways to improve. One way we reduce costs for members is by managing a large portion of the portfolio internally rather than paying outside managers.



PERA started managing some assets internally in the 1970s, and we’ve been expanding that capability where appropriate over the years. We now internally manage about 60% of all <a href="https://www.copera.org/investments/defined-benefit-db-plan-assets" target="_blank" rel="noreferrer noopener">DB Plan investments</a>.



We estimate we save our members at least $65 million a year in fees by managing PERA Defined Benefit (DB) Plan assets in-house and, through reductions in administration and investment management fees, have achieved an 82% decrease in fees in the PERAPlus 401(k) plan since 2011.



A new strategy PERA’s investment team has been exploring in recent years is unitization.



<h2 style="color:#000000;" class="wp-block-heading has-black-color has-text-color has-medium-font-size">What is unitization?</h2>



Perhaps the easiest way to understand unitized investment products is to think of them like mutual funds—investors pool their resources in a fund which invests in a mix of investments, and each investor owns shares (or units) of the pool. This can make it easier for individual investors to have exposure to assets that are often only available to large institutional investors, since plan participants can own a portion of the overall pool instead of having to buy each underlying asset.



In the context of PERA’s investment program, unitizing offers to participants in the <a href="https://www.copera.org/investments/defined-contribution-dc-plan-investments" target="_blank" rel="noreferrer noopener">PERA Defined Contribution (DC) Plan</a> and the <a href="https://www.copera.org/retirees/peraplus-401-k-457-plans" target="_blank" rel="noreferrer noopener">PERAPlus 401(k) and 457 Plans</a> the opportunity to invest alongside the PERA DB Plan in a combined pool of assets while reaping the benefits of the professional management experience of our staff.



Unlike the DB Plan, participants in the DC Plan and PERAPlus plans make their own investment decisions and select from a variety of white label funds that are overseen by internal and/or external asset managers. One goal of unitization is to increase the amount of assets managed internally, which reduces the amount of money participants pay in fees to those external managers.



“We have a highly skilled team of investment professionals who work every day to be effective and responsible stewards of the DB Plan’s assets,” said Chief Investment Officer/Chief Operating Officer Amy C. McGarrity. “I’m glad we can extend some of that investment management expertise to our DC Plan and PERAPlus participants and potentially lower their investment management fees.”



PERA’s investment team began exploring unitization several years ago and completed work on unitizing the <a href="https://copera.org/pera-on-the-issues/asset-classes-explained-fixed-income" target="_blank" rel="noreferrer noopener">Fixed Income asset class</a> in 2022, producing cost savings for participants in the PERAdvantage Fixed Income fund. In early 2025, staff completed unitization of the <a href="https://copera.org/pera-on-the-issues/asset-classes-explained-global-equity" target="_blank" rel="noreferrer noopener">Global Equity asset class</a>, PERA’s largest, which allows for improved efficiencies in administration.



PERA’s investment team has long-term aspirations, including the potential of eventually unitizing the entire DB Plan portfolio or offering custom-built target retirement date funds.



Unitization is just one way PERA staff are working to innovate and modernize the services we provide to our members and ensure a secure retirement for the hundreds of thousands of current and former public employees who serve Colorado.

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Unitization: Leveraging PERA’s Investment Expertise to Benefit Our Participants