Latest PERA News
This section contains current items of interest to PERA members and retirees and the general public. For other news regarding PERA, you also may want to view the PERA News Archives. Any questions or comments regarding this information may be directed to PERA via e-mail.
PERA Cancels Meetings in Denver
Colorado PERA's meetings scheduled for February 4, 2012, in Denver are canceled due to the continuing Winter Storm and heavy snowfall.
Canceled Meetings:February 4, 2012
Denver
Group Workshop, 8:00 a.m. - 9:30 a.m.
Benefit Information Meeting, 10:00 a.m. - 12:00 p.m.The canceled Denver meetings were scheduled at Penn Center, 1301 Pennsylvania St, Denver, 80203
The decision to cancel the meetings was made in the best interest of the safety of Colorado PERA members and staff who would have to travel to Denver. Weather and road conditions are to be hazardous through the morning hours.
We regret any inconvenience that this may cause PERA members. Efforts will be made to reschedule the sessions in the next several weeks. Please consult PERA's Web site for further updates.
For further details or information, contact Dennis Gatlin, Colorado PERA Field Education Services Director, at 303-863-3788 or dgatlin@copera.org.
PERA Cancels Meetings in Colorado Springs and Fort Collins
Colorado PERA's meetings scheduled for February 2, 2012, in Colorado Springs and Fort Collins are canceled due to a winter storm warning and the potential for heavy snowfall.
Canceled Meetings:February 2, 2012
Colorado Springs
Fort CollinsRetirement Process Meeting, 4:30 p.m. - 6 p.m.
PERACare Information Meeting, 6:30 p.m. - 8 p.m.The canceled Colorado Springs meetings were scheduled at the Senior Center, 1514 N. Hancock, Colorado Springs, 80903
Retirement Process Meeting, 4:30 p.m. - 6 p.m.
PERACare Information Meeting, 6:30 p.m. - 8 p.m.The canceled Fort Collins meetings were scheduled at the Hilton Fort Collins, 425 W. Prospect Rd., Fort Collins, 80526
The decision to cancel the meetings was made in the best interest of the safety of Colorado PERA members and staff who would have to travel to Colorado Springs and Fort Collins. Road conditions are expected to be extremely hazardous due to snow accumulations up to 8 inches and high winds.
We regret any inconvenience that this may cause PERA members. Efforts will be made to reschedule the sessions in the next several weeks. Please consult PERA's Web site for further updates.
For further details or information, contact Dennis Gatlin, Colorado PERA Field Education Services Director, at 303-863-3788 or dgatlin@copera.org.Economic and Fiscal Impacts Study Now Available
A study prepared by Pacey & McNulty that measures the positive economic and fiscal impacts of PERA's benefit payments to Colorado recipients is now available. This research shows that the $3 billion in PERA benefit payments made annually to Colorado residents are an important driver in the Colorado economy and represent 3.3 percent of statewide income, generate $230 million in tax revenue to local and state government, and create over 23,000 jobs in Colorado. This study is a follow-up to the initial study completed in August 2009. Review the Economic and Fiscal Impacts study.
Colorado PERA Produces New Fact Sheets
Colorado PERA has produced two new fact sheets: What Counts as PERA-Includable Salary and Taxes on PERA Benefits (State Trooper and CBI Agent Provisions). The What Counts as PERA-Includable Salary fact sheet provides information about per diem and reimbursement payments and when such extra payments are considered PERA-includable salary. The Taxes on PERA Benefits (State Trooper and CBI Agent Provisions) fact sheet outlines when a State Trooper or CBI Agent might be entitled to special tax treatment as it relates to PERA benefits and the responsibility of claiming the tax exclusion. Both of these fact sheets are now available on the PERA Web site.
PERAPlus and DC Plan Account Balance Error
On December 30, 2011, an ING programming error caused PERAPlus and DC Plan accounts to incorrectly show a zero balance. The error was corrected late Sunday, January 1, 2012, and all account balance information has been restored. Money in individual accounts was never removed from the participants’ accounts and no units were sold, transferred, or otherwise compromised.
You may review your PERAPlus and/or DC Plan account balance by logging on to your account.
Colorado PERA Issues RFP for the Custodial Services for PERA’s Facilities
Colorado PERA has issued an RFP for the custodial services for PERA’s facilities. Those interested in submitting a response to the RFP should contact Dennis Fischer, Director of Property Management, via e-mail.
RFP responses must be received by PERA on or before 4:30 p.m. (Mountain time) on Wednesday, December 28, 2011.
Colorado PERA Issues RFP for Consulting Services for the PERACare Health Benefits Program
Colorado PERA has issued an RFP for the PERACare Health Benefits Program consulting services. Those interested in submitting a response to the RFP should contact Wendy Tenzyk, Director of Insurance, via e-mail.
RFP responses must be received by PERA on or before 4:30 p.m. (Mountain time) on January 13, 2012.
Board of Trustees Election Slated–Candidates Sought
In May 2012, Colorado PERA will hold an election for seats on the Board of Trustees for the following positions:
- One State Division position
- One School Division position
- One Denver Public Schools (DPS) Division position
This is the first time an election will be held for the DPS Division position. Previously, the DPS seat has been appointed. Both members and retirees may run for this non-voting position.
Candidacy packets will be available January 3, 2012, and may be obtained by writing to:
Colorado PERA
Internal Audit Division
1301 Pennsylvania Street
Denver, CO 80203-5011
To be placed on the ballot, a candidate must fulfill the requirements explained in the candidacy packet. Requests for candidacy packets should include the name, Social Security number, PERA Division of membership, mailing address, daytime telephone number, and signature of the candidate.
Candidates will be subject to a background check. Members from the State Division who are interested in being a candidate should also indicate whether they are a member of the PERA defined benefit or defined contribution plan.
Ballots will be mailed in early May to the following:
- Members of the State Division
- Members of the School Division
- Members and retirees from the DPS Division
Returned ballots must be postmarked by May 31, 2012.
PERA will be holding elections for the seats currently held by Richard Delk from the State Division, Amy Nichols from the School Division, and Wayne Eckerling from the DPS Division, whose terms expire June 30, 2012. All positions are for four-year terms.
The Board of Trustees meets at least five times per year and is responsible for adopting the rules and policies for the administration of PERA. Elected Board members serve without pay, but are reimbursed for necessary expenses.
Reminder—Account Access Changes
The way you access your PERA account online has changed. Details on the change are available on the Account Access Changes fact sheet or by reviewing recent Member Report and Retiree Report articles.
Colorado PERA Board of Trustees Retains Current Investment Rate of Return
On Friday, November 18, the PERA Board of Trustees kept the plan’s expected rate of return for the next 30 years at 8.0 percent. The Board reviews the rate of return assumption on an annual basis.
The Trustees set the rate of return assumption based on information provided by nationally recognized actuarial and financial experts, who review financial markets and other demographic factors.
At a day-long workshop last week, Trustees heard from their investment consultant Hewitt EnnisKnupp, and their actuarial firm, Cavanaugh Macdonald Consulting. Hewitt EnnisKnupp recommended a 7.7 percent expected return for the next 10 years, while Cavanaugh Macdonald recommended an 8 percent investment rate of return over the next 30 years.
Hewitt EnnisKnupp, Inc., an Aon company, provides investment consulting services to over 500 clients in the United States and abroad with total client assets of over $2 trillion. Cavanaugh Macdonald serves as the actuary and health care consultant for statewide and municipal retirement systems and retiree health care plans across the nation.
What is the assumed rate of return?
The assumed rate of return is used by retirement funds to estimate what their unique set of investments will return over a long time horizon. The rate of return assumption has various components, or building blocks, including what inflation will be in the future, and what income PERA’s investment portfolio will generate over time.
How is the rate of return used and why is it important?
The rate of return is used as a predictor of the amount of money an investment portfolio will generate over time. It is known as the “asset side” of retirement funding. Sixty percent of the money in PERA’s trust funds comes from investing retirement contributions from public employees and their employers.
The other side of the equation represents the liabilities – or the total cost of providing earned retirement benefits. When the two numbers, assets and liabilities, are compared, the result is the funded status, reported as a percentage.
Legislation enacted in 2010 reduced the costs of PERA benefits (liabilities), and PERA is projected to be fully funded in 30 years if the rate of return and other assumptions are met.
What happens when the rate of return is lowered or increased?
Because the rate of return is used to calculate the asset growth over time, if the rate is lowered, the funded status of the plan decreases and liabilities will take longer to pay off. Conversely, if the rate of return is increased, the funded status of the plan improves and the length of time to pay off liabilities is shortened.
PERA has been a leader in the reporting of the impact of various investment rates of return. In the Comprehensive Annual Financial Report (CAFR), the impact or “sensitivity” of changing the rate of return is calculated for a 1.5 percent increase or decrease (in 0.5 percent increments).
Why do some question PERA’s assumed rate of return?
Concern about the rate of return sometimes arises when individuals compare their investments to PERA’s. Differences between the two types of investors – individuals and institutions – must be taken into account.
- First, as an institutional investor, PERA has many decades to invest the contributions from members and their employers. Individual investors typically have a much shorter time horizon.
- Second, institutional investors like PERA have access to types of investments (such as private equity and real estate) that individual investors cannot access in the retail mutual fund market. (PERA does not invest in mutual funds.)
- Third, by pooling its tens of billions of dollars of investments, PERA can invest at a much lower cost than individuals.
- Finally, PERA’s investments are tax exempt.
In short, this ability to pool contributions and to invest in a wide variety of assets with low management and administration fees allows institutional investors like PERA to outperform individual investors over time.
How often is the investment rate of return assumption reviewed and has it been changed in the past?
The Board of Trustees reviews the rate of return assumption every November. The Board lowered the rate from 8.5 percent to 8.0 percent in 2009. The rate has varied over time between 7.5 and 8.75 percent.
National Association of State Retirement Administrators (NASRA) research shows that most public retirement systems use an 8.0 percent investment rate of return assumption.
What is PERA’s investment return history?
PERA earned a 14 percent return on investments in 2010. In 2009, PERA’s investments earned 17 percent. In 2008, PERA’s investments lost 26 percent. Through 2010, PERA’s annual investment returns averaged 9.0 percent over 25 years.
Account Access Changes
On December 1 the way you access your Colorado PERA account will change. More information is available on the Account Access Changes fact sheet.
Shareholder Video Now Available
A video of the 2011 Shareholder Meeting is now available.
Inclement Weather and PERA Meetings
With winter just around the corner, PERA reminds members of its policy regarding scheduled PERA meetings and inclement weather. If there are adverse weather conditions in your area on the date scheduled for a meeting, appointment, or workshop, PERA may cancel the scheduled meeting in the interest of safety for members and PERA staff traveling to the affected area. Please check this Web page or call PERA’s Customer Service Center at 1-800-759-7372 or 303-832-9550 to find out the status of the meeting.
Annual Increase Reminder
Senate Bill 10-001 changed the amount and timing of the annual increase to PERA benefits, which applies to benefit recipients under both the PERA and DPS benefit structures. Remember, PERA annual increases are paid in July.
Review the information below for details on the amounts of the annual increase.
Retirees of the PERA Benefit Structure who began membership before January 1, 2007, and all DPS Benefit Structure retirees (regardless of when membership began)
- The amount of the annual increase will be 2 percent per year unless PERA has a negative investment year, at which point the annual increase for the following three years will be the lesser of 2 percent or the average of the monthly CPI-W amounts for the preceding calendar year.
- A negative investment year is a year in which PERA investments have a rate of return that is less than zero percent.
Retirees of the PERA benefit structure who began membership on or after January 1, 2007
- The amount of the annual increase will be the lesser of 2 percent or the average of the monthly CPI-W amounts for the prior calendar year. The amount cannot exceed 10 percent of the divisional annual increase reserve.
For more details on the annual increase, review the Annual Increases fact sheet.
New Study Shows Public Employees Prefer DB Plans
Colorado PERA Executive Director Meredith Williams recently reviewed the Colorado PERA portion of a study conducted by the National Institute on Retirement Security (NIRS). The NIRS study found that public employees strongly prefer defined benefit (DB) retirement plans over 401(k)-type defined contribution (DC) individual accounts. In Colorado, where some State employees have a choice of a DB or DC plan, an overwhelming 88 percent chose the DB option.
Download the complete report and presentation.
Colorado PERA Asks Court for Guidance on Responding to Trustee Requests for Member Information
The Colorado Public Employees’ Retirement Association (PERA) today filed its own claim in the lawsuit brought by Colorado State Treasurer Walker Stapleton. PERA’s claim asks the Denver District Court to provide guidance on the circumstances under which PERA can lawfully disclose confidential member information to its Trustees. PERA asks the Court to declare that release of member information to a Trustee is proper when: (1) there is evidence that there is a valid fiduciary purpose; (2) the information requested has a connection to the purpose identified; (3) the cost of production is reasonable; and (4) there are safeguards to protect the confidentiality of the information.
Also, PERA asks the Court to determine that the Board properly concluded that the Treasurer is not entitled to information he requested regarding the top 20 percent of PERA benefit recipients. The Treasurer, despite numerous opportunities to state a valid reason for asking for this information, has never done so. In addition, the Treasurer could not describe any reasonable connection between the information he was requesting and any valid fiduciary purpose.
PERA’s filing came in response to a lawsuit from Colorado State Treasurer Walker Stapleton, who in that capacity also serves as a PERA Trustee.
Colorado law requires PERA to maintain the confidentiality of “all information” in PERA’s member records. The PERA Board sought the advice of attorney John Nixon, a national expert on the fiduciary duties of board members, regarding the request. Nixon advised PERA’s Board of Trustees that the disclosure of such information could violate the confidentiality protections in Colorado law. Nixon also advised the PERA Board that due to the Treasurer’s lack of any valid stated purpose for the request, the Board members would be potentially breaching their fiduciary duty if they were to disclose the information to the Treasurer. After carefully considering Nixon’s opinion, all Trustees except for Stapleton voted to deny the request.
PERA’s formal response to Stapleton’s lawsuit states: “This action provides an opportunity for PERA to obtain guidance regarding circumstances under which it can lawfully disclose information regarding its members and benefit recipients to PERA Trustees.”
PERA has retained Denver attorney John V. McDermott of the law firm Brownstein, Hyatt, Farber, Schreck, LLP, to represent it in the lawsuit. McDermott stated, “The claim of PERA is a constructive attempt to establish the standards to be used in the future in the event of a request by any Trustee.”
PERA’s actuarial consultants review each member and retiree record every year and report the overall results of their analysis to the PERA Board of Trustees and to the General Assembly’s Legislative Audit Committee. Additionally, the State Auditor’s Office hires one of the four largest accounting firms in the world to audit PERA’s financial report and operations every year. This information is publicly available on the State Auditor’s Web site and in PERA’s Comprehensive Annual Financial Report (CAFR).
PERA also has created a fact sheet about benefit payments, including the number of retirees by different ranges of annual benefits. View the PERA Benefit Payments Fact Sheet.
Changes to Colorado PERA Rules
At its September meeting, the PERA Board approved changes to the PERA Rules with an effective date of January 1, 2012.
Changes to Colorado PERA Rules
PERA Benefit Payments Fact Sheet
The topic of benefit payments made to Colorado PERA’s retired members has been in the news recently. To better illustrate this information, we created a Benefits Payments fact sheet that shows that three out of every four PERA retirees receive less than $50,000 a year in retirement.
The Denver Business Journal Profiles Colorado PERA Chief Investment Officer
Colorado PERA Chief Investment Officer Jennifer Paquette was profiled in the September 2, 2011, issue of The Denver Business Journal. Paquette has guided PERA’s investment portfolio since 2003. As the article notes, over the past quarter century, PERA’s investments have produced an average annual rate of return of 9 percent.
View The Denver Business Journal article
Colorado PERA Shareholder Meetings
Similar to town-hall meetings, PERA executives will again travel around the State during the months of September and October to present information to PERA’s “shareholders” and the public about current PERA issues as well as review PERA’s financial position. After a briefing about PERA, a question-and-answer session will follow.
View the 2011 Shareholder Meeting Schedule
Colorado PERA Board Action, August 31, 2011
On June 3, 2011, Colorado PERA received a written request from State Treasurer and Trustee Walker Stapleton. Trustee Stapleton requested information regarding individual records of the top 20 percent of PERA retirees based on benefit level.
On June 17, 2011, the Board met to discuss Trustee Stapleton’s request. Following extensive discussion, the Board voted to retain an outside fiduciary counsel to provide an opinion regarding Trustee Stapleton’s request. At the meeting, it was determined that the Executive Committee of the PERA Board would select the outside counsel after receiving input from other members of the Board. The Executive Committee subsequently retained John A. Nixon, Esq. of the law firm of Duane Morris L.L.P. to provide a legal opinion regarding Trustee Stapleton’s request.
The PERA Board met on Wednesday, August 31, 2011, to further consider Trustee Stapleton’s request. At that meeting, the Board voted to waive the attorney-client privilege related to the written opinion and directed staff not to provide the member information requested by Trustee Stapleton in his June 3, 2011, letter.
PERA takes very seriously the responsibility of maintaining the confidential information of our 478,000 members. PERA also believes that it must strictly abide by state laws and always respect its important fiduciary responsibilities.Response to Memorial Health System
It’s been reported that Memorial Health System in Colorado Springs is seeking to sue PERA over a disputed amount required to terminate participation in PERA.
PERA operates under Colorado State statutes, which provide guidance on how a local government employer such as Memorial can withdraw its employees from PERA and how the cost is calculated for doing so. PERA must follow the law and cannot negotiate this cost with Memorial because every dollar in reduction from the statutory calculation will have to be paid by the other participating employers.
PERA’s actuaries have produced cost calculations at Memorial’s request using the 2009 year-end financial statements and again using 2010 year-end financial statements. Until the date that Memorial’s employees would cease being covered by PERA is determined, a final amount cannot be calculated. Market volatility and demographic changes up to the date when Memorial's employees would no longer be covered by PERA will also impact the final number.
If Memorial were to leave PERA and not fully pay the costs of the benefits earned by its current and former employees, the other public employers in the Local Government Division would see an increase in their respective liabilities to make up the shortfall. Presently, Memorial claims that it should not pay any amount to address unfunded liabilities. If this were to occur, based on the statutory calculation method using 2010 year-end financials, the liabilities shifting to the five largest remaining employers in the Local Government Division would be:
| Colorado Springs-Public Utilities | $48,875,224 |
| Boulder County Government | $35,042,788 |
| City of Colorado Springs | $28,014,469 |
| City of Boulder | $22,040,190 |
City of Pueblo |
$6,386,566 |
PERA’s responsibility is to administer the plan as called for in the statute and prevent one employer from shifting its pension costs to others.
PERA believes that the position it has taken throughout this process is the approach required by statute and will be sustained by the court if it is litigated.
Colorado PERA Adds Additional Live Webinars on Upcoming 401(k), 457, and DC Plans' Transition
Colorado PERA has added six additional live Webinars on the upcoming 401(k), 457, and DC Plans' transition. You can register for one of the live Webinars if you are unable to attend a meeting held throughout the State.
Register for Live Webinars on Upcoming 401(k), 457, and DC Plans' Transition
You can now register for one of the live Webinars on the upcoming 401(k), 457, and DC Plans' transition. You should consider viewing a Webinar from your computer if you are unable to attend a meeting held throughout the State. In the coming weeks PERA will also be posting a recorded version of a Webinar that you will be able to view on demand.
Colorado PERA Testifies at Congressional Financial Services Committee
Gregory W. Smith, Colorado PERA Chief Operating Officer and General Counsel, testified at a hearing in Washington, D.C., on Wednesday, July 27, 2011. The hearing was held by a subcommittee of the U.S. House Committee on Financial Services. The Subcommittee on Oversight and Investigations addressed “Oversight of the Credit Rating Agencies Post Dodd-Frank.”
During his testimony, Smith told House lawmakers, “Hasty efforts to eliminate credit ratings prior to the development of effective substitute tools increases risk to investors.”
Below are links to the entire testimony.
Written Testimony
Streaming Video (will link to Subcommittee's Web site)
Frequently Asked Questions for the 401(k), 457, and DC Plans' Transition Now Available
PERA has developed a Frequently Asked Questions (FAQ) fact sheet with general questions related to the upcoming 401(k), 457, and DC Plans' transition. The FAQ is now available on PERA’s Web site.
Colorado PERA Improves the PERA 401(k), 457, and DC Plans
The Colorado PERA Board of Trustees approved extensive improvements to the PERA 401(k), 457, and DC (Defined Contribution) plans and will be consolidating the plans under a single recordkeeper effective October 1, 2011. The 401(k) and 457 plans will be rebranded as the PERAPlus programs.
The changes include providing participants access to the custom, easy-to-understand, and diversified PERAdvantage investment options, along with the opportunity to seek investment advice at no additional cost.
Participants will also have access to investment professionals, who will manage their accounts, and the ability to invest in a wider universe of options by using a self-directed brokerage account. (Previously, these options were only available to participants of PERA’s 457 Plan.)
Following an exhaustive search process, the PERA Board has selected ING as the recordkeeper for the PERAPlus program and the PERA DC Plan. PERA expects to realize significant savings through moving to a single recordkeeper. ING is currently the recordkeeper for the 401(k) and DC plans.
The current recordkeeper for the PERA 457 Plan, Great-West Retirement Services will continue its relationship with PERA by offering a stable value fund as part of the PERAdvantage investment line-up.
Also included in the PERAdvantage investment line-up will be six primary investment vehicles based on asset classes, 10 target retirement date funds, and a balanced fund that screens for various social causes.
PERA is pleased to make available a more comprehensive array of fund offerings to assist PERA members in achieving their retirement savings goals.
Current assets in the PERA 401(k) Plan are $1.9 billion, with 73,620 participants. Assets in the PERA 457 Plan are $473.5 million, with 18,182 participants. Assets in the PERA DC Plan are $53.2 million, with 3,503 participants.
Court Upholds Bipartisan Legislation that Put Colorado PERA Back on Track to Financial Stability
A Denver District Court judge has granted the motion by the Colorado Public Employees’ Retirement Association (PERA) and the State of Colorado to dismiss the lawsuit brought against PERA as a result of the enactment of last year’s Senate Bill 1, the comprehensive reform bill. Attorney General John Suthers represented the State of Colorado and the law firm of Reilly Pozner, LLP, represented PERA in this matter.
A group of PERA retirees filed suit days after the legislation was signed into law, claiming that their constitutional right to receive an annual increase or Cost of Living Adjustment (COLA) had been impaired by the passage of landmark legislation that returned PERA to long-term sustainability.
In his ruling released Wednesday, June 29, Judge Robert S. Hyatt wrote: “This Court finds, based upon statutory provisions of the last 40 years, as well as legislative history and DPS [Denver Public Schools] plan language, that the General Assembly’s most recent change to retiree COLA does not alter the fundamental mechanism for payment of pension benefits for PERA retirees…..For 40 years the COLA formula has been subject to significant change without ever unconstitutionally altering the base pension payment to retirees.” For more information on the ruling issued by District Court Judge Robert S. Hyatt, please view the PDF of the Order in its entirety.
Meredith Williams, PERA Executive Director, said, “We are pleased with the Court’s ruling. Senate Bill 1 was painful but necessary to make sure that PERA would be able to pay benefits in perpetuity. It put PERA on track to be funded within 30 years, the same amount of time as it takes to pay off the typical home mortgage.”
“SB 1 was a bipartisan bill based on recommendations from the PERA Board of Trustees. It required shared sacrifice from PERA members, retirees, and public employers and it was the first comprehensive legislative response to the global economic crisis by any public retirement fund in the nation,” said Gregory W. Smith, PERA Chief Operating Officer and General Counsel.
Senate President Brandon Shaffer and then-Senate Minority Leader Josh Penry co-sponsored the landmark legislation in 2010.
“Equity in PERA for all employees requires a shared sacrifice to assure the financial stability of the system,” said Shaffer, a Democrat. “Senate Bill 1 provides for both equity and stability. I am pleased the court agreed."
“Legislators from both sides of the aisle understood that we had to act decisively to put PERA back on track to financial security,” said former Sen. Josh Penry, who was the Colorado Senate’s top Republican when he co-sponsored SB 1. “It’s encouraging that the Court has upheld this comprehensive solution and now it just needs time to work.”
In 2010, PERA earned 14 percent on its investments. PERA ended 2010 with $38.7 billion in assets in the trust funds that support its defined-benefit plans.
The plaintiffs can appeal the order within 45 days, subject to potential extensions depending on additional motions in the trial court.
Colorado PERA Investment Returns Surpass Assumptions
The Colorado PERA investment returns for 2010 exceeded actuarial assumptions. The plan earned a 14.0 percent return on investments and ended 2010 with $38.7 billion in defined benefit assets.
“We were pleased with the results in 2010,” said Meredith Williams, Colorado PERA’s Executive Director. “PERA remains committed to managing a healthy pension fund that will meet the financial needs of Colorado’s public employees for generations to come.”
All PERA investments had positive returns. Global stocks returned 15.4 percent; fixed income returned 7.8 percent; alternatives returned 20.9 percent; and real estate returned 16.7 percent and the opportunity fund returned 10.6 percent.
Through 2010, PERA’s annual investment returns average 9.0 percent over the last 25 years, exceeding the 8.0 percent investment rate of return assumption established by the Board of Trustees. Investment return is 59 percent of the source of dollars in the PERA trust funds, with 19 percent coming from member contributions and 18 percent from employer contributions. An additional 4 percent comes from plan transfers which includes the Denver Public Schools Retirement System merger.
“PERA is the ultimate long-term investor. We are investing assets now for public employees who won’t retire for decades. Therefore, it’s especially encouraging to see that PERA’s rate of return over the past quarter century remains strong,” Williams said.
PERA’s full Comprehensive Annual Financial Report is available.
Colorado PERA Announces Board Election Results
Colorado PERA members elected Rochelle Logan and Timothy M. O’Brien to the 16-member Board of Trustees.
Logan will serve a three-year term in the Local Government Division seat. She was appointed to that seat in early 2011 to fill a vacancy. O’Brien was elected to a Retiree Division seat and will serve a four-year term.
In the Local Government Division, a total of 1,797 votes were cast. Logan received 1,070 or 59.5 percent of votes cast. In the Retiree Division, a total of 11,059 votes were cast. O’Brien received 3,618 or 32.7 percent of votes cast.
Logan is the Associate Director of Support Services for Douglas County Libraries. O’Brien is the retired Colorado State Auditor from the Office of the State Auditor.
By State law, the management of the Public Employees’ Retirement Association is vested in the Board of Trustees while the General Assembly sets contribution rates and benefit levels.
The Board is composed of 16 Trustees, including three Governor-appointed Trustees, a non-voting ex officio member from the Denver Public Schools, and the State Treasurer who serves as a ex officio voting member of the Board.
Update on Lawsuit Regarding Senate Bill 10-001 (SB 10-001)
Shortly after SB 10-001 was signed into law, a class-action lawsuit was filed in Denver District Court challenging the constitutionality of the bill. The plaintiffs, who claim to be acting on behalf of a class of individuals, were alleging that a portion of SB 10-001, which modifies the annual increase payable to existing Colorado PERA retirees, was unconstitutional.
On June 20, 2011, the Court entered a significant ruling that denied the plaintiffs' motion for summary judgment.
For more information on the ruling issued by District Court Judge Robert S. Hyatt, please view the PDF of the Order in its entirety.
Election Ballots Mailed
Ballots for the 2011 Colorado PERA Board of Trustees election were mailed on May 2, 2011, to retirees in the State, Local Government, and Judicial Divisions, as well as to active members in the Local Government Division.
If you lose or do not receive a ballot, the deadline for requesting a duplicate ballot is May 23, 2011. Such requests must be in writing and directed to the Colorado PERA Director of Internal Audit at 1301 Pennsylvania Street, Denver, CO 80203. Written requests must include name, address, Social Security number, and reason for the request.
Ballots must be postmarked by May 31, 2011.
Colorado PERA Hires Two New Directors
Colorado PERA has hired Matt Carroll as the Director of Benefit Services and Angela Setter as the Director of Human Resources.
Carroll was previously the Manager of PERA’s Employer Relations team. He has worked at PERA for over four years. As Director of Benefit Services, Carroll will supervise numerous aspects of the administration of PERA’s defined benefit program, and related services including PERA’s defined contribution plans.
Setter was previously the Benefits Department Senior Trainer. She has worked at PERA for three years. As Director of Human Resources, Setter will be responsible for developing, recommending, implementing, and maintaining human resources policies and programs.
Both Carroll and Setter replaced directors who retired earlier this year.
Colorado PERA Testifies at Congressional Hearing on Derivative Oversight
On April 12, 2011, Colorado PERA Chief Investment Officer Jennifer Paquette testified before a congressional committee about federal regulation of derivatives, a category of financial instruments that includes futures.
The Senate Committee on Banking, Housing and Veterans Affairs hearing addressed “Building the New Derivatives Regulatory Framework” in the oversight of the Dodd-Frank Act, the financial reform law passed by Congress in response to the economic collapse.
One of the goals of the Dodd-Frank Act is to improve regulation of the over-the-counter derivatives market in response to trades which contributed to the 2008 crisis.
PERA invests $39 billion in assets on behalf of almost half a million former and current Colorado public employees. While PERA’s derivatives investments are modest in size, it does use derivatives to mitigate risks and enhance diversification in its portfolio. PERA’s investment returns help it limit the burden of pension contributions from governmental entities and public employees.
PERA periodically testifies before Congress, providing a voice for its 474,000 members and retirees. Paquette, who has been PERA’s Chief Investment Officer for eight years, said, “Colorado PERA’s team of investment professionals manage complex portfolios internally and oversee external investment managers. Like many of our peers, our investment staffs include those that have earned professional designations, are well educated and have many years of experience in the markets. We are knowledgeable about using derivatives to hedge certain investments and mitigate risk. We believe some modifications to the proposed rule as discussed in the letter [included in written testimony] would be beneficial to the retirement security of our members.”
Watch the hearing.
Colorado PERA Adds New Web Pages
Colorado PERA has recently added two new pages to its Web site: Information on Benefit Payments and PERA on the Issues.
Information on Benefit Payments is updated monthly to include information pertinent to retirees who receive a benefit check.
PERA on the Issues is designed to respond to issues that involve the public pension community and to provide information on the topics frequently covered in the news.
Colorado PERA Reschedules Burlington Benefit Information Meeting
The Colorado PERA Benefit Information Meeting that was originally scheduled on February 8 in Burlington has been rescheduled for March 30, 2011, at the City of Burlington Community Center.
Rescheduled Meeting Details:
Benefit Information Meeting
March 30, 2011
5:00 p.m. – 7:00 p.m.
340 S. 14th Street
Burlington, Colorado
This meeting replaces the February 8 meeting scheduled at the City of Burlington Community Center that was canceled due to inclement weather and severe driving conditions.
Benefit Information Meetings are designed to provide an overview of the PERA defined benefit plan for members at any stage of their career. The session will cover information related to benefit calculations, annual increases, possible Social Security benefit reductions, working after retirement, purchasing service credit, and other topics.
We regret any inconvenience caused by the earlier cancellation.
For further details or information, contact Dennis Gatlin, Colorado PERA Director of Field Education Services at 303-863-3788 or dgatlin@copera.org.
Colorado PERA Reschedules Durango Benefit Information Meeting and 401(k) Meeting
The Colorado PERA Benefit Information Meeting and 401(k) Meeting that were originally scheduled on February 8 in Durango have been rescheduled for March 15, 2011, at the Durango School District Board Room.
Rescheduled Meeting Details:
Benefit Information Meeting
March 15, 2011
5:00 p.m. – 7:00 p.m.
401(k) Meeting
March 15, 2011
7:30 p.m. – 8:30 p.m.
201 East 12th St.
Durango, CO 81301
These meetings replace the February 8 meetings at the Durango School District Board Room that were canceled due to inclement weather and severe driving conditions.
Benefit Information Meetings are designed to provide an overview of the PERA defined benefit plan for members at any stage of their careers. The session will cover information related to benefit calculations, annual increases, possible Social Security benefit reductions, working after retirement, purchasing service credit, and other topics.
401(k) Meetings provide a general overview of the Colorado PERA 401(k) Plan. Discussion topics include deferral limits, funds available, administrative fees, loans, rollovers, distribution times and choices, taxation, and penalties.
We regret any inconvenience caused by the earlier cancellation.
For further details or information, contact Dennis Gatlin, Colorado PERA Director of Field Education Services at 303-863-3788 or dgatlin@copera.org.
Colorado PERA Reschedules Cortez Retirement Process Meeting and PERACare Information Meeting
The Colorado PERA Retirement Process Meeting and PERACare Information Meeting that were originally scheduled on February 9 in Cortez have been rescheduled for March 16, 2011, at the Cortez Conference Center.
Rescheduled Meeting Details:
Retirement Process Meeting
March 16, 2011
4:30 p.m. – 6:00 p.m.
PERACare Information Meeting
March 16, 2011
6:30 p.m. – 8:00 p.m.
2121 East Main St.
Cortez, CO 81321
These meetings replace the February 9 meetings scheduled at the Cortez Conference Center that were canceled due to inclement weather and severe driving conditions.
Retirement Process Meetings are designed for members who plan to retire within the next six months. This meeting will review the fundamentals of PERA benefits and help members learn about required PERA retirement forms and post-retirement issues. (Members are encouraged to attend a Benefit Information Meeting prior to attending a Retirement Process Meeting.)
PERACare Information Meetings are designed for members who are near retirement and researching health care options. Members attending this meeting will learn about the PERACare Health Benefits Program, including eligibility, pre-Medicare and Medicare plan choices, prescription benefits and other topics. (Members are encouraged to attend a Benefit Information Meeting prior to attending a PERACare Information Meeting.)
We regret any inconvenience caused by the earlier cancellation.
For further details or information, contact Dennis Gatlin, Colorado PERA Director of Field Education Services at 303-863-3788 or dgatlin@copera.org.
Colorado PERA Cancels Meetings in Burlington
Colorado PERA's meetings scheduled for February 8, 2011, in Burlington are canceled due to an ongoing winter storm between Denver and the eastern Colorado border.
Canceled Meetings:
February 8, 2011
Burlington
Group Workshop, 4:30 p.m. – 6:00 p.m.
Benefit Information Meeting, 6:30 p.m. – 8:30 p.m.
The canceled Burlington meetings were scheduled at the City of Burlington Community Center, 340 S. 14th St., Burlington
The decision to cancel the meetings was made in the best interest of the safety of Colorado PERA members and staff traveling to Burlington. Road conditions are extremely hazardous due to snow, ice, and high winds and not expected to allow safe travel during the next 24 hours.
We regret any inconvenience that this may cause PERA members. Efforts will be made to reschedule the sessions in the next several weeks. Please check PERA’s Web site for further updates.
For additional details or information, contact Dennis Gatlin, Colorado PERA Director of Field Education Services at 303-863-3788 or dgatlin@copera.org.
Colorado PERA Cancels Meetings in Durango and Cortez
Colorado PERA's meetings scheduled for February 8, 2011, in Durango, and February 9, 2011, in Cortez are canceled due to a forecasted winter storm between Denver and southwestern Colorado locations.
Canceled Meetings:
February 8, 2011
Durango
Benefit Information Meeting, 5:00 p.m. - 7:00 p.m.
401(k) Meeting, 7:30 p.m. - 8:30 p.m.
The canceled Durango meetings were scheduled at the Durango School District Board Room, 201 East 12th Street, Durango.
February 9, 2011
Cortez
Retirement Process Meeting, 4:30 p.m. - 6:00 p.m.
PERACare Information Meeting, 6:30 p.m. - 8:00 p.m.
The canceled Cortez meetings were scheduled at the Cortez Conference Center, 2121 East Main Street, Cortez.
The decision to cancel the meetings was made in the best interest of the safety of Colorado PERA members and staff who would have to travel to Durango and Cortez. Road conditions are extremely hazardous due to snow pack, ice, and high winds and not expected to allow safe travel during the next 24 hours.
We regret any inconvenience that this may cause PERA members.
For further details or information, contact Dennis Gatlin, Colorado PERA Director of Field Education Services at 303-863-3788 or dgatlin@copera.org.
Colorado PERA Reschedules Craig Benefit Information Meeting—New Location
The Colorado PERA Benefit Information Meeting in Craig that was originally scheduled in January has been rescheduled for February 28, 2011, at the Craig Middle School.
Rescheduled Meeting Details:
Benefit Information Meeting
February 28, 2011; 4:30 p.m. – 6:30 p.m.
Craig Middle School Auditorium (NEW LOCATION)
915 Yampa Avenue
Craig, CO 81625
This meeting replaces the January 19, 2011, meeting at the Hampton Inn that was canceled due to inclement weather and severe driving conditions.
Benefit Information Meetings are designed to provide an overview of the PERA defined benefit plan for members at any stage of their careers. The session will cover information related to benefit calculations, annual increases, possible Social Security benefit reductions, working after retirement, purchasing service credit, and other topics.
We regret any inconvenience caused by the earlier cancellation.
For further details or information, contact Dennis Gatlin, Colorado PERA Director of Field Education Services Division at 303-863-3788 or dgatlin@copera.org.
Colorado PERA Board Elects New Chair and Vice Chair
At its January meeting, the Colorado PERA Board of Trustees elected Carole Wright as the new Chair and Maryann Motza as Vice Chair.
Wright is a retired teacher from Aurora Public Schools. She has served on the Board since 2005. She previously served on the Board from 1993-2000. Elected by retirees, her current term expires June 30, 2013.
Motza is the Social Security administrator for the State of Colorado. She has been a member of the Board of Trustees since 2005 and is elected by State employees. Her current term expires June 30, 2013.
The Chair and Vice Chair serve two-year terms and the Chair cannot serve more than two consecutive terms in that position. The Board is composed of 16 Trustees, including three Governor-appointed Trustees, the State Treasurer who serves as a voting ex officio member, and an appointed non-voting ex officio member of the Denver Public Schools Division.
Colorado PERA Appoints New Trustee
The Colorado PERA Board of Trustees appointed Rochelle Logan to a vacant seat in the Local Government Division of the Board.
Logan is associate director of support services for Douglas County Libraries. Her term will expire on June 30, 2011. She takes over the seat formerly held by Mark Anderson, who retired in 2010.
By State law, the management of the Public Employees’ Retirement Association is vested in the Board of Trustees while the General Assembly sets contribution rates and benefit levels.
The Board is composed of 16 Trustees, including three Governor-appointed Trustees and the State Treasurer who serves as a voting ex officio member of the Board.
Changes to Tax Withholding Tables
New federal tax withholding tables went into effect with the January benefit payments to benefit recipients under both the PERA and DPS benefit structures. The new tables were prescribed by the Internal Revenue Service (IRS) as a result of the expiring “Making Work Pay” tax credit.
As you may recall, two years ago, President Obama signed into law the “Making Work Pay” tax credit, which provided a tax savings on income from gainful employment, but not retirement income. At that time (April 2009), your monthly tax withholdings were lowered in accordance with the new tax tables unless you submitted a new PERA Withholding Preference Form that increased your withholding to offset the changes to the tax tables. PERA notified benefit recipients about this change in the March 2009 Retiree Report.
Since this tax credit expired on January 1, 2011, the IRS had to adjust the tax tables accordingly which may have increased your federal tax withholding. PERA encourages all benefit recipients to check your federal tax withholdings and determine if you need to modify the amounts being withheld.
Please note that PERA notified retirees and benefit recipients in the December 2010 Retiree Update that January 2011 PERA benefit payments would reflect the 2011 tax tables used to calculate withholdings. At the time the Retiree Update went to print, PERA was unaware of the extent to which the tax tables would change in January.
PERA regrets any confusion this has caused retirees and benefit recipients.
For More Information
- Review the Taxes on PERA Benefits booklet, which also includes a PERA Withholding Preference Form to change your withholdings from your PERA benefit.
- Change your withholdings online through the secured pages of the PERA Web site if you have a PERA PIN.
Colorado PERA Cancels January 19, 2011, Meetings in Craig
Colorado PERA’s meetings scheduled for January 19, 2011, in Craig are canceled due to poor driving conditions between Rifle and Craig.
Meetings Canceled:
Group Workshop, 4:30 p.m. – 6:00 p.m.
Benefit Information Meeting, 6:30 p.m.
The canceled meetings were scheduled at the Hampton Inn & Suites, 377 Cedar Court in Craig.
The decision to cancel the meetings was made in the best interest of the safety of Colorado PERA members and staff who would have to travel to Craig. Local law enforcement officials are encouraging drivers not to proceed on Colorado 13 between Rifle and Craig due to icy road conditions. Driving conditions are not expected to improve.
We regret any inconvenience that this may cause PERA members.
For further details or information, contact Dennis Gatlin, Colorado PERA Director of Field Education Services at 303-863-3788 or by e-mail at dgatlin@copera.org.
Colorado PERA Cancels January 18, 2011, Meetings in Steamboat Springs
Colorado PERA's meetings scheduled for January 18, 2011, in Steamboat Springs are canceled due to poor driving conditions.
Meetings Canceled:
Group Workshop, 4:30 p.m. – 6:00 p.m.
401(k) Meeting, 6:30 p.m.
The canceled meetings were scheduled at the Hampton Inn & Suites, Yampa Valley Room, 725 South Lincoln Avenue, Steamboat Springs.
The decision to cancel the meetings was made in the best interest of the safety of Colorado PERA members and staff traveling to Steamboat Springs. Drivers on Interstate 70 westbound between Georgetown and Silverthorne will encounter snow packed and icy road conditions along with blowing snow. While conditions are expected to improve later in the day, travel remains difficult.
We regret any inconvenience this may cause PERA members.
For further details or information, contact Dennis Gatlin, Colorado PERA Director of Field Education Services at 303-863-3788 or by e-mail at dgatlin@copera.org.
Colorado PERA Responds to Questions on RFP for 401(k), 401(a), and 457 Plan Administration and Recordkeeping Services
Colorado PERA is providing answers to questions asked by potential bidders to all interested respondents.
RFP Vendor Questions and Answers