At Colorado PERA, we invest for one purpose: To provide retirement benefits to PERA members for generations to come.
It’s not just our mission, it’s our passion. And it’s the reason we prioritize financial value – not personal or political values – in our investment decisions.
Fiduciary duty
PERA serves more than 670,000 current and former public employees who have worked hard to make our Colorado communities better places to live. Each of those members counts on PERA to provide a retirement benefit they cannot outlive.
The PERA Board and staff have a Fiduciary duty to those members. That means we’re required by law to act solely in the interest of members and benefit recipients, and we must manage the trust funds only for their financial benefit. We make every investment decision with that duty in mind.
Each PERA member is unique, with their own personal values that guide them. It would be impossible to invest based on personal or political values of our individual members or stakeholders. Our Fiduciary duty demands that we do what’s right for the membership as a whole, and that means focusing on financial value.
Prioritizing financial value
Our sole investment goal is to pursue the best risk-adjusted returns for our members. That means when we’re researching a possible investment opportunity or assessing an asset we already hold, our focus is on that investment’s ability to earn money over the long term.
We sometimes hear from stakeholders and others who want us to invest in some segments of the market or divest – sell our investments – from others based on their individual preferences or political beliefs.
That would be contrary to our mission and our Fiduciary duty. Our approach involves finding companies, properties and investment funds that we believe will be competitive over time, allowing them to be profitable and generate returns to the portfolio.
Investing based on the financial interest of the whole PERA membership is our Fiduciary duty, and we take it seriously because our hard-working members depend on us for their financial future.
Learn more about Investment Stewardship:
- Investment Stewardship Report
- Digital Snapshot
- Video Library: Investment Stewardship
- Asset Classes Explained
Trust fundA fund in which money and/or other assets are held and managed by trustees on behalf of plan participants. PERA maintains trust funds for each of its Defined Benefit Plan divisions (State, Local Government, School, Denver Public Schools, and Judicial).StewardshipThe practice of overseeing or managing something entrusted to one’s care. PERA’s approach to investment stewardship is focused on ensuring the financial sustainability of the fund that pays benefits to retirees and beneficiaries.StewardshipThe practice of overseeing or managing something entrusted to one’s care. PERA’s approach to investment stewardship is focused on ensuring the financial sustainability of the fund that pays benefits to retirees and beneficiaries.FiduciaryA person who manages money on someone else’s behalf and who has a sworn responsibility to manage those funds in the best interest of the client. FiduciaryA person who manages money on someone else’s behalf and who has a sworn responsibility to manage those funds in the best interest of the client.
I appreciate PERA’s focus & priorities. Each of us has an option to invest our own funds however we want, but we wouldn’t be able to do that if PERA didn’t focus on remaining financially viable and stable.
Thank you PERA, I agree. There always seem to be a few social justice warriors in the state capitol trying to force their beliefs onto everyone else. Keep up the good work PERA.
Agreed, Dennis. Thank you.
As a retiree, I am grateful to have a PERA pension and appreciate all the hard work you do on our behalf. I also appreciate how you keep us informed and open line of communications. Thank you and keep up the great job you all are doing!
Thank you for sharing this information. I appreciate having complete confidence my investment is being managed only by sensible, financial goal focused individuals who aren’t clouded by personal or political motives when choosing the best investment strategies. To do otherwise would be financially irresponsible. A great communication, thanks for sharing.
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Thank you, PERA, for keeping the financial security of your membership as your main priority. We so appreciate you putting fiduciary responsibilities ahead of personal or political issues.
Big mistake. Being “ politically blind” means you are exonerated when investing in anti teacher anti student anti education anti union funds. We can make a lot of money investing in funds that have supported our life’s work. We can do better.
Huh?
While , I respect your opinion, I honestly disagree. There is a growing body of research that shows that politically motivated investing like environmental and social justice focused investments do not meet the investment return goals that we need to sustain PERA for decades to come. I’m very proud of what PERA is doing as it is in the best interest of everyone. And I don’t see a single anti-education thing in the portfolio.
Respectfully.
This is all good except that PERA has let the State of Colorado get away with financial murder. The state is doing very well but PaeRA employees are only getting 1% raises. As a window who lost approximately 1/3 of he Social Security payments due to WHEP, another rip off, I am starting to have trouble paying my Taxes, food and HOA. Everything is going up except for PERA. I really feel that the board must have gotten payola for accepting the deal that they did. And they stay in the legislature’s pockets by not fighting for us now. Fed up.
It sure makes you wonder. PERA let the state lock us into a max COLA of 1% (we don’t even call it COLA anymore, but an Adjustment) during a time of low inflation. After that, if you will recall, PERA changed the overall Mission Statement to a group of vague phrases.
As far as being financially rewarded, well, notice that the PERA reps. left or better yet, took a leave of absence.
What was the story behind Ron Baker’s leaving?
PERA just does not seem get it. The majority of us are asking for a decent COLA. It’s our top priority. Do the employees at PERA only get 1% raises? I doubt it. You can do a lot better PERA.
Please continue being “politically blind” in your investment philosophy. Keep using your current results only driven approach.
Well said and so true. Keep investing responsibly. Kudos
Is there any action in Congress to repeal the very unfair WEP (windfall deduction from Social Security)?
Hi Dale, yes, lawmakers in Congress have introduced multiple bills to modify or repeal WEP and GPO. We posted an update earlier this summer here: https://peraontheissues.com/an-update-on-2023-wep-gpo-legislation/
Thank you, PERA. I am glad that you recognize your fiduciary duty to the membership to maximize return on investment by smart investing strategies, rather than caving to the political whim of the moment.
VALUES?
I’d value a little more perspective in this anti-ESG polemic, e.g., exposing the politicians that raid pension funds, under-funding employer contributions while expanding benefits (early retirement) without making adequate appropriations, or addressing PERA’s use of “private equity” (with it secret terms and well-known high costs).
Yes, – ESG investment considerations may be contrary to a “fiduciary duty” to prioritize members’ financial benefit over political or personal agendas, but where was that “fiduciary duty,” when the politicians eliminated COLAs and diminished benefits for retirees? “Fiduciary duty” does not square with retirees shouldering the burden of promoting fund solvency by forgoing increases (1% annual increases are in fact a cut when inflation is considered).
It’s pretty clear from this article that PERA and politicians beholden to the fossil fuel industry don’t like being told how to invest members’ pensions; but PERA didn’t object to members losing benefits; so, future articles might be lighter on the “fiduciary-duty” stuff and heavier on lobbying all lawmakers to make appropriate employer contributions.
Politically Blind But Not Mute?
PERA Board & Staff (PERA B.S.) are vocal with like-minded politicians and investment firms when their ox is gored, but PERA B.S. is silent (or complicit) when member benefits are cut, or employer contribution rates get lowered only to be hiked later after creating unnecessary shortages from which to recover. Additionally, all citizens suffer from higher government labor costs and diminished recruitment and retention incentives when pension promises are broken, and public service devalued.
Will retirees ever enjoy reasonable annual increases if PERA Investments are protected from the political and personal agendas of ESG policies? That’s not likely to happen any more than politicians will stop raiding our pension funds because PERA B.S. scared them into keeping their hands out of the PERA cookie jar.
Perhaps the folks who write these articles are unfamiliar with investment and divestment statutes* that permit or restrict PERA board policy (it also seems these authors fail to grasp the standard of conduct, legally required, of trustees acting as fiduciaries only to serve the interests of its members). So, what is wrong with divesting from industries that threaten the environment, and impose clean-up and health costs upon the public? Closer to members’ interests, what about prohibiting investing with entities dealing in private prisons or schools (with dubious results for taxpayers). To go even further, how can PERA B.S. support defined contribution (DC) plans that abrogate their fiduciary duties as well as their control and authority over investing, which is purportedly threatened by the perceived political and personal values which this article assails? Railing against ESG, and/or politicians who favor ESG, seems rather disingenuous especially when PERA B.S. supported cutting benefits for the fictitious goal of preserving benefits for generations to come, while utilizing “private equity” with its secrecy and suspicious costs?
Maybe it’s PERA B.S. that has political and personal agendas by repudiating those who tell them how to invest with their own brand of self-serving rhetoric, i.e., lawmakers hurt beneficiaries by restricting investment opportunities; but the truth is that PERA B.S., along with most lawmakers, could care less about beneficiaries; and instead, both the politicians and PERA B.S. are more concerned about maintaining their own power and profiting from state pension funds.
In closing, the solution might be to go ahead and let the General Assembly make investment and divestment directives, just as long what would have happened otherwise is tracked, so if there is a loss then PERA B.S. can demand the legislature make a special appropriation to pay for politicizing state pensions (I know, demanding the crooks under the gold dome be responsible for their actions is almost as crazy as expecting PERA B.S. to actually care where our money goes).
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FOOTNOTE: The permissive and restive sections of law controlling investments can be found at 24-51-206 and 24-51.8-201, C.R.S.
“The PERA Board and staff have a fiduciary duty to those members. That means we’re required by law to act solely in the interest of members and benefit recipients, and we must manage the trust funds only for their financial benefit.”
In what Universe is a fiduciary obligation satisfied by the stripping of earned benefits that were an integral part of our conditions of retirement??
How is it my best interest to have several years of 0% increase, followed by a few years of 1% adjustment. Adjustment for what?!! Certainly not cost of living!
Purchasing power of the benefit continues to spiral downward. So even the USE of the term ‘fiduciary’ , when existing on an ever-shrinking benefit. PERA can’t control inflation, but does have the fiduciary duty to minimize the impact on retirees by supporting a reasonable COLA.
Yes, your Fiduciary duty trumps all political fads and anyone’s personal views. The problem with those fads and views is that they are mostly generated by media and politicians, bearing little resemblance to reality. Examples: Most “green” ideas are really “pseudo-green” including: electric cars (hybrids are cleaner and more efficient than electric grid power); windmills and solar panels everywhere (good in Colorado, but wasteful in many climates); and anti-nuclear power (a total result of mindless propaganda). These views are “blowing in the wind” and will change.