Colorado PERA’s Board of Trustees met virtually on Friday, November 20. The Board elected a new Chairman and Vice-Chairman and voted to maintain the 3% interest rate for member accounts, among other agenda items.
PERA Board Officer Elections
Colorado PERA’s Board of Trustees elected Marcus Pennell to be the Board’s next Chairman. Pennell, a physics teacher in Jefferson County Public Schools, is currently the Board’s Vice Chairman.
The outgoing Chairman, Timothy M. O’Brien, has been a PERA Board member since 2011. O’Brien has been the Denver City Auditor since 2015 and was the Colorado State Auditor from 1984 to 1995.
The Board elected David Hall Vice Chairman, filling the seat vacated by Pennell. Hall is a Sergeant with the Colorado State Patrol.
Pennell and Hall assume their new leadership roles in January 2021.
Member Interest Rate
For many PERA retirees, account balances don’t play a significant role in their retirements. For example, account balances do not determine the amount of most PERA monthly benefits. In fact, most retirees receive the balance of their account through benefit payments about five years into retirement.
But account balances do play a more important role for some PERA members. For these members, the interest added to their account increases the value of being a PERA member. At the meeting, the Board voted to maintain the 3% interest rate that member accounts earn.
The following scenarios show how the interest rate on member accounts can affect PERA members:
- Refunds | Some PERA members choose to refund their account when they leave employment in lieu of a monthly benefit in retirement. Members who refund their account receive their contributions plus interest. In some cases, they also receive a match.
- Retiring with less than 5 years of service | PERA members who do not have five years of service credit are still eligible to receive a monthly benefit in retirement. However, this benefit is not calculated using the familiar formula that includes service credit, age, and highest average salary. Instead, the money purchase calculation determines the amount. This calculation does use a member’s account balance along with life expectancy at the time of retirement.
- Moving to a job outside of PERA | Not every PERA member remains in public employment for their entire career. Those who leave before retirement age can leave their account at PERA and still receive a monthly benefit when they become eligible later in life. One potential downside: the purchasing power of a static highest average salary decreases over time—the result of inflation. To help offset this phenomenon, PERA calculates what the benefit is using the money purchase calculation, described above. The retiree receives the larger of the two calculations.
- Survivor benefits | Survivor benefits provide income for qualified survivors if a PERA member dies before retirement. If a member dies but does not have any qualified survivors, the account balance goes to the named beneficiaries the member chose.
Other Agenda Items
During the meeting, the Board adopted new mission and vision statements, which are covered in another PERA On The Issues story. They also reviewed and adopted updated actuarial assumptions, which will be covered in a future PERA On The Issues newsletter.
Money purchaseThe process of converting one type of retirement account to another, such as converting an account balance to an annuity to receive regular lifetime monthly income.Actuarial assumptionData such as demographics, mortality rates, and investment returns that retirement plans use to calculate future assets and liabilities.
Congratulations, Marcus!
Congratulations Mr. Pennell, well deserved.
Thank you to Mr. O’Brien for your years leading the board.
Congratulations Marcus. Thank you for your service as well as all the other Board members who give generously of their time.
Sondra Jackson Kellogg
Thank You for your service.
Was this a scheduled meeting?
I’m very excited to see changes happening on the board. Let’s keep moving in a positive direction!
Was a special board meeting called last week?
Did the Chairman of the Board leave before his term ended?
Thanks for finally answering my question about the 3% interest change that you tried to squeak by your members.
Colorado PERA changed its mission statement for I believe the first time ever. Awesome. Why now and what will actually change?
Can teachers finally have the same choice as State Workers, You, and Judges? If not, why?
Ryan Christy, CFA LinkedIn
TheUtilityNetworkEnterprise
TheColoradoThankYourNeighborRide
Ryan,
Thank you for asking these questions. Looking forward to the Board’s replies.
Hi Ryan. Thanks for the questions. Answers below.
-The Board meets next in January. It is a regularly scheduled meeting.
-No, Chairman O’Brien will leave his position at the end of its scheduled term.
-In its latest strategic plan, the Board directed staff to address the mission and vision to ensure it reflects where the organization stands today and going forward. It should capture the changes laid out in the Board’s strategic plan. You can learn more about those changes here: https://www.copera.org/sites/default/files/documents/strategicplan-overview.pdf
-The PERA Board and PERA Staff do not determine which PERA members have access to PERA Choice. The State Legislature is the sole entity that makes the distinction.
A slide from the board meeting showed that Tim O’Brien’s term ends in 2023.
Was that slide an error?
Was the November board meeting communicated to members and taxpayers in advance? Or was it unscheduled?
His seat on the Board representing PERA retirees expires in 2023, but his term as chairman ends before that. Information about upcoming Board meetings is always posted in advance on the Board’s webpage (https://www.copera.org/about/board-trustees).
When was it posted? I let the director know that I wanted to give a public comment at each meeting. I’m happy to compare email chains .
Thanks!
Thank you for your service and leadership Mr. O’Brien.
Congratulations to Marcus Pennell—-so happy for you and the PERA organization!