Legislation & Governance

PERA Board Works for Members

POSTED 3661 DAYS AGO

Managing PERA’s $44 billion trust fund is complex. While PERA staff understands this complexity inside and out, handling day-to-day operations, the PERA Board acts as the guardian of the fund. Board Trustees must stay alert to issues affecting both the investments of the PERA funds and the benefits and programs provided for PERA members.

Ballots for the upcoming election are in the mail to active and vested inactive PERA members, who will elect two Trustees to serve on the PERA Board of Trustees. (Note that retirees will not vote for a representative to the board in this upcoming election.) This includes more than 200,000 public employees who currently or have worked to provide valuable services to all of Colorado.

Members have an important interest in electing Trustees to represent them: PERA’s $44 billion in assets are funded through the contributions of PERA members and their employers, along with the earnings that come from investing those contributions. And it’s these funds that will be used to pay future retirement distributions. The PERA Board is responsible for adopting rules and policies for the administration of PERA, directly affecting how contributions are invested.

Here’s a little bit more about PERA’s Board and what they do on behalf of members.

Who are the PERA Board of Trustees?

PERA is governed by a 16-member Board of Trustees, which is made up of the following individuals:

12 Trustees, including a non-voting representative from the DPS Division, elected by the membership.
3 Trustees appointed by the Governor and confirmed by the State Senate.
The State Treasurer serves as an ex officio Trustee.

Elected Trustees serve without compensation except for necessary expenses. Trustees appointed by the Governor are compensated on a per diem basis plus necessary expenses.

Learn more about current PERA Trustees.

What does the PERA Board do?

PERA’s purpose is to provide benefits and programs as specified by state law. These benefits and programs are managed by the PERA Board. State law gives the responsibility for the investment of PERA’s funds to the Board as well as the responsibility to establish policy guidelines for the operations of PERA. To do this, the Board created a governance policy, which outlines what they expect PERA staff to achieve and how they expect it to be done. PERA staff complete the day-to-day operations under the leadership of the Executive Director who reports back to the PERA Board.

The PERA Board does not set contribution limits and benefit amounts, which is done through the State Legislature. Learn more about potential changes to PERA during the 2014 Legislative session.

What are the fiduciary obligations of the PERA Board?

All Trustees (elected, appointed, or ex officio) serve as fiduciaries who protect the assets of the PERA trust fund. Trustees, as fiduciaries, must pursue policies and make investment decisions that exclusively benefit all participants in the fund.

Colorado state law requires that PERA Trustees act in accordance with the provisions of state statute and carry out their functions solely in the interest of members and benefit recipients. Their exclusive purpose is for providing benefits and defraying reasonable expenses incurred in performing such duties as required by law. These fiduciary obligations are essential to the successful operation of PERA.

How does the PERA Board oversee investments?

The ultimate responsibility for investment performance lies with the Board, which has the following responsibilities related to investments:

Set and monitor asset allocation
Approve the Statement of Investment Policy
Select consultants and investment advisers
Oversee investment management structure and delegations to staff

In the world of public pension funds, the PERA Board is a unique governing body. While many public pension funds are an agency within state government, PERA’s founders structured the pension fund in state statute as an instrumentality of the state. This means the PERA Board is largely independent by comparison to other state retirement boards that are selected by political leaders in the state, with little member representation. This unique composition allows PERA to be responsive to its membership.

Other resources:

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).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).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. Asset allocationAn investor’s mix of stocks, bonds, and other investments. PERA’s strategic asset allocation is set by the PERA Board of Trustees.