In this story:
- Committee members heard from PERA leaders, external auditors and actuarial consultants
- External auditors gave PERA’s 2020 annual report a clean audit with no issues
- PERA gets a “green light” on its funding progress
PERA leaders and actuarial consultants appeared before the Colorado General Assembly’s Legislative Audit Committee on Aug. 18. The purpose of the hearing was to review PERA’s 2020 Comprehensive Annual Financial Report, released earlier this summer, and to review the findings of an external audit of the report. Committee members also heard an update from PERA’s actuarial consultants on PERA’s funded status and had the opportunity to ask questions.
Below is a summary of information presented at the hearing. To listen to an audio recording of the full hearing, click here.
Results of PERA’s annual audit
Every year, the Office of the State Auditor hires an independent auditor to review PERA’s financial status and fiscal controls. CliftonLarsonAllen LLP has been auditing PERA’s annual statements since 2015.
For the year that ended Dec. 31, 2020, the auditors gave the annual report a clean audit, with no significant issues or outstanding recommendations.
Click here to read the full audit report.
PERA gets a ‘green light’
As part of its annual financial reporting, PERA enlists actuarial consulting firm Segal to issue an assessment of PERA’s funding progress called Signal Light Reporting. The report uses a simple color-coded system similar to a traffic signal — shades of green, yellow and red — to give a clear representation of whether PERA is on track to eliminate its unfunded liability.
Segal simulates thousands of possible scenarios to test the effects of different variables — like investment returns and public employer payroll changes, for example — on the likelihood of PERA reaching its target of full funding by 2048. The projected results range from dark green (fully funded ahead of schedule) to dark red (insolvent within 20 years). As of Dec. 31, 2020, all five division trust funds were in “green” or “dark green” status, meaning they are expected to be fully funded by 2048.
Click here to read the full Signal Light report.
The Legislative Audit Committee is one of several legislative committees and subcommittees that PERA reports to regularly. Others include the Joint Budget Committee, Joint Finance Committee, Pension Review Subcommittee, and Pension Review Commission. These regular meetings with lawmakers allow for robust oversight and transparency into the state’s largest public employee retirement system.