PERA releases stewardship report

On July 22, Colorado PERA released its 2019 Investment
stewardship Report, highlighting PERA’s commitment to long-term
financial sustainability through investment cost stewardship

PERA’s approach to investment stewardship is straightforward: Seek
out quality investments that are expected to provide the best risk-adjusted
returns to PERA’s portfolio over the long term. As fiduciaries to PERA’s
active, inactive, and retired members, PERA has a responsibility to achieve
financial performance in order to provide retirement benefits to its members.
stewardship encompasses all risk and opportunity factors that are important to
consider when making investment decisions.

The report, now issued for a second year, outlines PERA’s efforts
to keep costs low, advocate for strong and fair markets, and incorporate
relevant factors into its investment decisions.

PERA uses a four-part stewardship approach to achieve financial
sustainability over the long term:

• Protect
  the assets under management through cost savings and cost consciousness;
• Integrate
  relevant factors into investment decisions, including environmental, social and
  governance (ESG) considerations that may be financially material;
• Advocate
  for robust markets using PERA’s voice, vote, and authority as a long-term
  institutional investor; and
• Evaluate
  the exposures in PERA portfolios, including exposures to ESG factors, to
  identify value drivers.

PERA diligently manages investment costs on behalf of its members,
recognizing that the costs of investing should not outweigh the benefits of
investing. The report considers three avenues for investment cost stewardship:

• Reducing fees for investment options
  available to members through participant-directed defined contribution plans
  including the 401(k),
  457, and defined contribution options;
• Managing assets
  internally and partnering with external experts where partnerships add value;
• Unbundling
  trading costs from research costs in public equity
  markets.

Prudent investments at fair costs translate into the retirement
security that PERA is charged with attaining for its members.

As a long-term investor, PERA’s investments must be positioned to
deliver value for members both today and in the future. Factors that impact the
long-term performance of investments, which may include, but are not limited
to, environmental, social and governance issues, are critical to PERA’s
investment strategy. Issues ranging from consumer trends to climate change to
corporate culture may all have the potential to impact the financial
profitability of an industry or business. PERA investment professionals are experts in their field and fully consider all
financially material factors when evaluating investment risks and opportunities.
PERA invests in companies with competitive advantages which can offer financial
rewards that outweigh risks over the long run.

PERA is committed to improving disclosure, and the 2019 Investment
stewardship Report is one to deliver on that commitment. View
the Investment stewardship Report infographic. Financial
performance, information about management fees, voting guidelines and voting
records are all available at copera.org.

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.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.EsgAcronym for environmental, social, and corporate governance factors that can be used when making investment decisions.Assets under managementThe value of an investor’s entire portfolio. PERA reports this number, which includes all assets in the PERA Defined Benefit Plan division trust funds, every year in the Annual Comprehensive Financial Report.Defined contributionA type of individual retirement plan in which an employee saves a portion of each paycheck (along with a potential employer match) and invests that money. The employee’s retirement benefit is based on their account balance at retirement. A 401(k) is a type of defined contribution plan.Defined contributionA type of individual retirement plan in which an employee saves a portion of each paycheck (along with a potential employer match) and invests that money. The employee’s retirement benefit is based on their account balance at retirement. A 401(k) is a type of defined contribution plan.Public equityA type of investment in which investors purchase shares of a company that is traded on a public stock exchange.