Colorado PERA’s Board of Trustees met on January 15. The meeting’s agenda consisted primarily of updates on operations from PERA staff, summarized below. It was also the first meeting run by the Board’s new leaders, Marcus Pennell and David Hall.
Executive Director Ron Baker and Public and Government Affairs Manager Michael Steppat presented an outlook on the 2021 legislative session.
The presentation largely mirrored the legislative preview published in PERA On The Issues in early January. The legislative session is on pause until mid-February at the soonest. When legislators return, addressing the COVID-19 pandemic will dominate debate.
PERA Senior Director of Communications Patrick von Keyserling shared projects currently underway in the department. Changes members can expect in 2021 include:
- The creation of a new dashboard that displays helpful information after logging in to a member account
- Improvements to copera.org
- A continued effort to transition to digital forms
Update from PERA’s Executive Director
Ron Baker shared some high level statistics with the Board, including:
- PERA paid out $4.7 billion in benefits from January through November
- PERA’s total membership was 636,159. These numbers are broken down by division below.
PERA’s investment staff provided an update on each asset class to the Board, as well as a Market and Portfolio Update. These presentations are summarized below.
- Global equities: Overall, PERA is overweight global equities, which means the amount currently in PERA’s portfolio is above the benchmark. As of November 2020, the most recent date for which information is available, global equities made up 59.2% of PERA’s portfolio — higher than the 56.0% policy benchmark weight, but still within the Board-established allowable range of 48%-60%.
- Fixed income: The current environment is volatile, and Treasury yields are near historic lows. Fixed income is a core asset class for PERA, providing long term income and stability, and is an anchor to offset some of the potentially more volatile components of the total investment portfolio. It made up 20.3% of PERA’s portfolio at the end of 2020.
- Private equity: Tim Moore, PERA’s Director of Private Equity, described the Private Equity environment as being “measured and cautious.” He said that Private Equity managers in general are still assessing the impact of COVID-19’s effect on the economic environment and that PERA is poised to take advantage of opportunities when the market normalizes. Private Equity made up 7.8% of PERA’s portfolio.
- Real estate: Real estate is undergoing a challenging time as retail, hotels, and office buildings all face difficulties stemming from the pandemic. PERA’s real estate portfolio is overweight toward industrial and multi-family properties and does not own any hotels or leisure properties directly. PERA’s real estate team is taking a long-term view by working with tenants in an effort to preserve rent collection. Real estate made up 8.2% of PERA’s portfolio.
- Alternatives: New investments, including private global infrastructure, royalties, and agriculture, have helped diversify PERA’s portfolio. Alternatives made up 3.8% of PERA’s total portfolio.
A complete, audited report of PERA’s 2020 investment results will be available in the Comprehensive Annual Financial Report, released in June (read more about the CAFR here). Why the wait? While the value of some asset classes, like global equities, are updated on a daily basis, other asset classes, like Private Equity, are valued on a less frequent basis.
The Board’s next meeting is on March 19.
CafrPERA's Comprehensive Annual Financial Report, released annually in June, contains audited information about PERA's investment program and operationsPrivate equityEquity capital that is not quoted on a public exchange. The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time.BenchmarkThe performance objective or standard used to define the return against which another portfolio is to be evaluated.