The PERA Board of Trustees met on Friday, Nov. 17 for its final regular meeting of 2023.
Below are highlights of some of the major topics of discussion and important actions the Board took during the meeting.
2024 Board election
The Board approved the calendar for the 2024 Board election, during which four seats will be up for election: Two in the State Division, one in the School Division, and one in the Denver Public Schools Division.
Candidacy information will be available to members of those divisions in early January, and the election will take place in May.
Member contribution interest rate
Every PERA Defined Benefit Plan account accrues interest, compounded annually. If a PERA member leaves PERA-covered employment and requests a refund of their account, they receive their contributions, the interest earned on that balance, and any applicable employer match. If that member keeps their account with PERA, the balance will continue to accrue interest and the member has multiple options upon reaching retirement eligibility, including choosing a lifetime monthly benefit.
The Board is responsible for setting the interest rate every year; it currently stands at 3 percent. The Board’s policy, updated in 2020, evaluates the interest rate as a component of members’ overall retirement benefit. After discussing the issue, Trustees voted to keep the interest rate at 3 percent for 2024.
Asset/liability study update
In September, the Board kicked off an important analysis of PERA’s investment portfolio and asset allocation strategy known as an asset/liability study. The project will help the Board determine if it needs to make any changes to PERA’s mix of investments. PERA’s strategic asset allocation is the primary driver of investment returns, and the Board adopted its current allocation following the last asset/liability study in 2019.
The Board’s investment consultant, Aon, said in the meeting that it continues to work with PERA’s investment staff to gather and analyze information. That process will continue over the next few months, with additional discussion in January.
With the 2024 General Assembly around the corner, the Trustees discussed the upcoming session and potential PERA-related legislation. The conversation included two bills that lawmakers on the Pension Review Commission expect to introduce: One that aims to expand the number of PERA retirees who can work for school districts without reductions in their benefits, and one that proposes a $700 tax credit for qualifying retirees in tax years 2024 and 2025.
The Board’s first meeting of 2024 will take place on Jan. 19.
Defined benefitAlso known as a pension, this is a type of pooled retirement plan in which the plan promises to pay a lifetime benefit to the employee at retirement. The plan manages investments on behalf of members, and the retirement benefit is based on factors such as age at retirement, years of employment and salary history.Asset allocationAn investor’s mix of stocks, bonds, and other investments. PERA’s strategic asset allocation is set by the PERA Board of Trustees.