The PERA Board of Trustees met for its last meeting of 2021 on Nov. 19. The Board heard updates from PERA staff and also discussed a number of important issues, several of which are summarized below.
2022 Board election
The Board approved the calendar for the 2022 Board election, when four Board seats will be up for election. They are:
- Ramon Alvarado (State Division)
- Ashley M. Smith (State Division)
- Guillermo Barriga (School Division)
- Cheryl Pattelli (Local Government Division)
Candidacy packets will be available for interested parties beginning in January, and the election will be held in May.
Member contribution interest rate
Every year, the PERA Board sets the interest rate paid on Defined Benefit (DB) Plan accounts. That interest rate is set at 3 percent for 2021 and is compounded annually.
If a PERA member leaves PERA-covered employment and requests a refund of their DB account, they receive their contributions and any applicable employer match plus the interest earned on that balance. If that member keeps their account with PERA, however, their balance will continue to accrue interest and the member will be eligible for a lifetime monthly benefit when they reach retirement eligibility.
After discussing the competitiveness of the interest rate and its effectiveness in encouraging members to keep their accounts with PERA, the Board voted to keep the interest rate at 3 percent for 2022.
Board Governance Manual update
As part of the regular review of its governance framework, the Board voted to approve a number of changes to its Governance Manual, which outlines policies and other guidelines for how the Board oversees PERA’s operations. Some of the updates were minor and involved updating wording to align with current Board practice. Others involved updating PERA’s mission and vision statements, which underwent review in 2020, and updating the Board’s standards of professional and ethical conduct.
The Governance Manual is available online here.
The Board also received an update on a draft bill calling for the legislature to make up its missed $225 million payment to PERA from 2020. That bill, which we covered previously here, passed Legislative Council review on Nov. 15, clearing the way for it to be introduced in the legislative session. Lawmakers are set to begin the regular session on Jan. 12, 2022. The Board’s next meeting is scheduled for Jan. 21, 2022.
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.