New video series answers your questions about PERA’s investment program.
What investments are included in PERA’s portfolio? How does PERA
staff make those decisions? How does PERA manage the risk that comes with any
kind of investment?
Questions like these are addressed in a new series of videos recently released by PERA. The genesis of the series started with frequently asked questions from PERA members and stakeholders. Titled the “We Hear You” series, the video collection features interviews with PERA’s Chief Investment Officer as well as members of the investment staff answering questions from actual members. The purpose of the series is to broaden awareness of PERA’s investment program, guiding practices and the goals it seeks to achieve on behalf of the membership.
The video program is designed to complement the extensive
information about these practices – everything from asset allocation
to performance metrics – available on PERA’s website and included in the Comprehensive Annual Financial Report.
The first video in this series covers the ABCs of PERA’s Investment Program. You can watch it below, on the copera.org website, or on PERA’s YouTube channel. Have a question? Please keep them coming using this link; future videos will be based on your questions and will include information about the important work done at PERA to serve its members.
We Hear You Video: PERA’s Investment Program
Asset allocationAn investor’s mix of stocks, bonds, and other investments. PERA’s strategic asset allocation is set by the PERA Board of Trustees.
Is this the year we get our 1.5% on our retirement on July. Or do we have to wait another year.
Dear Mr. Burke,
Senate Bill 18-200 called for no annual increases in 2018 and 2019.
Its sad thatwhen you retire all your necessary expenses go up but not your retirement. Did i see that my medicare inctresae. It started at 104.00 then 124. Again at 135. Now its 135.50…thats sad cuz I’ve only been retired for four years. Will it ever stop increasing?
Please compare PERA’s net performance to a Vanguard broad market index fund over the last ten years.
Mr. Irwin,
PERA’s 10-year investment performance as of the end of 2017 is 6.0%, outperforming the policy benchmark. (More on the policy benchmark is here: https://www.peraontheissues.com/index.php/2017/09/05/policy-benchmark/)
As a long-term institutional investor, PERA uses a diversified portfolio, internally manages two-thirds of assets, and seeks to limit risk when investing on behalf of retirees and those members who may have just started careers in public service. Thus, the investment horizon is decades long.
For more information on active and passive management of assets, please see this post: https://www.peraontheissues.com/index.php/2016/08/16/active-passive-management-brief-summary/
You didn’t answer the question.
PERA’s investment performance over the last 10 years (ending December 31, 2017) is 6% net of fees. Readers are invited to compare this data with other funds with the caveats noted in the above response to Mr. Irwin.
For the specified 10-year time period (1/1/08 to 12/31/17), Vanguard’s LifeStrategy Growth fund (VASGX) is a retail static allocation to broad world (U.S. and international) market indexes. Of Vanguard’s four LifeStrategy funds, it has the closest percentage to bonds (20%) as PERA’s policy benchmark (23.5%). The performance of this single fund over the 10 years is 5.75%.
Using a simple mix of mostly Vanguard index funds to more closely align with PERA’s benchmark could look like this: 53.5% VHGEX (Global Equity), 23.5% VBTIX (Total Bond Market Index), 8.5% VGSNX (Real Estate Index), 1% Cash, and 13.5% BX (Blackstone Group) to fulfill the role of PERA’s Private Equity investments and its Opportunity Fund. The performance of this portfolio over the 10 years is 7.09%.
Vanguard’s ultra simple U.S.-centric VBAIX (Balanced Index) stock/bond fund performance is 7.16%.
Finally, VITSX (U.S. Total Stock Market) all-stock fund performance is 8.73%.
Many pension funds and endowment funds cling to complex justification that rarely beats a simple solution.
And, at the same time the PPO premium was raised by 59%. No COLA, no adjustment to the premium subsidy, and 59% increase in the health plan. GreT work PERA.
May I assume, as I have suggested before, that all of the videos, YouTube shows (all visual media), will be closed-captioned for the hearing impaired?
There is no explanation, below, as to what the asterisks are.. Required?
Did PERA make enough during 2018, for us to receive a COLA increase in 2020?
Steve,
Thank you for your questions. We are working on closed captioning for our investment series videos, so thank you for that important feedback. We won’t know the complete, audited performance of the PERA investment portfolio until later in June. The impact of 2018 on PERA’s funded status as it relates to the amount of the annual increase (and contribution rates) will be announced later this year (with an implementation date of July 2020).