• Colorado treasurer wants public debate with PERA’s CEO

    Jun 23, 2016, 2:46pm MDT

    Monica Mendoza
    Reporter Denver Business Journal
    Colorado’s state employee pension plan reports positive returns

    Colorado state pension plan to miss full-funding target by 14 years

    Colorado Treasurer Walker Stapleton

    Colorado treasurer Walker Stapleton is not pleased with the performance of the state-employee pension plan, and he’s calling on its CEO for a public debate about the system.

    Stapleton, who is on the board of the Public Employees’ Retirement Association, has called PERA “a distressed pension system” and has accused PERA CEO Greg Smith of misleading the public about the results of the Comprehensive Annual Financial Report, (CAFR) which was released Tuesday.

    Colorado treasurer Walker Stapleton is not pleased with the performance of the state-employee pension plan and he’s calling on the its CEO for a public debate about the system.

    On Wednesday, Stapleton challenged Smith to a public debate on KOA News Radio.

    A spokeswoman for the PERA said that Smith has received the request from KOA for the debate “and we are evaluating that invitation right now,” said Katie Kaufmanis, PERA public information officer.

    There is no comment on Stapleton’s accusations, she said.

    According to the CAFR report, PERA achieved a 1.5 percent rate of return on its $43 billion portfolio in 2015. This was good news, Smith said in a statement about the report. The total fund outperformed the policy benchmark for the three- and five-year time periods and had a long-term investment return for 35 years coming in a 9.5 percent.

    But that 1.5 percent return in 2015 falls short of the plan’s assumed investment rate of the return of 7.5 percent needed for PERA to be fully funded and have the money to pay for the promised benefits to PERA’s 547,000 members, Stapleton said. Each year PERA does not achieve its 7.5 percent average rate of return, their unfunded liability grows, he said.

    Smith said in his statement that the total PERA fund return of 1.5 percent compares favorably to the BNY Mellon Performance and Risk Analytics’ and Investment Metrics’ Median Public Fund Universe return of -0.2 percent. The measure is comprised of 95 public pension funds with assets of approximately $1.4 trillion. PERA’s 10-year annualized rate of return was 6 percent compared to the BNY Mellon Performance and Risk Analytics’ and Investment Metrics’ Median Public Fund Universe return of 5.5 percent.
    Stapleton said it does not matter if the fund beat internal benchmarks. What matters, he said, is that the unfunded liability of the fund has increased to $26.8 billion.

    “I look forward to discussing this in a public and widely broadcasted forum so Coloradans and PERA members alike can hear both sides of this issue,” he said in his challenge to Smith. “The state of our pension system is critical to the fiscal health of our state and the future of our public workers.”

    Monica Mendoza covers banking and financial services, legal services, the economy and economic development, and sports business and contributes to the “Finance & Law” blog. Phone: 303-803-9230.

     

    http://www.bizjournals.com/denver/blog/finance_etc/2016/06/colorado-treasurer-wants-public-debate-with-peras.html?ana=e_du_pap&s=article_du&ed=2016-06-23&u=ewaw5QTZsfAZ0BN1ha0knw0d36a24e&t=1466724813&j=74292862

    Posted by Dana West @ 5:40 pm for Colorado politics, Event, PERA |

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