I_PensionRevew_2023A 09/13/2023 01:02:35 PM Committee Summary PUBLICSTAFF SUMMARY OF MEETINGINTERIM COMMITTEE PENSION REVIEW COMMISSION Date 09/13/2023 Attendance Hamrick X Hansen X Liston E Snyder X Sullivan X Taggart X Van Winkle X Wilson X Kolker X Kipp X Time 01:02:35 PM to 05:18:54 PM Place HCR 0112 This Meeting was called to order by Kipp This Report was prepared by Katie Ruedebusch Hearing Items Action Taken hOpening Remarks Committee Discussion Only hPresentation from the FPPA Committee Discussion Only hPresentation from PERA Committee Discussion Only hReview Recommendations from the Pension Review Subcommittee Committee Discussion Only hPublic Testimony Committee Discussion Only hBill Draft Requests Committee Discussion Only Opening Remarks - Committee Discussion Only 01:02:54 PM Chair Kipp welcomed the committee and made some opening remarks. Presentation from the FPPA - Committee Discussion Only Attachment Tag File Name Attachment A http://www2.leg.state.co.us/CLICS/CLICS2023A/commsumm.nsf/0/C505B133D7BE...$File/Attachment A - Combined.pdf?OpenElement Attachment A - Combined.pdf 01:03:18 PM Executive Director Kevin Lindahl, representing the Fire and Police Pension Association (FPPA), provided an overview of the FPPA. The presentation may be found in Attachment A. 01:10:07 PM Mr. Lindahl continued by discussing FPPA membership, plan organization, funded status, and contribution rates. Committee discussion ensued regarding full funding and cost of living adjustments (COLA). 01:15:25 PM Mr. Scott Simon, representing FPPA, continued by discussing FPPA's investment assets and allocations as well as noting the last 20 years of annual returns. He also discussed FPPA's performance vs. benchmarks. 01:21:09 PM In response to committee questions, Mr. Simon discussed the definitions of various terms. 01:29:41 PM Mr. Adam Franklin, representing FPPA, discussed 2023 COLA legislation and FPPA's updated COLA policy. 01:35:36 PM He continued by discussing some examples of the new policy in 2023 and 2024. 01:41:34 PM Mr. Franklin continued by discussing additional saving opportunity for members. 01:42:19 PM Mr. Franklin continued by discussing possible 2024 legislation. 01:50:33 PM In response to a committee question, Mr. Lindahl discussed the history of the death and disability plan pre-1997. 01:56:47 PM Mr. Scott Simon returned to discuss the Pension Review Commission's request for passive vs. active approach. 01:57:36 PM Mr. Simon discussed managing risks and comparison to other funds. 02:09:10 PM Mr. Simon continued by discussing transition costs and fees. 02:34:11 PM Committee discussion with FPPA continued. Presentation from PERA - Committee Discussion Only Attachment Tag File Name Attachment B http://www2.leg.state.co.us/CLICS/CLICS2023A/commsumm.nsf/0/F48C8CF38603...$File/Attachment B.pdf?OpenElement Attachment B.pdf 02:47:24 PM Executive Director Amy McGarrity, representing the Public Employees' Retirement Association (PERA), provided an update to the committee on PERA. Mr. Micheal Steppat, representing PERA, discussed PERA's governance. PERA's presentation may be found in Attachment B. 02:49:05 PM Ms. McGarrity continued by discussing PERA's summary of valuation highlights and the automatic adjustment provision. 02:55:39 PM Director McGarrity continued by discussing PERA's 2022 investment performance, asset allocation, and market performance. 02:59:15 PM Mr. Steppat continued by discussing 2023 legislation related to PERA. 03:01:35 PM Director McGarrity continued by discussing PERA's action moving forward and noted that they will kick on the proxy policy in 2025. 03:03:55 PM Ms. McGarrity continued by discussing PERA's analysis of active vs. passive investment. 03:13:54 PM Ms. McGarrity continued by discussing PERA's historical performance in relation to the public market as well as PERA's peer group ranking and performance. She also highlighted PERA's current strategic asset allocation implemenation and the value-add of PERA's active public market approach. 03:21:56 PM She continued by discussing historical expenses and PERA's investment fees vs. peer plans. 03:28:28 PM Committee discussing continued with PERA about the 70/30 passive portfolio, PERA's investments in extractive industries, PERA's investment management policy, and other topics. 03:51:58 PM Committee discussion continued with PERA. 04:00:20 PM Committee discussions continued on third-party staffing for substitute teachers and PERA contributions, several teacher shortage statutory changes, and the automatic adjustment. Review Recommendations from the Pension Review Subcommittee - Committee Discussion Only Attachment Tag File Name Attachment C http://www2.leg.state.co.us/CLICS/CLICS2023A/commsumm.nsf/0/47B6E591B909...$File/Attachment C.pdf?OpenElement Attachment C.pdf 04:11:33 PM Rep. Hamrick, Chair of the Pension Review Subcommittee, provided information on the subcommittee's legislative recommendation to PERA. The Subcommittee's recomendations may be found in Attachment C. 04:16:48 PM Committee discussion ensued on the means-testing language in the Subcommittee's recommendation. Public Testimony - Committee Discussion Only 04:20:53 PM Mr. Gordon East, representing himself, testified to the committee. Mr. James Lipscomb, representing himself, testified. Bret Miles, representing the Colorado Association of School Executives, testified. Chuck Gray, representing themself, testified. Mark Qualy, representing themself, testified. Bill Draft Requests - Committee Discussion Only 04:46:31 PM Ms. Nicole Myers and Ms. Jessica Herrera, Legislative Legal Services, came to the table to discuss the interim bill process. 04:46:36 PM Committee discussion on bill drafts ensued. 04:58:23 PM Motion Draft a bill concerning the number of days that retired teachers may work as substitutes and other issues related to substitute teachers as a percentage of active teachers. Moved Kolker Seconded Hamrick Hamrick Hansen Liston Excused Snyder Sullivan Taggart Van Winkle Wilson Kolker Kipp YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection 05:05:02 PM Motion Draft a bill related to the Pension Review Subcommittee recommendation that also includes all public pensions Moved Hamrick Seconded Kolker Hamrick No Hansen Yes Liston Excused Snyder No Sullivan No Taggart No Van Winkle No Wilson No Kolker No Kipp Yes YES: 2 NO: 7 EXC: 1 ABS: 0 FINAL ACTION: FAIL 05:06:29 PM Motion Draft a bill related to the Pension Review Subcommittee recommendations Moved Hamrick Seconded Kolker Hamrick Yes Hansen Yes Liston Excused Snyder Yes Sullivan Yes Taggart Yes Van Winkle No Wilson No Kolker Yes Kipp Yes YES: 7 NO: 2 EXC: 1 ABS: 0 FINAL ACTION: PASS 05:07:29 PM Motion Draft a bill related to a clean-up of FPPA statutes Moved Kolker Seconded Snyder Hamrick Hansen Liston Excused Snyder Sullivan Taggart Van Winkle Wilson Kolker Kipp YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection 05:08:17 PM Motion Draft a bill related to funding the state share of FPPA death and disability plan. Moved Kolker Seconded Snyder Hamrick Yes Hansen Yes Liston Excused Snyder Yes Sullivan Yes Taggart Yes Van Winkle Yes Wilson No Kolker Yes Kipp Yes YES: 8 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS 05:12:04 PM Motion Draft a bill to fund the PERA shortfall related to the 2020 missed direct distribution payment Moved Kolker Seconded Hamrick Hamrick Hansen Liston Excused Snyder Sullivan Taggart Van Winkle Wilson Kolker Kipp YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection 05:13:17 PM Motion Draft a bill related to the PERA contributions of third party substitute teachers Moved Kolker Seconded Wilson Hamrick Yes Hansen Yes Liston Excused Snyder No Sullivan No Taggart Yes Van Winkle Yes Wilson Yes Kolker Yes Kipp Yes YES: 7 NO: 2 EXC: 1 ABS: 0 FINAL ACTION: PASS 05:13:19 PM The committee wrapped up its discussion on bill requests. 05:18:54 PM The committee adjourned.
