If Colorado PERA members and retirees share one thing in common, it’s that they want to feel as comfortable as possible about how their retirement fund is being invested. That’s why, for the second consecutive year, PERA has released an Investment Stewardship Report detailing PERA’s approach to financially sustainable investing.
PERA’s overall approach to investment stewardship is straightforward: Seek out quality investments that are expected to provide the best risk-adjusted returns to PERA’s portfolio over the long term. The report outlines the ways PERA makes decisions to promote the financial sustainability of the Fund.
Keeping costs low
One of the most demonstrable ways PERA limits costs is by managing the majority of its investments in-house—61% as of 2018. Managing PERA’s public equity and public fixed income investments in-house saves PERA an estimated $45 million per year over the expected cost to outsource the management of those assets. PERA has also lowered fees for its 401(k), 457, and Defined Contribution plans and negotiated lower rates with its external partners.
Integrating relevant factors
Another way PERA practices good stewardship is by making sure its investments are positioned to deliver value for our members today and in the future. PERA believes responsible business practices can lead to better returns for investors, and seeks investments in quality firms that operate responsibly and are well-positioned to adapt to changes over time for continued profitability. Aspects PERA considers may include ESG-related issues that impact the long-term performance of their investments.
Advocating for sustainable practices and stronger markets
PERA is also committed to using its voice as a large institutional investor to engage with the companies in which we invest to ensure they adopt responsible and sustainable business practices. One of the most significant ways for shareholders to influence positive change is through shareholder voting, and we take our role seriously. For instance, in 2018 PERA staff cast votes on 63,031 corporate ballot proposals. PERA also engages with regulators, policy makers, legislators, corporations, and advisory boards to develop and share best practices.
PERA remains focused on generating long-term investment returns for its members. To learn more about PERA’s approach to stewardship, read the full report.