Executives of Colorado’s largest public pension plan – who have come under fire for generous employee perks as well as a growing shortfall – will be in the spotlight this morning.
Colorado’s Legislative Audit Committee is expected to unveil the findings of a special operational audit into administrative and other expenses at the Colorado Public Employees’ Retirement Association.
Colorado PERA at the end of May covered about 365,000 current or future retirees and managed $32.1 billion in assets. However, the plan faces an estimated $11 billion shortfall in meeting future obligations.
In the face of the shortfall, PERA executives have been criticized for a number of administrative practices. They include generous travel and car allowances as well as allowing employees to cash out a year’s worth of leave and giving top executives three months of sick time.
PERA executives, who have seen the audit, declined to respond before today’s hearing.
However, on its website, the plan tries to refute some of the allegations. In an unsigned posting, PERA argues that it reformed personnel policies in 2003 and 2004 and is efficient, managing $33 billion in assets on a $33.5 million administrative budget. That works out to about 10 cents for every $100 in retirement funds managed, it said.
Members of the audit committee, which is chaired by Rep. Val Vigil, D-Thornton, did not respond to interview requests. Disclosing the contents of a state audit report before the committee makes it public is a misdemeanor.
The state-sponsored audit is aimed at determining whether its expenses are in line with similar providers.
A Denver accounting firm, Clifton Gunderson, conducted the audit after the audit committee of PERA’s board fielded a complaint in February, said Karon Hoover, an assistant to state auditor Joanne Hill.
“The state auditor, chair and vice chair of the audit committee were apprised of allegations of possible spending abuses within PERA,” Hoover said.
Hill, who sits on the plan’s board, ordered an independent outside audit. The plan will pay for the audit; the projected cost wasn’t available Monday, Hoover said.
Public employees in the state are closely watching what happens at PERA, said Miller Hudson, executive director of the Colorado Association of Public Employees.
“The possible abuse of administrative expenses is a drop in the bucket compared to the need to ensure that the fund is properly supported,” he said.
Another review of PERA and recommendations for repairing its funding shortfall is expected in mid-September, said Brian Anderson, staff director for the state Treasurer’s Commission to Strengthen and Secure PERA.
The commission, under the direction of former Colorado Gov. Dick Lamm and University of Colorado president Hank Brown, will use today’s audit, along with a financial audit released in July, in its analysis, Anderson said.
Scheduled to attend today’s hearing for PERA are Meredith Williams, executive director; David Maurek, chief operating officer; Greg Smith, general counsel; John Spielman, director of internal audit; J. Kim Natale, chief administrative officer; and Rob Gray, director of government relations.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
Audit committee members
Colorado’s Legislative Audit Committee is a permanent standing committee consisting of four senators and four representatives with equal representation from the two major political parties. The committee is responsible for reviewing and releasing audit reports and recommending special studies.
Source: State of Colorado
