WASHINGTON — People in the state’s retirement plan feel the crisis on Wall Street, the attorney for the Colorado Public Employees’ Retirement System told a House panel today.
“Every man or woman with a 401(k), an IRA or a retirement plan of any kind is feeling the effects of the collapse and is facing life changing adjustments to his or her financial planning,” Gregory W. Smith, general counsel for CoPERA said in a written statement for the House Committee on Oversight and Government Reform.
The committee held a hearing examining the causes and effects of the collapse of Lehman Brothers.
The retirement plan, Smith told lawmakers, represents the retirement money of 420,000 people including judges, state troopers, teachers, and many employees of local units of government.
“Each and every month we are responsible for putting to work more than $125 million of contributions from our membership in a diversified portfolio,” Smith said. In the past year, he said, CoPERA has paid benefits of over $2.5 billion to over 80,000 retirees. The plan had an asset base of $43 billion on its most recent audited financial statement.
He did not specifically address in his statement what effect the market downturn has had on the plan’s assets.
The retirement plan, he said, the plan depends upon the “strength, efficiency, and transparency” of the financial markets.
“The most fundamental tool used in the investment process is the independently verified financial statements of a company,” Smith said. “The accuracy and thoroughness of the financial disclosures are the critical foundation for sound financial analysis.”
He opposed eliminating a rule that requires companies to report the current value of assets, calling such a change “a short term disguise for the problem and ultimately undermine market strength.” That change has been proposed by come lawmakers.
