For another year, Colorado PERA has been recognized for outstanding customer service and low administrative costs by a global company that analyzes pension funds worldwide.
CEM Benchmarking analyzes pension fund performance, including PERA’s, by comparing 73 different pension plans across the globe. Pension plans are analyzed relative to a peer group of similar-sized plans as well as to all 73 different funds.
Colorado PERA is included in a peer group of 13 U.S. plans including Ohio PERS, with a membership of 1,025,000 down to TRS Louisiana, with 182,000 members. PERA is in the middle of this group, with 532,000 members as of July 2014.
The range of global pension plans varies from CalSTRS and CalPERS in California to New Mexico ERB and Utah RS. Global pension plans studied include Rolls Royce and Scottish Public Pension Agency in the United Kingdom to Ontario Pension Board in Canada, Abu Dhabi RPB and numerous other plans in several countries.
For 2013, PERA’s administrative costs were well below the average of both the 13 funds in its peer group and the 73 pension funds evaluated across the globe. PERA’s annual pension administration costs were $49 per active member per year (or annually), inactive member, and retiree, or $10 below the peer average of $59 per year.
The reasons for PERA’s lower than average costs included higher employee productivity and lower costs for activities like information technology and financial control. PERA has a long history of allowing members to apply for retirement online and calculating a future retirement benefit using PERA account information, and that also helped to lower costs.
Between 2010 and 2013, PERA administrative costs on a per-member basis (including active, inactive and retired members) decreased by 0.1 percent per year, while the average cost of peers increased by 0.7 percent per year.
PERA’s overall service score, measuring the customer service PERA provides its members and retirees, was 86 out of 100. Only four funds out of the 73 measured had higher service scores than PERA.
It is notable that PERA has such strong customer service scores while maintaining below-average costs, given that strong customer service tends to drive costs higher.
“It’s important that Colorado PERA members, policymakers, and taxpayers know that PERA continues to receive high marks when we are compared to our peers in the United States, as well as around the world,” said Greg Smith, PERA’s executive director. “It is infrequent that one of our members would have the occasion to interact with another pension fund, so the CEM Benchmarking service confirms what many of our members tell us – that PERA is one of the best customer service experiences they have. Every business strives to have satisfied customers and meet their needs at a low cost. This report shows we’re doing that at PERA,” Smith concluded.
PERA’s call center and customer satisfaction survey scores were, in particular, higher than many of its peer plans. The report also noted that 100 percent of annuity pension inceptions, or monthly retirement distributions, are paid without an interruption of cash flow greater than one month between the final paycheck and the first retirement distribution check.
PERA’s service score increased by 2 points from 84 to 86 over the last four years, while the average score of the peer group remained flat over that time.
The results of the CEM Benchmarking study further demonstrate the strong commitment that PERA staff make on a daily basis to providing exceptional service for PERA members and retirees. PERA provides this level of service at a low cost, protecting the retirement savings of its members and continuing to be one of Colorado’s best investments for members, retirees, and taxpayers across the state.