Month: April 2025

News You Should Know: Colo. Governor Signs $44 Billion Budget

Posted on by Kurt Sevits

Colorado Gov. Polis Signs $44 Billion Budget into Law | Colorado Politics

After months of debate and legislative work, the State of Colorado officially has a budget for the next fiscal year. Gov. Jared Polis signed the $44 billion budget bill into law this week. Lawmakers had to cut more than $1 billion in order to come up with a balanced budget.

Despite Economic Uncertainty, Americans Remain Confident About Retirement, Survey Shows | Kiplinger

Workers and retirees alike are confident they’ll have enough money in retirement even amid widespread uncertainty about the economy, according to a recent survey. The survey, from the Employee Benefit Research Institute and Greenwald Research, found that 67% of workers and 78% of retirees are confident about retirement. However, survey respondents did express concern about changes at the federal level, particularly around Medicare and Social Security.

What Older Adults Need to Know About Possible Tariffs on Prescription Drugs | Next Avenue

The federal government has proposed imposing tariffs on imported prescription medications, and that has the potential to affect many older Americans, who tend to take more medications than younger people. While there is still a lot of uncertainty about what the government will do, experts say drug manufacturers could face shortages and raise prices if tariffs do go into effect.

Caught In The Middle: The Sandwich Generation’s Financial Fears About Aging Parents | Forbes

Being a member of the sandwich generation—people who find themselves caring for children and aging parents at the same time—means potentially having to pay for a parent’s long-term medical needs while also putting kids through school. Here are some tips for finding resources that might help ease some of the caretaking burden.

News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

Honoring PERA Members Who are Making a Difference

Posted on by Kurt Sevits

May 4 to 10 is Public Service Recognition Week, and we want to celebrate by honoring the impact PERA members have on the State of Colorado.

PERA provides retirement and other benefits to more than 700,000 current and former public employees—teachers, snow plow drivers, state troopers, local government employees, and others who provide vital services to our state.

We recently had the honor of attending the Colorado Community College System’s Commitment to Excellence Awards ceremony in Denver where we witnessed outstanding public service in action. The awards celebrate exceptional faculty and staff at community colleges across the state.

From Otero College in La Junta to Arapahoe Community College in the Denver area, these PERA members go above and beyond to serve the thousands of Colorado students who enroll at a community college every year.

Sandra Butler, Arapahoe Community College

Joe Schreiner, Community College of Denver

Cynthia Piper, Northeastern Junior College

Matthew Sanchez, Red Rocks Community College

Amy Buckingham, Red Rocks Community College

Thank you to these and all public employees who make a lasting impact on their communities and the State of Colorado every day.

News You Should Know: Congress Extends Telehealth Rules for Medicare

Posted on by Kurt Sevits

Congress Extends Medicare Telehealth Flexibilities for 6 Months | Healthcare Dive

Lawmakers in Congress passed a temporary extension for rules allowing more flexibility in telehealth coverage under traditional Medicare. The pandemic-era rules, which allow more people to receive care at home, now apply through the end of September. PERACare’s Medicare Advantage plans offer virtual doctor visits with no copay.

How to Teach Your Child About Financial Literacy | Knowledge at Wharton

April is national financial literacy month, and a surprisingly large share of American adults struggle to correctly answer basic questions about personal finance. It can help to start young, and in this article, a co-creator of the “big three” financial literacy test offers tips for teaching children about money.

The Rule of 1,000 Hours in Retirement | Kiplinger

How much free time will you have in retirement? Not all time is equal, and experts say when you subtract low-effort leisure activities like watching TV or casually socializing, most people only have about 1,000 hours left each year (or just a few hours a day) for hobbies, travel, and other enjoyable activities. How you spend your time in retirement is just as important as how you spend your money, so here are some tips for making good use of those 1,000 hours.

As a $72 trillion ‘Great Wealth Transfer’ is Set to Begin, Here are 4 Estate-Planning Rules to Follow | MarketWatch

In the coming years, older generations are expected to pass down trillions of dollars to their children and grandchildren in a societal shift known as the “great wealth transfer.” Experts say planning is key to making sure that transfer goes well—and some simple steps now can help your loved ones avoid confusion down the road.

News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

The Value of a Long-Term Strategy in Uncertain Markets

Posted on by Kurt Sevits

If you pay attention to what’s happening on Wall Street, you know 2025 is off to a bumpy start in the global financial markets.

Concerns over tariffs and a potential trade war, coupled with investor anxiety about inflation and a possible recession, have led to significant swings in major indexes like the S&P 500.

While uncertainty and volatility can be disconcerting, the PERA Board and staff take a very careful, thoughtful approach to investing that balances risks and potential returns.

What does volatility mean for Colorado PERA?

For institutional investors like Colorado PERA, ups and downs in the markets are expected. Rather than try to make decisions based on what happens day-to-day, PERA’s approach involves staying the course during times of volatility.

The PERA Board of Trustees has taken considerable care to develop an investment policy and strategic asset allocation that focus on diversification and long-term performance to ensure the sustainability of the fund and meet pension obligations for our current and future retirees.

This disciplined approach means PERA remains secure and retirees can count on receiving monthly benefits they cannot outlive.

Maintaining a strategic portfolio

PERA’s investment staff, led by Chief Investment Officer/Chief Operating Officer Amy C. McGarrity, manages more than $61 billion in assets for the Defined Benefit Plan. The portfolio includes a diverse mix of assets across a broad range of public and private markets, including public equities, fixed income, commercial real estate, private equity, and alternative assets. This diversification helps limit the potential negative impact of any one type of investment experiencing losses.

“Strategic asset allocation is the single largest driver of investment returns, and our portfolio includes a wide variety of assets meant to perform over multiple decades,” McGarrity said. “We believe in remaining invested in the markets so we can continue to generate returns for our members and benefit recipients for many years to come.”

The portfolio also undergoes regular review. Every four or five years, the Board conducts what is known as an asset/liability study to examine the portfolio and ensure the asset allocation aligns with PERA’s funding goals. The most recent study, completed in 2024, led the Board to adopt new asset allocation targets that reduced the amount allocated to Global Equity and increased the amount allocated to Private Equity and Real Estate.

The updated strategic asset allocation is expected to provide incrementally greater diversification in the portfolio with the goal to slightly lower risk and add potential for higher returns over time.

READ MORE: PERA Board Adopts New Strategic Asset Allocation Following Study

Focusing on long-term performance

PERA’s assumed rate of return—one of the key numbers we use to forecast how much money the fund will have on hand to pay benefits in the future—is 7.25 percent. While the actual return in a given year may be higher or lower than 7.25 percent, the goal is to meet the assumed rate of return over a period of 30 or more years. Our annualized return over the past 30 years is 8.3 percent, gross of fees.

By maintaining a well-diversified portfolio and focusing on long-term returns, we’re making sure the trust funds that provide retirement and other benefits to Colorado’s public workforce are well-positioned to weather market volatility.

News You Should Know: State Lawmakers Introduce $43.9B Budget Proposal

Posted on by Kurt Sevits

$43.9 Billion Budget Bill Introduced in Colorado Senate | Colorado Politics

State lawmakers have been working to build out the budget for the next fiscal year while trying to fill a $1.2 billion funding hole, and they released their proposal this week. In total, the budget calls for $43.9 billion in spending with dozens of accompanying bills that cut or transfer funds to fill the budget shortfall.

Enbrel Maker’s Effort to Stop Colorado from Capping Drug Price Dismissed | The Colorado Sun

The Legislature created the Colorado Prescription Drug Affordability Board in 2021 with the goal of reviewing the affordability of prescription drugs and capping the prices of medications deemed to be too unaffordable. Drugmaker Amgen filed a lawsuit trying to prevent the Board from capping the price of its autoimmune drug Enbrel, but a judge dismissed the suit.

Social Security Officials Partially Walk Back Plans for In-Person Verification | NPR

After previously announcing that some Social Security beneficiaries would need to verify their identities in-person at a Social Security office, the Social Security Administration is updating its policy and moving its deadline. The agency now says the in-person requirement will only apply to people who are trying to access retirement, survivor, or auxiliary benefits and who are unable to verify their identity online.

The SEC Holds its First Cryptocurrency Roundtable | Marketplace

The Securities and Exchange Commission (SEC), which enforces regulations in financial markets, held its first roundtable meeting on cryptocurrencies last month. The question at the center of the agency’s discussion is whether the SEC should regulate cryptocurrencies the same way it regulates stocks and bonds.

News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

Unitization: Leveraging PERA’s Investment Expertise to Benefit Our Participants

Posted on by Kurt Sevits

The investment staff at Colorado PERA have a large responsibility: managing more than $61 billion for the defined benefit plans and almost $6 billion for the defined contribution plans on behalf of current and former public employees.

We operate a low-cost investment program—management expenses amount to less than one-half of one percent of the total fund—and staff are always looking for ways to improve. One way we reduce costs for members is by managing a large portion of the portfolio internally rather than paying outside managers.

PERA started managing some assets internally in the 1970s, and we’ve been expanding that capability where appropriate over the years. We now internally manage about 60% of all DB Plan investments.

We estimate we save our members at least $65 million a year in fees by managing PERA Defined Benefit (DB) Plan assets in-house and, through reductions in administration and investment management fees, have achieved an 82% decrease in fees in the PERAPlus 401(k) plan since 2011.

A new strategy PERA’s investment team has been exploring in recent years is unitization.

What is unitization?

Perhaps the easiest way to understand unitized investment products is to think of them like mutual funds—investors pool their resources in a fund which invests in a mix of investments, and each investor owns shares (or units) of the pool. This can make it easier for individual investors to have exposure to assets that are often only available to large institutional investors, since plan participants can own a portion of the overall pool instead of having to buy each underlying asset.

In the context of PERA’s investment program, unitizing offers to participants in the PERA Defined Contribution (DC) Plan and the PERAPlus 401(k) and 457 Plans the opportunity to invest alongside the PERA DB Plan in a combined pool of assets while reaping the benefits of the professional management experience of our staff.

Unlike the DB Plan, participants in the DC Plan and PERAPlus plans make their own investment decisions and select from a variety of white label funds that are overseen by internal and/or external asset managers. One goal of unitization is to increase the amount of assets managed internally, which reduces the amount of money participants pay in fees to those external managers.

“We have a highly skilled team of investment professionals who work every day to be effective and responsible stewards of the DB Plan’s assets,” said Chief Investment Officer/Chief Operating Officer Amy C. McGarrity. “I’m glad we can extend some of that investment management expertise to our DC Plan and PERAPlus participants and potentially lower their investment management fees.”

PERA’s investment team began exploring unitization several years ago and completed work on unitizing the Fixed Income asset class in 2022, producing cost savings for participants in the PERAdvantage Fixed Income fund. In early 2025, staff completed unitization of the Global Equity asset class, PERA’s largest, which allows for improved efficiencies in administration.

PERA’s investment team has long-term aspirations, including the potential of eventually unitizing the entire DB Plan portfolio or offering custom-built target retirement date funds.

Unitization is just one way PERA staff are working to innovate and modernize the services we provide to our members and ensure a secure retirement for the hundreds of thousands of current and former public employees who serve Colorado.