Monday, September 19, 2011

State treasurer files suit against PERA

Posted By on Mon, Sep 19, 2011 at 10:59 AM

After more than three months of being stonewalled by the state's Public Employees Retirement Association, of which he is a member, Colorado Treasurer Walker Stapleton filed suit today against PERA to try to gain access to beneficiary information.

Stapleton
  • Stapleton

In a news release, Stapleton's office said PERA has a $21 billion unfunded liability, the gap between benefits due to retirees and the funds it has to pay those benefits. PERA has refused to comment.

It's the latest headache for PERA, which lies at the center of the controversy of changing governance of Springs-owned Memorial Health System. PERA initially said Memorial would have to pay nearly $250 million to remove itself from the PERA system. Memorial says it's willing to pay $50 million, but that it owes nothing. PERA counters the figure should be about $190 million.

Not only that, but PERA has been blamed for mounting costs to various governments, which we reported in January.

Stapleton's press release:

Stapleton, a PERA board member, said he asked PERA in June for information on the top 20 percent of beneficiaries. This information would assist him in independently assessing the system’s health. The requested data does not identify recipients but includes:

· Annual retirement benefit
· Age of retirement
· Division worked
· Year of retirement
· Last five years of salary
· Zip code of residence

“This raw data makes up the DNA of the retirement system. It is my objective, while serving on PERA’s board, to act as a responsible board member and gather as much information as possible in order to make informed decisions to help keep PERA solvent for current and future retirees,” Stapleton said. “Transparency and access to information should be part of any good corporate governance.”

The initial information request, sent on June 3, 2011, was formally denied almost three months later at PERA’s August 31, 2011 board meeting. PERA’s board has ignored three deadlines and has refused to take up an appeal letter to their initial refusal to grant Treasurer Stapleton access to this information.

“Filing this lawsuit was the absolute last resort. This information was requested more than three and a half months ago,” stated Stapleton. “It is a sad state of affairs when a board member has to turn to the court system to gain access to information that will allow him or her to make more informed decisions”.

Treasurer Stapleton began serving on PERA’s board after being sworn in on January 11, 2011. The Colorado Treasurer is the only elected official who serves on the board of Colorado’s pension system. Prior to being elected Treasurer, Stapleton spent his entire career in private sector business, most recently as chief executive of a publicly traded company.

PERA, along with its refusal to comment, sent this from its Aug. 31 board minutes:

Colorado PERA Board Action, August 31, 2011

On June 3, 2011, Colorado PERA received a written request from State Treasurer and Trustee Walker Stapleton. Trustee Stapleton requested information regarding individual records of the top 20 percent of PERA retirees based on benefit level.

On June 17, 2011, the Board met to discuss Trustee Stapleton’s request. Following extensive discussion, the Board voted to retain an outside fiduciary counsel to provide an opinion regarding Trustee Stapleton’s request. At the meeting, it was determined that the Executive Committee of the PERA Board would select the outside counsel after receiving input from other members of the Board. The Executive Committee subsequently retained John A. Nixon, Esq. of the law firm of Duane Morris L.L.P. to provide a legal opinion regarding Trustee Stapleton’s request.

The PERA Board met on Wednesday, August 31, 2011, to further consider Trustee Stapleton’s request. At that meeting, the Board voted to waive the attorney-client privilege related to the written opinion and directed staff not to provide the member information requested by Trustee Stapleton in his June 3, 2011, letter.

PERA takes very seriously the responsibility of maintaining the confidential information of our 478,000 members. PERA also believes that it must strictly abide by state laws and always respect its important fiduciary responsibilities.

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