0EFC815A2752EEAB8725846A0056353D Hearing Summary

Mr. Ron Baker, Executive Director of PERA, presented to the subcommittee on the topic of PERA's board governance, and distributed a handout (Attachment B). He stated that there are two main bodies that oversee PERA: the General Assembly sets the benefits, contribution rates, and other pieces of the plan requirements, while the PERA board acts as the fiduciaries who oversee the investment plan. The board hires actuaries and economists to advise them on investment assumptions, and adopts assumptions using that expertise. He discussed board reimbursements, training, workload, and its committees and their responsibilities. He stated that PERA has a very thorough and robust governance system that lays out the parameters of everyone who is involved and has won accolades for their board governance manual.

Mr. Baker responded to committee members' questions, dialoguing with Mr. Sharf about the role of PERA staff and the PERA board in investments and the recent history of insolvency. Mr. Arnold asked about the history of consultants and whether the board generally followed the consultants' advice.  Mr. Baker responded that PERA reevaluates its consultants every three to five years and that in some cases the board takes a more conservative approach. Mr. Valore-Caplan discussed his experience on the PERA board and noted common misconceptions about the PERA board's oversight role versus its role in the investment process. Mr. Baker discussed the Aon asset-liability study and the board's role in that process.