EAD237DF2A1A461D8725846A0052B7E9 Hearing Summary

Ms. Dianne Ray, State Auditor, presented a handout (Attachment A) and discussed the possibility of the Office of the State Auditor (OSA) performing a governance audit of the Public Employees' Retirement Association (PERA).

Mr. Sias went over what the proposed audit of PERA included and noted that the subject of board membership was not included. He wondered whether the separate independent review, for which the OSA is preparing a Request for Proposals, could include governance issues in its scope. Ms. Ray stated that it could not because these issues were outside of the limited statutory scope of that review.

Mr. Valore-Caplan and Mr. Blumenthal discussed the topic of who is ultimately responsible for PERA's solvency and whether that inquiry would fit into the scope of the audit. Ms. Ray requested that Mr. Valore-Caplan frame those questions around investment and economic assumptions, and Mr. Valore-Caplan offered to provide such language.

Discussion ensued regarding issues of pension fund governance. Nicole Myers, Office of Legislative Legal Services, came to the table to respond to questions related to the subcommittee's scope. Mr. Rogers moved to accept and move forward with the Governance Audit of PERA. Representative Bird asked whether the committee would like to discuss the consensus and scope. Ms. Ray responded to clarifying questions from the committee.

Representative Bird stated that the subcommittee would return to the discussion of Mr. Valore-Caplan's proposed language regarding the inclusion of governance in the auditor's scope and vote on whether or not to move forward with the audit after the lunch break.

The committee recessed.

The committee reconvened.

Representative Bird asked Mr. Rogers to reframe his motion as a recommendation. Mr. Rogers withdrew his motion and made a recommendation that the subcommitee proceed with the proposed audit. Representative Bird reiterated that the committee would vote on that recommendation after lunch.