Tuesday, March 20, 2018

Association issues Certificates of Transparency to 20 

Texas state and local public pension funds


Photo: iStock/Michail Petrov
By Allen Jones
TEXPERS Communications Manager

A national public pension trade association is recognizing several state and local public pension plans in Texas for their efforts to improve public understanding of retirement systems.

The National Conference on Public Employee Retirement Systems is awarding Certificates of Transparency to 20 Texas plans that participated in the organization’s 2017 NCPERS Public Retirement Systems Study. The Texas plans are among 164 funds nationwide surveyed in the study, which assesses efforts of pension trustees, managers, and administrators to improve the finances and operations of their funds. NCPERS released its report in January and announced certificate recipients in a news release issued March 13.

“How well or bad a fund is doing should not be a secret,” says Tyler Grossman, executive director of the El Paso Firemen and Policemen’s Pension Fund. “That has never helped a fund out, to my knowledge.”

Grossman’s fund is among the 20 Texas public pension plans that participated in NCPERS’ nationwide transparency survey. The El Paso fund will receive two Certificates of Transparency. Although state statute permits the fund to operate as a commingled retirement system, for auditing purposes, the El Paso plan is separated into two public pension funds – one for firefighters and one for law enforcement. This is the second year the El Paso plan has been recognized for participating in the transparency study.

Grossman, who also serves as second vice president on the Texas Association of Public Employee Retirement Systems’ board of directors, says transparency among public pension funds is important because members of funds should know the sustainability of their plans.

“Transparency is never a bad thing, if consistently done,” he says. “This is something TEXPERS wants for itself and all the funds in the association. If there is going to be pension reform, it should be on a fund’s terms and, to do this, you must have all the cards on the table to do what’s best for your members.”

As part of the NCPERS transparency study, Grossman and other study participants were each required to fill out a five-page survey covering 22 topics. Participants provided detailed information about their funds including plan statistics, current and target asset allocation and investment returns, retirement benefits offered or planned, business practices and oversight practices. Transparency, according to NCPERS, means that the fund participants answered all applicable survey questions.

“Transparency and openness engender trust with the public and policymakers,” says Hank Kim, executive director and counsel for NCPERS. “As the attacks on public pensions continue and pump fake news about the opaqueness of public plans, we as a community need to respond forcefully and repeatedly.”

The collected survey data offers insight into how public pension systems adapt to legislative and regulatory developments and ups and downs in financial markets.

“The business intelligence provided by the 164 study participants supports efforts by the public pension community as a whole to comprehend and analyze challenges and find opportunities for steady improvement,” Kim says.

Of the 164 survey respondents, 62 were state funds, and 102 were local government funds. Together, the participants have more than 15.5 million active and retired members and market assets totaling $1.8 trillion.

NCPERS is providing pension plans online access to the study that will enable administrators to build models and evaluate their own data against the study’s findings. The full report is available online.

NCPERS is providing pension plans online access to the study that will enable administrators to build models and evaluate their own data against the study’s findings.
Kim says the vast majority of public plans are open and transparent, regardless of whether they participated in the NCPERS study and received a transparency certificate. He isn’t aware of a fund that doesn’t adhere to the minimum standards, which is a plan’s state or jurisdiction open meetings rules.

“We embarked on this survey because we wanted to know how plans are reacting to challenges and also how they were preparing for the next set of challenges,” Kim says. “The other unique aspect of our study is that it receives responses from state and local plans. Most other public pension surveys or reports focus exclusively on the largest state plans.”

One way for pension funds to be transparent: schedule regular meetings with the public and plan sponsors.

“The Public Employee Retirement System of Idaho and the Colorado Public Employees' Retirement Association are two examples of plans that do this,” Kim says.

Grossman, the El Paso fund recognized for its transparency, publishes a newsletter for its members that detail the fund’s sustainability. Grossman speaks at public events in El Paso, attends fire department and police officer shift meetings offering information on the fund, and hosts open house educational sessions at the fund’s office.

“At the open house sessions, we will share with the members the fund’s asset allocation to show what a conservative portfolio looks like,” he says. “In doing so, [members] can better judge how their personal portfolios stack up against it to give them a better gauge of where they are at.”

The El Paso fund is also utilizing technology and social media to help educate new generations about their pensions and to set them up to take advantage of all the retirement vehicles at their disposal.

“Their defined benefits,” Grossman says, “is only one piece of the pie to set up a successful retirement portfolio.”

There is not a state mandate to participate in the NCPERS study. The El Paso fund joined the study, Grossman says, “because we are proud of what we do and what we have accomplished” – “the protection of benefits with consistent due diligence and at a low administrative cost.”

Texas public pensions funds receiving Certificates of Transparency:
  • Texas Employees Retirement System
  • Austin Fire Fighters Relief and Retirement Fund
  • Beaumont Firemen’s Relief and Retirement Fund
  • City of Austin Employees’ Retirement Fund
  • City of Dallas Employees’ Retirement Fund
  • City Public Service Employees’ Pension Plan
  • Conroe Firefighters’ Retirement Fund
  • Corpus Christi Firefighters’ Retirement Systems
  • El Paso Firemen’s Pension Fund
  • El Paso Policemen’s Pension Fund
  • Fire and Police Pension Fund, San Antonio
  • Fort Worth Employees’ Retirement Fund
  • Houston Municipal Employees Pension System
  • Houston Police Officers Pension System
  • Irving Firemen’s Relief and Retirement Fund
  • Laredo Firefighters Retirement System
  • Odessa Firemen’s Pension Board
  • Texarkana Firemen’s Relief and Retirement Fund
  • Texas Municipal Retirement System
  • San Antonio Metropolitan Transit Retirement Plan

No comments:

Post a Comment