Colo. state treasurer candidate seeks records on PERA contracts
Author: Marianne Goodland - June 15, 2018 - Updated: June 28, 2018
Bernard Douthit, a Democratic candidate for Colorado state treasurer, filed two open-records requests Thursday to get a look at more than 200 contracts between the state pension plan and fund management firms that he claims are paid about $130 million per year.
Douthit’s request seeks access to the contracts, whether they can be terminated and how the assets from the Colorado Public Employees Retirement Association (PERA) are managed by those firms.
He said in a statement that he wants to know whether those assets are being mismanaged and to provide transparency around those contracts. “I’d like to look into the details of them myself from a finance standpoint,” he said.
He is making the requests under the Colorado Open Records Act (CORA), which requires that most public records be available to the public.
The U.S. Securities and Exchange Commission fined two of the companies that handle PERA assets, according to Douthit’s statement. Apollo Global Management was slapped with a $52.7 million fine in 2016 for misleading investors about fees and a loan agreement and “failing to supervise a senior partner who charged personal expenses to the funds,” according to an SEC statement. And the Blackstone Group was hit with a fine of nearly $39 million in 2015 after the company “failed to fully inform investors about benefits that the advisers obtained from accelerated monitoring fees and discounts on legal fees.”
“At a time when our Legislature passed a bill asking teachers and state troopers to take a pay cut, and retirees to have their cost of living adjustments frozen for up to 2 years, I find it very concerning that PERA, and members of our State Legislature have not done more to keep an eye on investment expenses and ensure that assets managed are valued correctly,” he added.
Douthit is one of two Democrats running in the June 26 primary for the state treasurer’s position; the other is Rep. Dave Young of Greeley, who served four years on the General Assembly’s Joint Budget Committee, which annually reviews PERA’s balance sheet.
The pension plan is underfunded by about $32 billion, but the General Assembly in May passed a reform package that is intended to ensure the plan becomes solvent within 30 years.
The reform package puts $225 million of state general fund dollars into the pension plan in 2018-19, changes the retirement age of new hires after Jan. 1, 2019 to 64 years of age, up from 58 years for teachers and 62 years for local and state government employees. All PERA members would have to contribute an additional 2 percent of salary and the plan’s annual cost-of-living increase also is decreased by 0.25 percent.
Douthit has a background in finance, including 30 years as a finance executive in a publicly-traded company. He also has worked as an economist and trained bankers at the Federal Reserve.
In the fundraising battle for the Democratic nomination, Douthit has raised $35,751 and loaned his campaign an additional $30,000. Young leads with more than $86,000 raised, as of May 31.