April 24, 2025
For this edition of the Fiduciary Focus column, I was thrilled to sit down with Andrew Roth, who became the Executive Director and CEO of the Colorado Public Employees’ Retirement Association (PERA) in May of 2024.
Andrew has deep experience in public pensions, having arrived in Denver from Austin, where he was the Deputy Director of the Teacher Retirement System of Texas (TRS). Prior to that, he served as the Benefits and Services Executive Officer at the California State Teachers’ Retirement System (CalSTRS). Further evidencing his leadership role in the world of institutional investors, Andrew was recently elected to the Board of Directors of the Council of Institutional Investors (CII).
As you approach your first anniversary, how are you finding the transition to PERA, which is a bit smaller than TRS, but no less focused on the members and beneficiaries?
The transition from TRS to PERA has been greatly facilitated by a terrific executive team, supportive Board, and welcoming stakeholders. While PERA is a smaller organization than either CalSTRS or TRS in terms of assets under management and the number of both members and beneficiaries, what strikes me as unique is the complexity of the plan. Five divisions within the plan means five sets of distinct stakeholders, each with their own set of concerns. Complexity aside, PERA, like CalSTRS and TRS, is hyperfocused on its members, beneficiaries, and mission, which drives a strong collaborative culture that makes working here a rewarding experience.
What would you say are the biggest challenges you are facing in 2025 as you assist the PERA Board in fulfilling their fiduciary responsibilities?
The biggest challenge we’re facing in 2025 is the volatility in the market. PERA’s funded status is below the median of US Public Pension funds, which amplifies market uncertainties and swiftly captures the attention of the plan sponsor (the Colorado General Assembly) and our stakeholders. A big part of my job involves supporting PERA’s Board of Trustees with helpful information and guidance on complex investment, actuarial, and fiduciary concepts; when there’s a lot of noise generated by relatively short-term market events, that cacophony can distract and disrupt focus on PERA’s 30-year horizon and working toward the full funding of the plan.
Direction from Washington reflects very different approaches from those of the recent past, especially with changes in regulatory and economic priorities. How is PERA accommodating these adjustments in its planning?
Great question. PERA has historically, and continues to be, focused on generating the best risk-adjusted returns possible. We pay close attention to regulatory changes and economic priorities in both our state as well as in Washington. Shifts in priorities from either place result in the executive team and Board of Trustees making policy decisions as appropriate to accommodate the policy requirements generated either by our plan sponsor in the Colorado Legislature or by the federal government. PERA’s talented investment team’s focus on investing in what we know has served us well regardless of which direction the political winds blow.
There’s no doubt that the focus on ESG & DEI priorities has changed significantly in the current political climate. In what way should institutional investors focus on developments in this area?
A timely question, and one that is on the minds of many people in the financial world. After years of focusing on making improvements in the DEI-related space, new direction from the federal government raises significant questions and debate, and related activities may now result in serious consequences. Many corporate entities and institutional investors have responded by dropping or repurposing DEI-related initiatives to avoid triggering penalties or negative interest from the federal government. ESG is a little more complicated as due diligence requires investors to consider risk, including risks that may be related to environmental, social, or governance factors. Sound investment principles and fiduciary duties require institutional investors (and really any serious investor) to comprehensively consider all risks that may impact returns. Poor governance, unsound practices, and disregard for rules and regulations will negatively impact investment returns, which in my opinion means institutional investors will continue to evaluate risk and make decisions accordingly.
Artificial Intelligence (AI) is altering the way we think about accomplishing various tasks. Do you see this trend coming into play at PERA?
Yes, like most industries, public pension funds are considering AI technology and the use cases that can support and enhance our administration of the retirement plan benefits that are of crucial importance to our members and beneficiaries. While it undoubtedly has useful applications, AI requires scrutiny as its limitations and drawbacks are well documented and serious in nature. At PERA, we’ve established an AI policy and an AI council to evaluate the tools rapidly coming online in this space and assess how appropriate they are for our internal use. I’d describe PERA’s utilization of AI-related tools as somewhat limited in scope but useful in terms of facilitating production-related tasks.
You were recently elected to the Board of CII. How do you see this role as complimenting your role at PERA and assisting you in fulfilling your fiduciary duties?
As CEO, I am accountable for oversight of the entire organization, including the investment function. My previous roles in the public pension space were primarily focused on plan design, pension benefits, information technology, human resources, finance, shared services, and large-scale enterprise projects. Upon stepping into the CEO role at PERA, I wanted to lean in and deepen my investment knowledge. We are incredibly fortunate at PERA to have a talented and tenured investment team that has helped expedite this continued learning and development for me. Participating on the CII board provides me with an additional opportunity to expand my knowledge at an appropriate level about issues impacting institutional investors. This all helps me refine and calibrate the fiduciary lens through which I evaluate related issues affecting PERA and our important mission and purpose.