By Kevin Olineck
PERS Director
My role as PERS director brings with it a fiduciary responsibility, not only for my daily work in supporting the PERS Board and overseeing the agency but also as a nonvoting member of the Oregon Investment Council (OIC).
OIC directs how Oregon State Treasury manages the Oregon Public Employees Retirement Fund (OPERF), from which PERS pensions are paid.
Besides myself, PERS Board members, OIC members, and senior staff at both PERS and Treasury are considered fiduciaries within the context of administering PERS and overseeing its investments.
But what is a fiduciary and why does it matter?
A fiduciary is a person or organization who is required to act in the best interests of another party, rather than their own financial interests. Fiduciaries have important responsibilities in protecting retirement benefits and assets.
As fiduciaries for PERS, that means our priority is protecting the interests of PERS members and beneficiaries, and we look to state and federal laws for guidance.
The federal Employee Retirement Income Security Act (ERISA) sets certain standards that apply to retirement plans in private industry. While government-sponsored plans, such as PERS, are not subject to ERISA, the act guides PERS as to who has fiduciary responsibility.
ERISA assigns this responsibility to people who have control or authority over how a plan and its assets are managed, who have authority or responsibility for how the plan is administered, or who is paid to give investment advice to plan managers.
Oregon law goes a step further by requiring fiduciaries to make investment funds as “productive as possible,” subject to a prudent investor standard. This standard means that while PERS fiduciaries are directed to generate productive returns, we must do so with “reasonable care, skill, and caution” in our work. (Read the column “Fiduciary responsibility key to PERS investments,” published in the April 2022 issue of Perspectives, by former state Treasurer Tobias Read.)
Ultimately, fiduciaries are judged on how decisions are made, not the results. While a fiduciary cannot know the future, they do need to show that they identified and mitigated the potential risks within a retirement plan.
At PERS, our board members and senior agency leaders, including myself, participate in continuing education and training to ensure we are serving you well in our roles as fiduciaries. This education and training is offered to new OIC members at council meetings and to new PERS Board members through my office.
PERS also subscribes to an online education service, BoardSmart, which offers podcast-based trainings to pension plan boards.
Additionally, we’ve established a board education policy that supports board members in pursuing additional education through applicable conferences and seminars.
As your fiduciary, I see my work as helping to ensure that the PERS retirement plan is administered well for the benefit of our PERS members and their beneficiaries now and in years to come. Thank you for your service to Oregon.
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