PERA’s claim asks the Denver District Court to provide guidance on the circumstances under which PERA can lawfully disclose confidential member information to its Trustees. The filing comes in response to a suit by Colorado State Treasurer and PERA Trustee Walker Stapleton pressing for the disclosure (see CO Treasurer to Sue for Pension Information).
According to a posting on its website, PERA has asks the Court to declare that release of member information to a Trustee is proper when: (1) there is evidence that there is a valid fiduciary purpose; (2) the information requested has a connection to the purpose identified; (3) the cost of production is reasonable; and (4) there are safeguards to protect the confidentiality of the information.
Additionally, PERA says it has asked the Court to determine that the Board properly concluded that the Treasurer is not entitled to information he requested regarding the top 20 percent of PERA benefit recipients. “The Treasurer, despite numerous opportunities to state a valid reason for asking for this information, has never done so. In addition, the Treasurer could not describe any reasonable connection between the information he was requesting and any valid fiduciary purpose,” according to PERA.
According to PERA, Colorado law requires the system to maintain the confidentiality of “all information” in PERA’s member records. The PERA Board sought the advice of attorney John Nixon, a national expert on the fiduciary duties of board members, regarding the request, and Nixon advised PERA’s Board of Trustees that the disclosure of such information could violate the confidentiality protections in Colorado law. “Nixon also advised the PERA Board that due to the Treasurer’s lack of any valid stated purpose for the request, the Board members would be potentially breaching their fiduciary duty if they were to disclose the information to the Treasurer,” according to PERA. After carefully considering Nixon’s opinion, all Trustees except for Stapleton voted to deny the request.
PERA’s formal response to Stapleton’s lawsuit states: “This action provides an opportunity for PERA to obtain guidance regarding circumstances under which it can lawfully disclose information regarding its members and benefit recipients to PERA Trustees.”
PERA has retained Denver attorney John V. McDermott of the law firm Brownstein, Hyatt, Farber, Schreck, LLP, to represent it in the lawsuit. McDermott stated, “The claim of PERA is a constructive attempt to establish the standards to be used in the future in the event of a request by any Trustee.”
According to a posting on PERA’s website, the system’s actuarial consultants review each member and retiree record every year and report the overall results of their analysis to the PERA Board of Trustees and to the General Assembly’s Legislative Audit Committee. “Additionally, the State Auditor’s Office hires one of the four largest accounting firms in the world to audit PERA’s financial report and operations every year”. This information is publicly available on the State Auditor’s Web site and in PERA’s Comprehensive Annual Financial Report (CAFR).
In similar cases, courts in California have decided that pension records are public information (see State Court Orders Sonoma County Pension Board to Release Records).