Colorado Public Employees' Retirement Association
December 19, 2003
Mr. Jonathan G. Katz
Re: File No. S7-19-03
Dear Secretary Katz:
The Colorado Public Employees' Retirement Association ("Colorado PERA") is a public pension with over $27.3 billion in assets, and is responsible for providing benefits to over 345,000 public employees, retirees and beneficiaries. In addition, Colorado PERA is a long time member and supporter of the Council of Institutional Investors (CII), and we join our colleagues in responding to the Notice of Solicitation of Public Views Regarding Possible Changes to the Proxy Rules issued by the Securities and Exchange Commission ("Commission"), Release No. 34-48626; IC-26206; File No. S7-19-03. We fully endorse and join in the detailed response by CII dated December 12, 2003, and without repeating the full content here, wish to highlight a few issues of importance to Colorado PERA and its membership.
At the outset, we commend the Commission for its decision to review the proxy rules and regulations. It is encouraging to Colorado PERA that the Commission is undertaking this review and has formulated changes and interpretations to improve corporate democracy.
As a public pension fund charged with fiduciary responsibilities to represent the interests of its public employees, retirees and beneficiaries, Colorado PERA is an active participant in corporate governance. Because election of directors is the fundamental vehicle for shareholders to have a voice in the board room, the increase in access to nominate truly independent directors is strongly supported by Colorado PERA. Toward that end Colorado PERA would respectfully suggest that no "trigger event" should be necessary. A proper alignment of interest between management and owners is only inhibited by the access delay and the withhold vote threshold in the current proposal.
While we believe complete elimination of these hurdles would best promote corporate reform and serve the investing public, reduction of the threshold to at most 20% is imperative for the proposal to promote meaningful change. Further, adoption of immediate trigger events, as addressed in the response by CII, is necessary to construct meaningful procedures for protecting investors from managerial misconduct.
On behalf of Colorado PERA, our public employees, retirees and beneficiaries, we applaud your actions, appreciate the opportunity to provide our comments and encourage the Commission to adopt meaningful changes to the proxy voting rules and regulations.