On the Front Lines: Seattle
The latest installment of the On the Front Lines series brings us to Seattle.
On the Front Lines: Seattle City Employees Retirement System
The Seattle City Employees Retirement System's decision to install a new pension administration system last year has yielded an unexpected bonus. The move eased its transition to remote work amid the Covid-19 pandemic and laid the foundation for a new service for members, according to Jeffrey Davis, executive director.
“I cannot imagine where we'd be if we didn't have that system in place,” Davis said in an interview. “Because of our transition to a new PA system, we had staff that were used to remote work and we had the infrastructure to quickly set up VPN connections. Our IT people had all been working remotely because if you're pushing out a new release, it's going to be during off hours.”
SCERS manages approximately $3 billion in assets for Seattle's non-uniformed city employees, serving 9,400 active workers and 6,800 retirees. It provides a defined-benefit plan with two tiers.
The new PA system offered the ability to create a member portal, and work to implement that component is being accelerated as Covid-19 has underscored the need to provide customers with easy access and self-service options.
“We did our first pilot earlier this year to a small subset of members, and the plan is to roll it out in phases over the next couple of months,” Davis said. For active members, this means they will gain the ability to see their contributions and service credits and perform some retirement calculations, while retirees will be able to see details on the benefits. Testing continues, with a focus on data security, Davis added.
Washington was the first state in the union to be hit by the Covid-19 pandemic. “As a city and a region, we acted pretty quickly,” Davis said. A skeleton crew was in the office as of early March; by mid-March, the entire staff was working remotely, with a few people dropping into the office occasionally to perform manual tasks.
Managing a scattered staff has been easier than expected in many ways. “The challenge is not the completion of tasks,” Davis said. “It's how to stay connected and maintain your team, your morale and your culture. As we go along, we've overcome logistical and operational issues.” Organizational issues have to be taken seriously, he added, because isolation and the general stresses of life amid a pandemic take a real toll. “We're reminding people to take time away from work, to use vacation to re-set.”
Vacations may not be glamorous when travel is restricted, he added, “but work/life balance still matters.”
Seattle operates on a calendar fiscal year, and the mayor's budget is typically presented to the city council in September. “The city budget will get hit just like every other state and municipality, but the city of Seattle has been strong in supporting the retirement system and going above and beyond in meeting required contributions,” Davis said. He is optimistic that there will be federal support to alleviate pressure on city and state budgets.
In terms of a return to normalcy, Davis said he anticipates “a long, slow transition out of where we are now.” The way pension systems provide services is likely to change as more and more systems create videos and online seminars to educate members about their benefits. “Giving people a path to answer their own questions is going to be part of the solution,” he said.
Davis does not anticipate that strategic plans will have to be altered significantly, though some priorities will shift around. “Getting the member portal up and having more online recorded seminars are two things that have become more important now. Overall, it's more urgent to make sure people have an easy way to access information and answer questions on their own. So we will be looking at the website and making sure it's easy to navigate,” he said.
Another goal, Davis added, is to “support a high-functioning board. On a normal basis, we see them one or two times a month for board and committee meetings. Now it is that much more important to make sure we are having regular communication with them, to tell them what we are doing and to communicate on the investment side.”
The overarching message he wants to drive home with members and trustees alike is about the resilience of public pension funds over long periods.
“We are long-term investors,” Davis said. “We are not going to make radical changes in response to markets acting as they are. There is a reason we created a strategic asset allocation. We put a lot of thought into it, and the key to navigating out of this situation is to hold to our approach.”