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Peer Intelligence | Spring 2024

Coffee Chat with Mark Feldhausen 

Mark Feldhausen is the Budget and Performance Management Director at Washington State Department of Retirement Systems ("DRS"). He has worked with CEM for 25 years and is a proud recipient of many CEM awards, including the yearly winner of ‘The most timely and clean survey submission’ and the ‘Contributes the most to the Peer Intelligence Network (“PIN”)’ award.

During this interview, he looks back on his 40-year career with the Washington state government, including almost 30 years at DRS. He also shares advice for working with CEM and getting the most out of the CEM Pension Reports and conferences. 

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Can you give us a snapshot of DRS? What are the current areas of strategic focus at DRS? 

DRS administers most of the public plans in the State of Washington. It is a combination of 15 plans across eight different retirement systems, as well as the state’s deferred compensation plan. We work with about 900,000 current and former public employees, and 1,400 public employers. 

One thing about the State of Washington that makes DRS unique is that it only handles pension administration. A separate state agency handles investment management.    

Our biggest area of strategic focus is replacing our pension administration system. I came to the agency almost 30 years ago when they were putting the final touches on the last component, but it's time to upgrade.  

 Please tell us about your current role. What's your biggest area of focus?    

My current role is the agency's budget director and coordinator of performance management activities. They naturally go together because spending needs to be justified by performance.   

As the agency's budget director, I am the primary point of contact with staff in the governor's budget office, and in the fiscal committees of the state legislature.     

Internally, my role involves keeping managers around DRS up to speed on the state’s budget processes and communicating key aspects of our financial status.    

And, of course, I manage the CEM relationship. I have been coordinating our response to and interactions with CEM for quite a long time! 

How long have you worked with CEM? In what capacity? 

Back in 1999, I was tasked with looking into what was a new benchmarking service. Mike Heale flew out to Olympia and did a great job explaining the services offered by CEM. That started our contractual relationship and I've been working with CEM ever since, including serving as a member of the PABS Global Steering Group.  
Where have you used the pension administration benchmarking insights the most? Are there specific anecdotes or use cases that come to mind?   

DRS management quickly understood that the reports had valuable information to help us make decisions and understand where we stood relative to our true peers.   

The early CEM reports showed that we were delivering a high-quality and complex service at a very low cost, which was a great message to share with the governor's budget office because the state was going through tight budget times.     

The report also compared us to relevant peers in our line of business, something that is much more valuable than the more common generic data comparisons to other Washington State agencies. The CEM report gave us detailed information on how we were performing relative to peers in the United States, Canada, and internationally. This allowed us to evaluate our true performance and defend or improve our strategy. As the pension landscape evolves, these reports continue to provide actionable insights we can use for our internal decision-making processes and for legislative budgetary discussions. 
Do you have any advice for funds working with CEM on the pension administration side?   

To me, it comes down to “You get out of it what you put into it!” This includes both how you respond to the survey and your participation in the PIN. Accurate survey responses produce more reliable insights in the annual report, and the PIN is a great tool to learn and share business strategies. We are committed to answering 100% of the questions that come in, even if the answer is, “this does not apply to DRS because…”. We want to be a good peer.   

What are your favourite memories from previous PABS conferences?    

I have really enjoyed all the conferences I’ve attended. CEM does a great job of setting the agenda and facilitating peer discussions. I remember a Dutch system that spoke about the development of an avatar named Astrid. Setting the technology aside, I found it fascinating how much research went into developing the avatar. Their perspective on member behaviour and experience are universally applicable. Another memory would be when a friend from another system and I learned the hard way, that if the conference agenda says the buses will leave promptly at a certain time, they will leave with or without you! 

Coming back to advice for other funds, don't discount the other participants who may not be considered your direct peers. They might share something innovative that could be applied in your organization.    

What is the most significant change you've seen within the pension industry over your career? Where do you see the biggest opportunities and challenges given these changes?   

A big change was the creation of the Hybrid Plans in the public sector. We haven’t had enough members retire out of those plans yet to know how they have performed for retirees, so I can’t identify them as a challenge. 
The bigger change that pension administration is undergoing is the move to self-service. The current challenge isn’t so much in building the service but in ensuring it is secure. Our legislature recently approved increases in our budget to enhance cyber security and fraud prevention to address this concern.   

When you look back on your career, what was the most memorable aspect of working at DRS or your proudest accomplishment?   

After working at other state agencies, what distinguished DRS for me was the nature of the mission: it is a positive experience to pay people the benefits that they earned while in public service.    

Thinking back on accomplishments, there is one that really stands out for me. I was part of a multi-agency team set up by our governor at the time to review both the effectiveness and sustainability of state benefits. It was rewarding to see elements of our proposal passed by the legislature and, eventually, upheld by our state supreme court.    

What do you have planned for life after DRS?   

Since I've been working in state government for over 40 years now, with most of that time spent in roles that involve the state’s budget process, I’ve been tied up during the winter months. One benefit of being so busy with legislative session is that you “miss” a lot of the gray, rainy weather outside, but that can also impact holiday time with family.   

It’s almost time to let someone else enjoy the rewarding aspects of my job (which includes CEM) so I can enjoy even more fun with my family. Regardless of whether it’s in my role as husband, dad, son or brother, there’s a lot for me to look forward to. 

Peer Intelligence | Spring 2024