Pension Reform

Issues Update

Sacramento Bee Dan Walters Misinformed About CalPERS
August 10, 2010
Dan Walters recently accused CalPERS of a dereliction of fiduciary duty on “a massive scale.” While CalPERS recently has had to face a number of challenging problems, this is an unfair charge. CalPERS has never failed to meet its fiduciary duties to its members, and its 2,300 employees are devoted to fulfilling our mission of retirement and health security for our 1.6 million current and retired public servants.

Regarding recent headlines, please remember that it was the current leadership at CalPERS that launched the initial investigation of the placement agents controversy. Attorney General Brown praised us for our “full support and assistance.”

It was also CalPERS that adopted strict new placement agent disclosure policies and is pushing for tough legislation to prevent abuses in the future. We were notably aggressive in restoring $165 million in questionable fees.

Mr. Walters has also repeated incorrect claims that it was CalPERS that was primarily responsible for the controversial benefit increases in 1999. While CalPERS proposed the change, it was the subject of numerous public meetings. CalPERS actuaries prepared scenarios of what would happen if the market value of assets dropped significantly, and that information was part of the public record. This information also was widely distributed to policy makers by the Director of the Department of Personnel Administration. The Los Angeles Times even reported the annual cost of SB 400, and the California Taxpayers Association wrote a letter based on our data to every legislator reminding them that the employer’s cost could rise sharply if the markets declined.

As is well known, CalPERS also has suffered severe losses in the market downturn. It is unfair to blame CalPERS for failing to prevent the worldwide collapse of financial markets. But more importantly, what about our notable successes? We earned an 11.4 percent return on our investments last fiscal year, and an impressive 7.9 percent over the last 20 years even taking into account the financial collapse.

Finally, everyone is concerned – CalPERS included - about the City of Bell compensation controversy. The salaries of top level city officials there were obviously egregious and excessive abuses. These abuses should have been stopped much earlier. But let’s be clear; local elected officials in cities, counties, and special districts set the salaries, benefits and compensation for their executives. Even though the regulation of municipal salaries is not the responsibility of CalPERS, members of our Board have already expressed their intent to create greater transparency and make sure these types of abuses do not occur in the future. And our entire Board will take up this issue at its meetings later this month.

It is time to recognize that despite its past problems, CalPERS is pursuing our fiduciary duty with utmost concern for our members, employers and taxpayers. Whatever comes our way, we will deal with the issues in an honest, ethical and accountable way. That you can count on. As Governor Schwarzenegger said at a recent roundtable – “it’s time to end the blame game” and start focusing on solutions.

Sincerely,




Anne Stausboll
Chief Executive Officer









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