The board of California Public Employees’ Retirement System is apparently going through some serious drama right now as members air their grievances with one another publicly. Questions about how much the CalPERS board spat will affect their ability to manage state workers’ retirement money are now lingering as the state senate killed the bill that would have allowed employees to opt out of the public pension fund and take their retirement money elsewhere. There truly is no escape for California workers who are concerned about their retirement funds being controlled by people who are distracted by infighting.
CalPERS board members at war
The spat between board member Margaret Brown and board President Priya Mathur has been gradually spilling out into the public eye over the few months. Taking time to read all of the news coverage about the situation involving the CalPERS board turns up some very interesting tidbits that you’ll miss if you don’t.
The Los Angeles Times characterizes the battle in the CalPERS board as childish, and at first blush, it certainly looks like adults acting in petulance. Brown accuses Mathur of purposely locking her out of her office at CalPERS for an extended period of time, and she even went so far as to post a video about it on YouTube. In the short video, she showed how her badge doesn’t open the office door and states that it was the end of day two of her lockout.
That was just the latest shot fired in the squabble involving the CalPERS board. The Sacramento Bee reported over the weekend that Brown has now retained an attorney to handle her communications with the rest of the CalPERS board. She also reportedly canceled a meeting that had been scheduled with Mathur.
However, the financial blog Naked Capitalism strongly takes Brown’s side in the squabble with Mathur, emphasizing that the lockout has gone on for an extended period, rather than just being a one-time issue. Mathur has also restricted Brown’s access to documents and transcripts she feels the need to go through so that she can better understand the issues facing the CalPERS board, fueling questions about how much the infighting will negatively impact the board’s ability to manage the $350 billion public pension fund.
Multiple issues with CalPERS management
Brown told the Bee in an email that the rest of the board has been treating her as an outsider since she was elected in place of an incumbent board member who had been endorsed by almost every member at the time of the election. During the election campaign for the board see Brown currently holds, her opponent highlighted claims that Brown created a hostile work environment while at the San Ramon Valley Unified School District, The Bee reported last year.
Clearly, there’s plenty of blame to go around here. CalPERS is the largest public pension fund in the U.S., and to have its board members airing their disdain for each other publicly — even on YouTube — should be raising more than a few eyebrows. Unfortunately, this isn’t even the only problem with CalPERS management.
Earlier this month, The Los Angeles Times blasted the pension fund for not taking questions about CalPERS Chief Financial Officer Charles Asubonten’s resume seriously. The pension fund downplayed the questions about whether his past work experience had been exaggerated, which were raised by Naked Capitalism. Asubonten describes those questions as a “character assassination,” but the Times poured extra fuel on the fire and called for answers again.
Additionally, despite its massive size, CalPERS is no longer fully funded, as it faces the same deficit problems other public pension funds are facing right now.
No escape from CalPERS for state workers
Meanwhile, state workers in California who would rather shift their retirement funds away from the public pension fund managed by a dysfunctional board and over to a defined contribution plan handled by someone else won’t be able to make the switch. The California Senate Public Employment and Retirement Committee rejected a bill that would have allowed state workers to do that.