CalPERS President Rejected by Public Employees for Playing Politics with Savings

October 8, 2018

In a stunning rebuke of the status quo, Priya Mathur lost her bid for reelection as the president of the board of administration of CalPERS to a police officer who ran on a platform rejecting the pension’s focus on political issues. Mathur will soon be replaced by Jason Perez, who emphasized the need for the pension fund to focus on maximizing returns and slammed CalPERS’ political activism.

In a campaign video to public employees and retirees Perez stated:

“Mathur has failed CalPERS and put our retirement security at risk due in part to Environmental, Social, and Governance investing priorities regardless of the investment risk.” (emphasis added)

This statement is in line with a report that was released by the American Council on Capital Formation, which studied how CalPERS arrived at its current predicament of being drastically underfunded. The report found that prioritization of political and social criteria was hurting performance.

Amid reports of poor performance and a controversial CEO, Perez noted that people are losing trust in the institution to properly manage their savings:

“CalPERS’ recent survey shows that stakeholder trust in CalPERS has plummeted almost 20 percent in one year.”

Perez also expressed frustration with Mathur’s proclivity to act like a politician, instead of a board member responsible for overseeing the management of the pension fund:

“Mathur is out of touch, believing her role is to fly around the world, ringing the bell of the London stock exchange, and hobnobbing with United Nation officials.”

Conversely Perez emphasized:

“My only job is to secure our pensions.”

Californians are taking notice of this positive development. Today, the editorial board of the San Diego Union-Tribune wrote:

“…CalPERS’ board has used investments to make political statements, banning consideration of tobacco companies and pushing investments in what one business-backed nonprofit has called “questionable” green energy projects over firms involved with fossil fuels. A 2016 report said the tobacco ban alone had cost CalPERS $3 billion.

Thankfully, rank-and-file CalPERS members finally have grasped that this approach works against their long-term interests.”

Perez’s leadership on CalPERS’s board is a positive step in the right direction for the pensioners who rely on prudent fiscal management of the fund. Pension fund leaders around the country who focus on political issues instead of maximizing returns should take note of this development.

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