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Benefits February 2, 2005
Pension Fund Group Opposes Proposed California DB Pension Reform
February 2, 2005 (PLANSPONSOR.com) - A group of
large institutional investors and others has come out against
California Governor Arnold Schwarzenegger's plan to reform
the state's pension plan, saying that the move is part of a
broad counterattack against corporate reformers.
Reported by Kip McDaniel
A group that includes California State Treasurer Phil Angelides, New York Comptroller Alan Hevesi, North Carolina Treasurer Richard Moore, and corporate governance expert Nell Minow has come out against any move to privatize California’s pension system, saying that his plan is part of a “national battle” in which Schwarzenegger is counting on funds from outside the state to help him win.
In addition , officials from the California Public Employees’ Retirement System (CalPERS) and the Oregon pension systems came out against Schwarzenegger.
The group contends that it is being targeted because of its active support of corporate reform in the wake of the WorldCom and Enron scandals. Schwarzenegger and others such as the Howard Jarvis Taxpayers Association are fighting group member because of their ability as large institutions to wield power in the marketplace over corporations through proxy voting and other methods, according to the group (See Running the Fund: Clear Conscience? ).
Calls for reform have been coming from both state legislators (See Assemblyman Floats DC Plan for Golden State Employees ) and Schwarzenegger (See Schwarzenegger Supports CalPERS Overhaul Efforts ), who think that the state’s plan is a financial burden and does not provide workers with flexibility.
“Public pension funds have taken a leading role in restoring honesty, integrity, and openness to our nation’s financial markets after corporate scandals shook the very foundations of our financial institutions, damaged our economy, and harmed millions of Americans,” said Angelides in a statement. “Now Governor Schwarzenegger wants to break these powerful voices of corporate reform into literally millions of pieces, cutting people loose to fend for themselves in the marketplace.”
“The risk to the American economy is not from reform-minded public pension funds,” added Hevesi in the statement. “It is from corrupt corporate managers who imposed a huge cost on every American. Because of the corporate scandals, investors lost billions, retirees lost pensions, workers lost jobs and taxpayers paid higher taxes and faced cuts in services.”