California Supreme Court Ruled CalPERS in Violation
The California Supreme Court has ruled that CalPERS violated several state laws. The decision also extends to CalSTRS, the nation’s 3rd largest pension fund.
According to the press, the justices let stand a January appeals court ruling in a lawsuit brought by former state Controller Kathleen Connell who had challenged the authority of the pension fund’s 13-member board to boost salaries for about 30 investment managers.
“This is a significant setback for Calpers, its members and all public pension systems in California,” said CalPERS spokesman Brad Pacheco. “It cuts through the hearts of our ability to attract and retain investment staff of the caliber needed to generate investment returns and to minimize costs.” However, for the near term CalPERS will circumvent the ruling, allowing the investment managers to keep their jobs and current salaries using a paper shuffle. Pacheco said Calpers would put the managers in temporary positions for the remainder of the year. “If we didn’t have in-house managers we would have to rely on outside managers who would be more expensive and the cost would be borne by taxpayers,” Pacheco said. Continue Reading →