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Editorial: A missed chance to make CalPERS less conflicted

Published: Saturday, Feb. 2, 2013 - 12:00 am | Page 8A

Gov. Jerry Brown's pension reform agenda included increasing the independence and expertise of the California Public Employees' Retirement System's board of trustees. Unfortunately, last year's exhaustively debated pension bill did not include any changes to the makeup of the CalPERS board.

So, the board that oversees the $253 billion government retirement fund remains dominated by organized labor. In the past, the board has lobbied recklessly to enhance benefits for government retirees to levels so rich they have placed the state and many local governments in fiscal jeopardy.

That's why the recent appointment of private labor union official Ron Lind to the CalPERS board is so worrisome. Lind, president of the United Food and Commercial Workers Union Local 5 in San Jose, led last year's 10-day strike against Raley's, the struggling West Sacramento-based grocery chain.

Senate President Pro Tem Darrell Steinberg famously walked the picket line at Raley's with Lind's union members. Assembly Speaker John A. Pérez and the Senate Rules Committee chaired by Steinberg appointed Lind to the CalPERS board. Neither Steinberg nor Lind returned our calls, but a spokesman for Steinberg called Lind's background "impressive," noting that as a trustee for his own union's pension plan, Lind has "fiduciary experience."

Here's what ought to worry taxpayers about the appointment. In a memo to his union staffers Lind stated, "My appointment to this position is the culmination of a multiyear campaign by the International Union. Decisions around investments totaling more than $100 billion can clearly have an impact on UFCW members as well as the rest of the labor movement."

That statement suggests that Lind is planning to use his position to "impact" his union and "the labor movement," but that's not his job. As a member of the CalPERS board, Lind's fiduciary responsibility lies with beneficiaries of the pension fund, specifically with state and local government workers and retirees, not with his private union members or with labor as a whole.

Beyond Lind's own statement, there's a worrisome precedent for this appointment. Two UFCW officials sat on the CalPERS board in 2004, at a time that the union was embroiled in another bitter strike, this time with Safeway. During that period, CalPERS officials publicly berated Safeway management for failing to settle with its workers.

CalPERS went so far as to lead a shareholders' revolt to dump Safe-way's top managers. It failed, but it raised obvious questions about conflicts of interest on the CalPERS board and the board's pro-labor political slant.

The role of the pension board is to make decisions that protect and enhance the financial interest of the fund and its beneficiaries. It is not to put its thumb on the scale in favor of workers in a labor dispute.

Does Lind understand that? Does Steinberg?

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