New CalPERS leaders don’t trust each other. Will their feud hurt members?
The board that oversees the nation’s largest public pension fund will get at least three new faces in 2019, marking unusual turnover at the California Public Employees’ Retirement System.
Two of the newcomers were decided in recent elections. Gov. Jerry Brown this week created a third vacancy when he removed CalPERS board member Richard Costigan from the pension fund.
Costigan, a lawyer and former legislative director for Republican Gov. Arnold Schwarzenegger, had served on the CalPERS Board of Administration as a Brown appointee since 2011.
He held a seat reserved for a member of the State Personnel Board. Brown replaced him on the State Personnel Board, which means he also cannot serve at CalPERS.
Costigan was one of the more outspoken CalPERS board members, sometimes rebutting criticism of the pension fund in editorials and at public forums.
“I want to thank the incredible board members and staff of @CaliforniaSPB and @CalPERS for the memories, friendship and camaraderie – it was a honor, privilege and inspiring opportunity to work along side all of you in service to our great state of #California – Thank you!” he wrote on Twitter Thursday night.
Mona Pasquil Rogers, Brown’s appointments secretary and a Democrat, will replace Costigan at the State Personnel Board.
Pasquil Rogers does not necessarily get Costigan’s seat on CalPERS. The State Personnel Board, which oversees statewide human resources polices, has to vote on which of its members it wants to place on CalPERS.
CalPERS is considered underfunded because its assets are worth about 70 percent of what it owes to government employees and retirees.
The board over the past three years took a series of votes that led to it charging local governments more money to fund pensions. Those decisions made CalPERS more stable, but have heightened financial pressures on cities, counties and utility districts.
One of the board’s closest votes last year took place in January when it appointed longtime CalPERS board member Priya Mathur to be its president, succeeding former President Rob Feckner.
Union-supported CalPERS members and the two statewide elected officials voted for Mathur, while Gov. Brown’s appointees and two members who won election with support from retiree groups voted against her. That gave Mathur a 7-6 advantage.
The board this month is expected to pick a new president.
Tim Behrens, president of California State Retirees, views the turnover “as a positive change.”
“The board members that have turned over didn’t always act like it was their job to protect the shareholders’ money at CalPERS,” he said.
Neil McCormick, chief executive of the California Special Districts Association, released a statement on Friday thanking Costigan for his time on the CalPERS board. The group represents hundreds of utilities, water districts and special services districts that contract with CalPERS for retirement plans.
“Throughout his tenure on the CalPERS board, we enjoyed an excellent working relationship and we wish him all the best in his future endeavors. CSDA also looks forward to continuing the positive relationship we have established with the CalPERS board,” McCormick said.
CalPERS has $337 billion in assets and is overseen by a 13-member board of administration. Six of the members are chosen by government employees and retirees. Two are statewide elected officers. One is appointed by the Legislature and four are appointed by the governor.
Ma will take one of the two seats on the CalPERS board that are reserved for statewide elected officials, succeeding Treasurer John Chiang. Chiang has served on the CalPERS board since 2007, when he was first elected state controller.
Perez won an upset victory in a CalPERS election in October, defeating Mathur. Mathur, a BART financial analyst, had served on the CalPERS board since 2003.
A fourth seat on the CalPERS board could open in 2019. Bill Slaton, a former director at the Sacramento Municipal Utility District, holds a governor appointee position representing local government employers.
Slaton’s last term on the SMUD board of directors ended in December. He’ll remain on the CalPERS board unless Gov.-elect Gavin Newsom appoints someone else to the local government seat.