We need more transparency in California’s public pension system | Opinion

Across America, public pension funds are investing hundreds of billions of taxpayer and worker dollars into private equity and private debt markets that operate largely behind closed doors. Retirees, taxpayers, public employees and even pension board members are increasingly being asked to trust a system that often refuses to provide full transparency about fees, risks, valuations, and investment performance.

That should concern everyone.

In California, lawmakers now have an opportunity to address part of this growing problem through Senate Bill 1319, the Private Equity Sunshine Act, authored by Sens. Maria Elena Durazo, D-Los Angeles, and Dave Cortese, D-San Jose. The bill would require greater disclosure of private equity fees, performance data, carried interest and benchmarking information involving public pension investments.

At its core, SB 1319 asks a simple question: If public money is being invested, why shouldn’t the public know how it is being managed?

This is not a partisan issue, nor is it an attack on pension systems. It is a transparency issue tied directly to fiduciary accountability and public trust.

Public pensions exist to provide retirement security for teachers, firefighters, police officers, nurses and other public servants. These funds are built on public money and public trust. Yet over the past two decades, many pension systems have shifted enormous amounts of capital into opaque Wall Street investment structures protected by confidential agreements and secrecy claims.

The problem is not limited to one state or one pension fund. From California to New York, pension systems have become deeply dependent on private equity firms that collect massive fees while shielding critical information from public view.

In many cases, taxpayers, retirees, beneficiaries and even pension board members responsible for oversight cannot fully see how much is being paid to Wall Street, how investments are being valued or whether the returns truly justify the risks being taken with retirement security.

Meanwhile, pension systems across the country continue to struggle with massive unfunded liabilities that place growing pressure on local governments, school districts and public services.

Supporters of SB 1319 argue that public pension investments should not be exempt from basic standards of transparency simply because they involve private market firms. Public employees and taxpayers deserve to know whether these complex investments are truly benefiting retirement systems or primarily enriching Wall Street managers through high fees and hidden arrangements.

Transparency is not anti-pension. Transparency is pro-accountability.

When pension systems resist independent audits, oppose oversight or fight disclosure requirements, they undermine confidence in the very institutions retirees depend upon. Public trust cannot survive indefinitely behind confidential agreements and redacted documents.

During my time on the Board of California Public Employees’ Retirement System, I saw firsthand how impossible it was to obtain clear answers about investment risks, private market practices, valuations and fee structures. Too often, legitimate oversight questions were treated as inconveniences rather than obligations owed to retirees and taxpayers.

That culture must change.

SB 1319 represents an important step toward restoring transparency and accountability to public pension investing. Californians should support reforms that bring sunlight to how retirement dollars are managed, how much Wall Street is being paid and whether these investments are truly serving the long-term interests of retirees and taxpayers.

The concern is broader than just investment returns. It is about transparency, risk, valuation practices, fees and whether pension boards, retirees and taxpayers have enough information to properly evaluate these investments.

Supporters of private equity often point to strong historical returns, but the full picture cannot be independently verified because private market assets are not priced openly like public stocks. Questions have also been raised nationally about valuation practices, benchmarking methods and the true impact of layered fees and carried interest on long-term performance.

In many cases, pension board members themselves face challenges obtaining complete information needed for meaningful oversight. SB 1319 is designed to help ensure that pension fiduciaries and the public can better assess whether these investments are appropriately balancing risk, return, cost and long-term retirement security.

Opponents of SB 1319 argue that private equity firms rely on confidentiality to protect proprietary investment strategies and that additional disclosure requirements could limit access to certain private market investment opportunities. However, SB 1319 does not require disclosure of trade secrets or proprietary deal-making strategies.

Opponents often claim that requiring greater transparency could scare private equity firms away from taking public pension money. That argument is absurd. Wall Street is not going to walk away from hundreds of billions of dollars in pension assets simply because taxpayers, labor and retirees want to know how much is being paid in fees, how investments are being valued and whether the returns justify the risks.

Public trust cannot depend on “just trust us.” When billions of public dollars are involved, transparency is not unreasonable, it is essential.

Margaret Brown is the state president of the Retired Public Employees’ Association of California.