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CalPERS Approves Increase in Contribution to Annual Fund

Despite the protests from the Schwarzenegger Administration, the CalPERS board has approved a small increase in the state's annual contribution to the fund.

The SacBee writes "Schwarzenegger wants the state's payment to CalPERS to jump by at least $1 billion next year, to begin paying down the fund's big investment losses. But because the CalPERS board chose to raise the rate by only $200 million, Schwarzenegger will now have to hash the issue out with the Legislature, where the Democrats appear reluctant to go along with the higher payment."

Read more in the SacBee.

CalPERS Employee Wins Seat on Board

J.J. Jelincic, a former president of the California State Employees Association, has won a seat on the CalPERS governing board, and is looking to make some changes. Jelincic was able to beat out the SEIU backed candidate, Cathy Hackett, and is himself a CalPERS employee -- which is a bit unusual. 

Jelincic, who is an investment manager, would like to see more of CalPERS' investing managed in-house, presumably by his own colleagues.  The impetus behind this move is not only the staggering losses incurred by the firm under outside management, but also the bonuses and other fees that those managers are paid. 

As for how he plans to address the apparent conflict between his job and his service on the board that oversees it, Ed Mendel of CalPensions.com writes "He [Jelincic] thinks there are at least three options: be placed on leave, split time equally between the job and the board, or go on loan to another agency."

Read more from CalPensions.com or the SacBee.

Ed Boards Unload on CalPERS Over the Weekend

Editorial writers across California took cuts at the CalPERS pinata over the weekend.  The pension fund, which is coming off its worst year ever and a loss of over a quarter of its assets, is under fire for everything from poor foresight to bad PR.  As the San Diego Trib wrote: "Events have taken a series of nightmarish turns of late for the giant California Public Employees’ Retirement System."  The Trib goes on to lambaste PERS for "ignorant arrogance."

Elsewhere, the LA Times wonders aloud whether PERS' "hands are clean," and breaks down the pay-to-play allegations surrounding some of its current and former investment managers.

And, on the reform front, the SacBee prodded PERS to get on board with the California Foundation for Fiscal Responsibility's proposed ballot measure that would overhaul state and local pension plans.

Finally, Dan Walters takes a look at those same reform proposals, and finds the above mentioned issues facing PERS are likely to spur big changes.

Forum on Public Pensions Next Week in OC

The Orange County Division of the League of Cities is holding a forum on "Understanding the Benefits and Challenges to California’s Public Pension System" next Thursday (the 12th) in Costa Mesa.  There's a pretty solid lineup, not the least of which is the moderator -- CityNews' own Robb Korinke! 

• Reed Royalty, President, Orange County Taxpayers’ Association
• Bruce Channing, City Manager,City of Laguna Hills
• Ron Cottingham, President, Peace Officers Research Association of California (PORAC)
• Marcia Fritz, President,California Foundation for Fiscal Reform
• Brad Pacheco, Assistant Division Chief,California Public Employees Retirement System (CalPERS)

If you're in the neighborhood, register to attend.

New Options Coming Online for Retiree Health

CalPERS just got a little healthy competition, from San Bernardino County.  New state legislation allows San Bernardino County's retirement system to market an alternative to a two-year-old CalPERS retiree health fund.

Writes Ed Mendel:

"So, what does a comparatively small 30,000-member system, with about $5 billion in assets, have to offer that can’t be provided by a giant 1.6 million-member system, with $197 billion in assets, the nation’s largest?"

"The San Bernardino system said smaller can be a good thing: lower overhead, leaner, with an opportunity to be more efficient and responsive. Previously, local governments only had two choices for their investments: CalPERS or Wall Street."

Read more from Mendel at CalPensions.

LA Loses 6th Pension Exec in as Many Months, New Legislation to Blame?

Eric Holoman, the president of LA's largest public pension system, resigned last week, and is the 6th such executive to do so in as many months.  This is leaving LA's underfunded pension systems in crisis mode, and new legislation designed to prevent "pay-to-play" scenarios may be the root cause of it all.

The Governor signed a new law this session which places strict limits on the private investment activities of those in charge of public pensions.  Many of the restrictions seem to make sense on their face, but taken together with some of the more strict measures, we may be looking at yet another barrier to getting bright, motivated individuals into public service.

Read more in the LA Times.

Wall St Journal Sees Pain for Cities in CalPERS Losses

With a $50 billion loss in the last fiscal year, the Wall St Journal is reporting, correctly we're afraid, that much of the burden to back filling the fund will fall to cities.  "The bottom line from my point of view is that just about the time we will start to see a recovery in 2011, we are going to have this huge additional cost," Fullerton City Manager Chris Meyer told the Journal.

Ugh.  There's also the pesky issue of a former board member earning $50 million securing investments from CalPERS as a "placement agent."  Not that's a revolving door.  Read more on that little piece of business from the SacBee or read the WSJ piece here.

Guv Signs and Vetoes

The Governor relented on his mass veto threat this weekend.  Citing progress on water negotiations, Schwarzenegger got the pen out and started signing on the dotted line. 

His total for the session stands at 632 new laws approved this session -- which sounds like a lot until you hear it makes him the "stingiest" Governor for signing bills in recent history.  His signing totals have declined in each of the last four years, but he's still not the Veto King -- that still belongs to Deukmejian, who axed 436 bills in 1990. 

Most importantly, if you wanna know what wasn't on the list of bills for the Governor to consider -- Prop 1A securitization and HUTA clean up language.  It's alleged that the Senate is coming back to finish up that piece of business this week.  

And back to the raw numbers of bills, for those of you wishing for a bygone era in which the legislature was less concerned with passing hundreds of bills, Dan Walters reminds us that in 1967, Reagns first year as Governor, the legislature passed over 1,700 bills, and the Guv vetoed just 83 of them.

Get a full list of the signed/vetoed bills here.  LA Times has a good rundown of the major legislation here.

San Jose Doc Questions Cop, Firefighter Disability Claims

A city doctor in San Jose is gaining some notoriety as "Dr. No," largely for his conservative look at public safety workers' disability claims.  Dr. Rajiv Das "a board-certified specialist in occupational, pain and rehabilitative medicine who took the job in 2005, admits he's "a hardliner" who demands medical evidence to support a disability claim. But he insists he's fair and simply wants documentation before agreeing that an employee has limited capacity to do the job."

Now some officers would just as soon "Dr. No" move on to another line of work.  He has his backers on the council though, and even among the ranks of some public safety officials.  This could be  owing to an earlier Mercury News analysis of the city's 1,200 public safety retirees found "52 percent of former San Jose officers and 77 of firefighters were receiving disability pensions — rates that dwarfed those in nearby towns and other big California cities."

Read more.

SEIU Goes for Trifecta on CalPERS Board

Ed Mendel of CalPensions has a great look at the upcoming CalPERS board elections -- which are always hotly contested and thoroughly funded.  Mendel takes a look at how the SEIU has successfully backed recent candidates for the board, and is looking to make it three in a row.

Writes Mendel: "But if a candidate with Jelincic’s record of labor leadership and strong backing from other labor groups is defeated, the SEIU may cement its position as one of the most powerful forces in future board races, if not a kingmaker."

Read more at CalPensions.