US - Vocal CalPERS president Sean Harrigan (pictured), a union official who has headed up strong corporate governance efforts during his tenure, has been ousted from his post and replaced by board member Ron Alvarado.
In a 3-2 vote, the California State Personnel Board yesterday replaced Harrigan as its representative to the US$177bn California Public Employee Retirement System – the biggest pension fund in the US.
Alvarado, who served as the Board representative prior to Harrigan, will take up the position on January 1.
During Harrigan’s leadership, CalPERS was a key voice behind calls to oust Walt Disney Co. chief executive Michael Eisner and Safeway Inc. chairman Steven Burd.
According to Reuters, critics of Harrigan were unhappy with his approach to the leadership, claiming he put his political agenda ahead of the interests of shareholders. But supporters allege California governor Arnold Schwarzenegger and the personnel board folded to corporate pressure and Republican lobbying in ousting Harrigan.
Since yesterday’s vote, activists have voiced concern that the move demonstrates a broader effort to change the leadership of US pension funds and a Republican push to restructure the traditional CalPERS’ defined benefit pension fund as something similar to a 401(k) plan.
Richard Ferlauto, director of pension investment for the American Federation of State, County and Municipal Employees, told the New York Times Harrigan’s removal marked a wider push to place CalPERS’ money – currently in the hands of a board controlled by Democratic trustees – in projects more in keeping with Republican ideals.
“Clearly, we’re seeing a Republican attack on public pension systems,” he told the Times. “There will be a legislative attempt this spring to mandate that all plans in California become defined-contribution plans.”
Harrigan reportedly said in a statement after the vote that he was “saddened” to end his involvement in “restoring much needed integrity and accountability to our capital markets”.
Harrigan could not be reached for comment at the time of going to press.
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