USA - Californian Assemblyman Keith Richman has made several damning comparisons between the CalPERS board and those involved with the San Diego pensions crisis, even calling on attorney general Bill Lockyer to comment on whether the fund's actions regarding retroactive benefits violated its constitutional and fiduciary duties.
Richman’s office claimed there were similarities between the CalPERS board’s actions and that of the Kroll report findings, which claimed San Diego city’s fiscal crisis was caused by unlawful deals and disregard for the financial well-being of residents.
Among the accusations, Richman’s chief of staff, Daniel Pellissier, claimed the US$205bn fund had “broken the limits of fiduciary responsibility, spiked the actuarial valuation of the portfolio, made false and misleading statements” to members and also had a conflict of interest.
But in a statement sent to Global Pensions, CalPERS said the assemblyman’s conclusions were “wrong”, and added: “We look forward to providing information to the attorney general’s office that will resolve this matter.”
Attorney general Lockyer’s office declined to comment in detail on the issue, but con-firmed it had received “a request from assemblyman Richman for an opinion on whether CalPERS’ actions regarding retroactive benefits violated its constitutional and fiduciary duties”, and that the opinion was “under review”.
On the decision to contact the attorney general, Pellissier said: “We have been having trouble getting folks to provide information, and the attorney general has the ability to get information from all sides and take a legal look at what has been happening. It was the Kroll report that focused legal fiduciary lens on the action of [San Diego’s] pensions board, we want the same lens to be focused on CalPERS.”
Pellissier added he was “certain” California's largest fund would have a strong response to Richman’s call.
“The question is how that response will compare to the pretty solid case that was made in the Kroll report, that these types of activities violate fiduciary standards,” he said, adding that while CalPERS would be right in saying it
had the right to make its own decisions, “those decisions are not immune from constitutional test.”
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