US - The California Public Employees' Retirement System (CalPERS) has endorsed proposals to prohibit Board members and officers from accepting employment with business partners after leaving the fund.
The legislative bills, which are sponsored by California State Controller John Chiang, would impose a two-year waiting period on a Board member, administrator, executive officer, investment officer or general counsel of CalPERS or the California State Teachers' Retirement System (CalSTRS) from certain employment with the fund's business partners under certain circumstances.
Staff were directed to work with the sponsor and author on identifying appropriate amendments to the bill, which was put forward days after a damning independent report found evidence of corruption at the US's largest public fund. (Global Pensions: 15 March 2011)
"Given the serious issues involving placement agents in recent years, this bill represents an effort to ensure the investment integrity of pension funds," said CalPERS Board president Rob Feckner.
"In light of the recommendations stemming from the special review, I can't emphasise enough the importance for us to keep a critical eye on our governance and potential risks across our organisation going forward."
The Board also endorsed a second bill that would prohibit pension fund Board members, staff and consultants from accepting gifts valued in excess of $50 in a single calendar year from any entity doing business with or intending to seek to do business with CalPERS. The current limit for other statewide officials is $420 in a single calendar year.
"These new gift limits would apply to individuals who file Statements of Economic Interests," said George Diehr, Vice President of the Board. "Our staff will meet with the authors for some fine-tuning as both bills move through the Legislature."
Meanwhile, the CalPERS Board voted 7-3 to keep its assumed annual rate of investment return, also known as the discount rate, at the current level of 7.75%. Steve Coony, representative of the State Treasurer, Dan Dunmoyer and Richard Costigan voted against the motion, indicating they favoured the 7.50% rate recommended by the fund's actuaries. (Global Pensions: 16 March 2011)
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