California Public Employees’ Retirement System (CalPERS) Board President Henry Jones is keeping his seat on the pension system’s board after resoundingly beating opponent J.J. Jelincic, who had been critical of CalPERS’s investment policies.
Jones, a retired Los Angeles school system chief financial officer, captured 66% of the vote to Jelincic’s 34%, show CalPERS statistics.
Jelincic had previously served on the CalPERS board for eight years and was an investment officer at the pension system for 33 years.
Around 116,000 of the 600,000 eligible retirees participated in the election that was conducted over the last month. Jones will begin a new four-year term effective January 16, 2020.
Candidates often run unopposed in the normal sleepy world of US retirement board elections. That wasn’t the case this time for a seat on the 13-member board. The election for the non-paid CalPERS seat attracted record campaign expenditures. California campaign finance records show that a coalition of labor unions supporting Jones spent around $450,000, while Jones raised more than $50,000 in additional contributions. Jelincic raised around $45,000.
Jelinicic, a constant critic of the CalPERS administration, had argued throughout his campaign that the retirement system needed to be more aggressive in its investments to make its expected 7% yearly rate of return. He also criticized the retirement system administration for discussing investment matters in closed sessions.
The $280 billion pension system is approximately 70% funded.
Jelincic accused Jones during a debate last month at CalPERS headquarters in Sacramento of becoming “the puppet of management and not its monitor.”
Jones didn’t directly attack Jelincic’s investment qualifications. Instead, he emphasized his role in helping steer CalPERS to better financial health in the years following the great financial crisis, when the pension system lost around 25% of its assets.
Jones cited accomplishments that he helped implement in recent years, such as a new asset allocation that puts less emphasis on equities and a CalPERS liquidity account that sets aside money in case financial markets severely drop, so the pension plan doesn’t have to sell assets to pay benefits.
Investment discussions were only part of the campaign because union groups supporting Jones put a focus on a 9-year old sexual harassment complaint against Jelincic.
A California administrative law judge found back in 2011 that there was merit to claims that Jelincic had harassed three women while serving as a pension plan investment officer. The women had accused Jelincic of making comments about their appearance.
Jelincic has repeatedly apologized for the incidents and said he didn’t mean to offend anyone, but during last month’s debate, Jones said the apology was a little bit late.
“Mr. Jelincic should have apologized back in 2011 rather than almost a decade later for his actions because they are unacceptable in the workplace in California or in the United States,” Jones stated.
Jelincic responded at the debate, “I would point out that it was not even alleged that I touched anyone, propositioned anyone, smelled anyone’s hair or even ask them to join me for a cup of coffee.”
He did say that he complimented one woman’s shoes. “I did not intend to offend her. Obviously, I did. I apologize for that. The management of CalPERS and the SPB (State Personnel Board) both decided that a letter of reprimand was appropriate. That has happened and the matter was closed.”
Referencing the Me-Too Movement, Jelincic said, “I do recognize that times have changed and I’m sorry to have offended.”
However, the sexual harassment charges have dogged Jelincic throughout the campaign thanks to the coalition of unions who have helped fund Jones’ campaign.
Retirees eligible to vote in the CalPERS election received a campaign mailer that appeared to come from State Treasurer Fiona Ma. The mailer actually came from a political action committee that was funded by key local affiliates representing the State Service Employees International Union and other labor groups.
They included SEIU Local 1000, the California Correctional Peace Officers Association, and the California Professional Firefighters.
In the mailer was a letter that Ma, State Sen. Connie M. Leyva, and CalPERS Vice President Theresa Taylor had written. They asked Jelincic to resign from the race because of the harassment charges.
Ma serves on the CalPERS board as part of her responsibilities as state treasurer.
Both Ma and Taylor supported Jones’ candidacy.
Jones said at the debate that he had nothing to do with the mailer and he was legally not allowed to contact any organization conducting an independent expenditure on behalf of his campaign.
“I’m sorry if anyone felt misled by the envelope of the mailing,” he said, “The letter, however, is entirely factual.”
In response, Jelincic said he did respond and apologize back in 2011 for violating the zero-tolerance policy.