(May 21, 2010) — The 13-member board of the $209.1 billion California Public Employees’ Retirement System (CalPERS), which is free to decide how much state government and school districts contribute, postponed a vote on seeking an additional $600.7 million contribution.
“An additional $600 million burden on a state budget that has a $20 billion deficit is imprudent on our part,” California State Treasurer Bill Lockyer told fellow board members, Bloomberg reported.
The demand for an increase stems from a 24% drop in the value of CalPERS’ fund in the past fiscal year, with fund managers deeming as increase in contribution from the state necessary. To help mitigate the budget gap, Governor Arnold Schwarzenegger has called for ending welfare programs and most day-care subsidies. Additionally, Schwarzenegger has said pension raises in 1999 by Democrats cost too much and has instructed lawmakers retract them.
The board was set to increase the amount the state must pay as its share of retirement costs by 18% to $3.9 billion in the fiscal year that starts July 1. This year, the state contributed $3.3 billion. According to Bloomberg, the board directed the fund’s actuarial staff to analyze the impacts of delaying the increase for a year and will consider whether to seek the increase or postpone when it meets next in June.
In other news, the fund recently censured a board member, Priya Mathur, for “serious lapses” of responsibility to make required financial disclosures. The commission fined Mathur $4,000 for filing her 2008 form nine months late, voting unanimously to censure her while suspending her leadership of the Health Benefits Committee and her official travel privileges until December 1, the Los Angeles Times reported.
The censure comes shortly after California’s attorney general filed a civil suit against two former top CalPERS officials — former Chief Executive Fred Buenrostro and Alfred Villalobos, a former board member — for accepting trips, champagne and other gifts from a businessman working to obtain investments from the fund.
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