U.S. Chamber of Commerce - Dec 1 - U.S. Chamber Applauds CalPERS Changes

Wednesday, December 1, 2004

U.S. Chamber Applauds CalPERS Changes
Chairman’s Removal Provides Hope for California Retirees and Shareholders

WASHINGTON, D.C. – The United States Chamber of Commerce today praised the decision of the California State Personnel Board not to re-appoint Sean Harrigan to serve on the California Public Employees’ Retirement System (CalPERS) Board and expressed optimism that the change would lead to broader reforms at CalPERS and other public pension boards across the country.

“Under Harrigan’s Chairmanship CalPERS has been a glaring example of the way organized labor hijacks public pension boards to advance its own agenda at the expense of shareholders,” said David Hirschmann, Chamber senior vice president. “When special interests are allowed to trump shareholder interests, everyone loses – retirees, workers, investors and companies.”

CalPERS, the nation’s largest pension fund, has withheld proxy votes for the directors of 2,700 public companies on the basis that their poor corporate governance helped contribute to weaker stock performances and the subsequent decline in the value of the board’s portfolio. CalPERS own governance and investment practices, including its lack of transparency, have come under question.

The CalPERS portfolio has suffered because of irresponsible investment decisions and inflated estimates on future returns by the CalPERS board itself, according to the Chamber. The union-dominated board has strayed from its inherent responsibility of providing economic security for California’s retirees, instead using its clout to improve the position of labor and union leaders at the negotiating table, an alarming trend that has spread to other funds.

“This is a good first step toward ensuring that California taxpayers will no longer be forced to pay the tab resulting from faulty investment and management decisions of their public pension fund,” continued Hirschmann. “CalPERS fails to follow many of the governance standards it regularly recommends to others.”

The U.S. Chamber of Commerce is the world’s largest business federation representing more than three million businesses of every size, sector and region.

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