Archive for the ‘CalPERS’ Category

Will CalPERS board shake-up continue this year?

April 8, 2019

A former CalPERS board member, J.J. Jelincic, plans to run against the new CalPERS board president, Henry Jones, as he seeks a fourth 4-year term on the board of the nation’s largest pension system.

Jelincic hopes to become the third challenger in as many years to unseat a CalPERS board member. He would join the two previous upset winners he supported, Margaret Brown and Jason Perez, as outsiders endorsed by retiree groups.

For more than two decades CalPERS board members were routinely re-elected. Then two years ago a union-backed board member, Michael Bilbrey, was unseated by Brown, a Garden Grove school facilities planner running to keep a critical eye on the board and staff.

Last year Priya Mathur, elected president by other board members in January, was defeated in her re-election bid last fall by Jason Perez, a Corona police sergeant who wants pension fund investments focused on high returns not social and political goals.

What would it mean if Jelincic is elected and joins Brown and Perez in a potential faction or voting bloc of board members elected despite union opposition?

“What it means is that, quite frankly, the staff is going to have to do a better job of explaining what they are doing,” Jelincic said last week. In his two previous terms, he said, some of his motions died for lack of a second, and there was no board discussion of the issue.

Six of the 13 CalPERS board members are elected by active and retired CalPERS members. Two are appointed by the governor, one by the Legislature, and four are office holders: state treasurer, controller, human resources director, and personnel board member.

The election of Jelincic, a former union leader, would seem unlikely to weaken the board clout of public employee unions, one of the most powerful political forces in the state. Most major CalPERS board clashes in the past have been with governors.

When Jelincic didn’t run for re-election two years ago, he said staff manipulation of the board, his original reason for running, was worse than he thought: “It is clear to me that this board has abdicated its responsibilities to challenge, monitor and supervise the staff.”

Jones

Jelincic

Jelincic said he is running this year because of board changes. Brown and Perez are not “rubber stamps” for board recommendations, he said, and Treasurer Fiona Ma and Controller Betty Yee are questioning some staff proposals.

A former member of the CalPERS investment staff, Jelincic has specific views of investment strategies, some recently expressed to the board during public comment periods. If elected, would he push for a big change in investment policy?

“I don’t think so,” Jelincic said. “One of the things they have done is become largely an index fund. I don’t see that changing. The index might change, or at least we are going to have a discussion about why you want to be a cap-weight index.”

Jones was a long-time chairman of the CalPERS investment committee before becoming board president in January, replacing Mathur. She was the first female CalPERS board president. Jones is the first African-American CalPERS board president.

In his campaign, the former investment chairman can point to years of leading and pushing for broad policy changes like a lower discount rate, shorter amortization periods, and reducing the risk of crippling investment losses.

Jones was an active chairman who led the development of “investment beliefs” to help guide decisions, now adopted by some other pension systems, and an evaluation system for investment consultants.

“I’m trying to make a difference so our fund is sustainable,” he said last week.

Jones also has an uplifting life story. He started as a janitor for the Los Angeles Unified School District in 1960, led some union drives, went to night school, earned a masters degree, and retired from the district 38 years later as the chief financial officer.

Now Jones again faces voters in a CalPERS board seat representing retirees — this time as the first CalPERS president in 25 years who represents retirees. While maintaining his fiduciary duty to all members, he said he keeps an eye on retirees.

“That’s why I fight so hard to challenge any kind of proposal that’s going to eliminate the COLA for the retirees, because they already are earning a retirement check that is considered barely meeting the cost of living,” Jones said.

Campaigning has already started. Jelincic received the endorsement of the Retired Public Employees Association last month. This week Jones and Jelincic are scheduled to interview for the California State Retirees endorsement on Friday, April 12.

Jelincic has an experienced campaign aide, Donna Snodgrass, an RPEA member who managed the Brown and Perez campaigns. Perez said the RPEA was one of his “biggest supporters,” even though retirees were not eligible to vote in the election.

Jones said he has seen criticism on social media of his trips abroad. With much of the $360 billion investment portfolio invested internationally, he said, the CalPERS investment chair should be meeting with foreign policymakers to stay informed.

In a one-on-one meeting with Indian Prime Minister Narendra Modi, he said he was able to discuss staff concerns about investment risk there. Jones said he paid for a golfing vacation in Scotland and for the airfare to a G-20 economic summit in Argentina last year.

Snodgrass said Jones stopped dropping by a CalPERS patio meeting of retiree representatives from a half dozen groups. He said it conflicted with investment committee meetings and followups, and he often attended retiree group leadership and chapter meetings.

As his opponents use these and other issues to argue the case for a change in the retiree seat, will Jones fire back and, in campaign jargon, “go negative” on Jelincic?

“I’m going to my members to talk about me, not about J.J.,” said Jones. “I’m going to talk about what I bring to the table. I’ve been an advocate for retirees for most of my life.”

An exception, he said, is Jelincic’s public disparagement of individual staff. The board reprimanded Jelincic for telling Pensions & Investments his former supervisor, Ted Eliopoulos, lacked the “temperament” and “management skills” to be CalPERS chief investment officer.

In his first year on the board, Jelincic was reprimanded by the CalPERS board for sexual harassment of co-workers, with words and suggestive looks. He was stripped of some committee posts and ordered to take sensitivity training.

Jelincic was accused of leaking confidential information from a closed-door board meeting and required to attend special training on open-government laws. He denied that he leaked the information, which remains formally unidentified because it’s confidential.

For this election, CalPERS sent voting information to nearly 600,000 members. Turnout for board elections is notoriously low, only 6.4 percent last year (16,875 votes out of 258,899 eligible) when Perez won the local government seat with 56.8 percent of the vote.

The total fiscal year cost of the election was $474,688, a report to the finance committee said last November. The cost per vote in the seat was about $29.22, up from $26.87 per vote in the previous election in 2014.

This year the candidate filing deadline for the retiree seat election is May 16. Ballots will be mailed Aug. 30, CalPERS said. Voting by mail, online or phone ends Sept. 30. If no candidate receives a majority, the two top vote-getters will move on to a runoff election.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Calpensions.com. Posted 8 April 2019


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