CA: Calif. Pension Plan Faces National Fight (CalPERS)

AP on Yahoo ^ | 2/2/05 | Jim Wasserman - AP

[NormsRevenge]

SACRAMENTO, Calif. - Democratic officials from five states launched a nationwide campaign Wednesday to fight Gov. Arnold Schwarzenegger (news - web sites)'s plan to privatize California's public pension systems.

California Treasurer Phil Angelides, who is leading the effort, called the Republican governor's proposal a major assault on the movement to reform corporate America following a wave of scandals.

Angelides said Schwarzenegger's plan "is part of a concerted effort to break apart the powerful voices of public pension funds that have stood up for ordinary investors in corporate boardrooms."

The attack came hours before President Bush (news - web sites) was to make Social Security (news - web sites) privatization a key theme of his State of the Union Address. It also signaled a major new partisan fight nationally over the future of public pension funds.

Schwarzenegger wants to make California's new public employees use 401(k)-style contribution plans after 2007.

Calling the state's pension system "another financial train on another track to disaster," Schwarzenegger said the state's obligation to its retirees had risen from $160 million in 2000 to $2.6 billion this year. The funds attribute the state's higher costs to market losses suffered from corporate collapses such as Enron Corp. and WorldCom.

The plan, if adopted, would greatly dilute the financial and political power of California's pension funds. The $182 billion California Public Employees Retirement System is the nation's largest.

Schwarzenegger spokesman H.D. Palmer accused Angelides of "giving hysteria and hyperbole a bad name," saying the governor's plan differs little from those used by many California businesses.

"We are trying to take the long view here, and trying to make sure California has a pension system that is sustainable for the long haul," he said.

Public pension funds have campaigned for curbs on executive salaries, boundaries between the research and sales departments of investment banks and new rules that allow shareholders to nominate their own company directors. That activism has triggered a growing backlash from corporate interests who say the funds have pushed too far into their operations.

Officials from New York, Oregon, Illinois and North Carolina are also part of the campaign.

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On the Net:

California State Treasurer's office: http://www.treasurer.ca.gov.

California Public Employees Retirement System: http://www.calpers.ca.gov

[Simmy2.5]

California Treasurer Phil Angelides, who is leading the effort, called the Republican governor's proposal a major assault on the movement to reform corporate America following a wave of scandals.

Viva La Revolution Comrade Angelides!

[BurbankKarl]

City of San Diego has been paying 100 dead retirees for who knows how long.