CalPERS president removed from post. From the story,
“The ouster of the president of California’s public pension fund has raised questions about whether pension funds, endowments and other big activist investors will be able to keep wielding clout in corporate governance campaigns.”
This is a “tip-of-the-iceberg” story with vast implications. CalPERS is the pension fund for public employees in California. It had an activist management that was trying to help clean up corporate corruption. The large corporations got together and have succeeded in getting the fund’s management changed.
“Richard Ferlauto, director of pension investment for the American Federation of State, County and Municipal Employees, said Harrigan’s ouster was an early success in a campaign to wrest control of pension money from a CalPERS board now controlled by Democratic trustees and put it to work in projects more in keeping with Republican ideals.
“Clearly, we’re seeing a Republican attack on public pension systems,” Ferlauto said. “And California has been targeted in a very strong way.”
Public pension plans have been one of the few remaining avenues for exerting public pressure on corporate behaviour — it’s not just CalPERS that’s a target.
The story suggests that they’re also going to work now to get rid of employer-paid pensions and replace them with employee-paid pensions:
“Ferlauto said he thought that if Republicans could regain control, they would seek to make two fundamental changes: put an end to the corporate activism CalPERS has engaged in, and reshape the traditional, defined-benefit pension fund as something more akin to a 401(k) plan. [emphasis added – dj]”
401K means instead of THEY pay, it is YOU pay. That’s the big bait-and-switch that was pulled under Reagan – convincing people to accept 401Ks – which really meant the end of employer-paid pensions, and rechanneling all the cash that had been set aside for pensions into the pockets of the top 1%.