Sunday, February 13, 2005
Last Thursday, while I was composing my post about the value of California's state pensions as corporate watchdogs, Governor Schwarzenegger was composing a letter officially firing 4 of his appointees to the California State Teachers Retirement System (CalSTRS) board of directors. At a CalSTRS board meeting last week, the board rejected the Governor's proposal to shift from a defined-benefit pension plan to a 401K-style defined-contribution plan by a vote of 10-2, with all four of the Governor's appointees voting against the Governor's proposal. The board also rejected (by a vote of 11-0) a Schwarzenegger proposal to shift the pension contribution costs from the state to individual school districts. While I admire Governor Schwarzenegger's independence and welcome many of his ideas (such as independent redistricting), I think he is wrong on this issue. You would think that the Governor might pause to reconsider when his own appointees vote against his plan. There was no politics involved in their decision. It happens that of the 4 appointees, 2 are Republicans and 2 are Democrats. The 4 directors comprised a managing director of a capital management firm, a longtime banker with long board experience including appointments by the last 4 governors of California, a college economics professor, and the mayor of Santa Ana. I believe that these four were doing what they thought was best for the state pension and for the people that it serves. The Governor himself deemed these people worthy of appointment. He would do well to listen to the reasons that they voted against his recommendation, rather than impetuously firing them for their "disloyalty". In this case, saying "Hasta la vista, baby" to four responsible directors was not the right thing to do.
Posted by Tom Chatt at 10:36 PM