PERS Investing in Unicorns and Rainbows
The California Law Enforcement Officers’ Memorial Ceremony was fresh on my mind as I wrote this article. As always, it is a somber occasion filled with the grief and sorrow of family members, friends and colleagues over the passing of peace officers throughout the state. Consequently, the ceremonies are a source of reflection on the inherent dangers of our profession. Regardless of how long we have been officers and how invincible we believe we are, the ceremonies make us stop and think about our own mortality.
As the dignitaries were speaking, I began reflecting on those officers’ last thoughts and interactions with their family and friends. Did they have the time to share how they felt about their loved ones? Did they have the opportunity to share with their spouse, children and friends what each of them meant in developing them into the person they were? Do we take the time to do that today? Ultimately, it is important that we express how we feel to our loved ones as often as possible, because we don’t really know if that will be the last time we get to share how we feel about them. As we focus on the families of our fallen officers in this issue, please take the time to reflect and focus on strengthening your family ties.
The day following the ceremonies, it was back to work. We were in the Capitol on our Legislative Day visits. During the legislative portion of the Board meeting, we had the opportunity to discuss PERS and its investments. It seems that the Legislature is concerned with where PERS chooses to invest its money. However, the Legislature is not concerned because PERS is making poor choices and failing in its fiduciary responsibility — it’s concerned because PERS is choosing to invest in politically incorrect funds such as tobacco, oil, coal and similar investments despite solid, positive returns. The Legislature has chosen to run three bills to get PERS to divest from these ventures.
It is very interesting how the health of the fund is not the prevailing issue here; rather, it is the type of fund the money is being invested in. Unfortunately for our legislators, the “Unicorns and Rainbows Fund” is not making the needed returns to make PERS sustainable. However, our state is beyond blue, in that we worry about what funds the money is in versus the return on those funds. Tobacco, oil and coal are generating positive returns, which is what PERS needs in order to achieve sustainability. This is just another way that legislators are being myopic and foolish, and these are probably the same legislators who will later blame us for bankrupting cities and counties. Fortunately for everyone, PORAC is taking an active role in ensuring that PERS does the right thing and puts its money in those areas known to be profitable. PORAC has taken an active oppose on the various divestment bills, and our lobbyists are going to ensure any future legislation is immediately brought to PORAC’s attention. I want to thank our colleagues from the Corona Police Department, who are making it a point to attend the PERS Investment Committee meetings to express their dismay about making any divestments in profitable ventures and rebutting the arguments from the proponents of the Unicorns and Rainbows Fund.
There is a silver lining to this picture. PERS is not required to comply with the political pressure to divest — even if it comes in the form of legislation — if it can determine such actions would be detrimental to returns. However, everyone knows boards are susceptible to political pressure, which could ultimately affect the sustainability of the investment returns, and diminishing returns would mean an increased cost to the various agencies within PERS and potentially the taxpayers.
Please remember to keep yourself, your family and your friends informed. PORAC continues to work diligently in maintaining your political voice as well as the security of your privacy, while balancing the public’s need for transparency. It is imperative that you do your part by attending your local chapter meetings and keeping yourself abreast of the ever-changing situation in our state. Information that affects us all is constantly flowing from PORAC and other sources. Your chapter meetings are the dissemination points for that information and your opportunity to get clarification on those issues. See you at your next chapter meeting.
Be safe and have fun.