PERS Investing in Unicorns and Rainbows
The California Peace Officers’ and National Law Enforcement Memorial ceremonies are fresh on my mind as I write this article. As always, they are somber occasions filled with grief and sorrow from the family members, friends and colleagues over the passing of fellow peace officers. Consequently, the events are a source of reflection on the inherent dangers of our profession. Regardless how long we have been peace officers and how invincible we believe we are, the ceremonies are a solemn reminder of our own mortality.
As the dignitaries spoke, I reflected on those officers’ last thoughts and interactions with their family and friends. Did they have time to share how they felt about their loved ones? Did they have the opportunity to share with their spouse, children or friends what each of them meant in developing them into the person they were? Do we take the time to do that today? It is important that we express as often as possible to our loved ones how we feel because we don’t really know whether that will be the last time we get to do so. As we focus on the families of our fallen officers in this issue, please take the time to reflect and strengthen your family ties.
The day following the California memorial ceremony, it was back to work. We were in the Capitol on our Legislative Day visits. During the legislative portion of the meeting, we had the opportunity to discuss PERS and its investments. It seems the Legislature is concerned with where PERS chooses to invest its money — whether the investments are socially acceptable. This ultimately means PERS is failing to meet its fiduciary responsibility to members. Yet, these legislators are quick to point the finger at CalPERS as the root of the pension evils when dismal returns are reported. This should be a simple discussion. CalPERS’ only responsibility should be to make as much money as possible for its member agencies and not worry whether investing in coal, oil, assault weapons or anything else is socially and politically unacceptable.
It is very interesting to note that the health of the fund is not the prevailing issue here, but rather the type of fund the money is being invested in. Unfortunately for our legislators, the “Unicorns and Rainbows” funds are not earning the returns needed to make PERS sustainable. However, since our state is beyond blue and potentially turning purple, we’re more concerned about what funds the money is in versus the return on those funds. Tobacco, oil, coal, weapons manufacturers may be politically incorrect, but they are generating positive returns, which is what PERS needs to achieve sustainability.
There is a silver lining in this picture. PERS is not required to divest from these funds. Even if divestment is mandated by law, PERS can argue that such actions would negatively affect its returns. However, everyone knows boards are susceptible to political pressure, which will ultimately affect the sustainability of their investment returns. As such, diminishing returns means an increased cost to the various agencies within PERS and, potentially, to taxpayers. I realize I am speaking to one segment of PORAC’s membership, because a good portion of our members are ’37 Act Counties or on their own systems. But, keep in mind that your county or separate retirement system occasionally follows suit or aligns itself with CalPERS’ actions. It’s incumbent upon all of us to keep an eye out and become vocal when our retirement system is making poor investment strategy choices.
AB 931 “Necessary vs. Reasonable” by Assembly Member Shirley Weber also was at the forefront of our conversations and member visits. Everyone in law enforcement is on the same page about AB 931 being extremely detrimental to our doing our jobs safely and successfully. Unfortunately, Assembly Member Weber is out of touch with reality and is a spokesperson for the ACLU (which supports the bill). She does not care about putting officers in harm’s way or meeting with us to discuss and create “reasonable” legislation that satisfies her constituents’ needs while ensuring the safety of our members. Plus, the majority of her so-called test cases is from out of our state.
Please remember to keep yourself, family and friends informed. It is imperative 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 the information and your opportunity to get clarification on those issues. See you at your next chapter meeting.
Be safe and have fun.