>I think I read somewhere that CA is now pondering to switch their state pension plan from defined benefit to defined contribution plan.>
Yiwu, that's a plan hatched by some state republi-cons, egged on by their corporate titan buddies who are incensed that PERS is using its financial power to (gasp) try to hold them accountable for cronyism, accounting tricks, and overall elitist behavior in rewarding themselves with huge compensation packages at the expense of shareholders.
By trying to convert the pension fund to a series of small defined contribution plans, their idea is to defang the consolidated power of a $170 billion fund to whom boards of directors have to pay attention. Individuals holding their little accounts will have absolutely no say over any corporate governance matters. PERS, which can do this as a defined benefit plan speaking with a unified voice, is one of the best run and most effective pension plans, period.
It's claimed that the opponents convinced the governator to remove the activist head of the fund through an appointment he controls. But much of the remainder of the PERS board supports an "activist" stand (if that's what its opponents choose as their pejorative term). It's one of the few sizeable organizations that can actually hold the corporate elite accountable, or at least make them pay attention, so naturally, the propagandists are out in force to overturn that.
It's unlikely the current legislature would change it, so I'd expect an initiative campaign full of swift boat type distortions to try to get the public to do this. Anytime the little guy gets a leg up these days, the elites stand ready to take 'em down.
From a common sense point of view, this country could use a few more good CalPERS's. |
