The California Public Employees Retirement System (CalPERS) is the largest state pension fund in the United States. As we recently noted, CalPERS hired as chief executive officer Marcie Frost, even though she lacked a college degree of any kind. It was as though the state Supreme Court tapped for chief justice a paralegal who had never been to law school. The revelation about Frost sparked criticism around Sacramento, but CalPERS bosses weren’t listening.
On September 25, CalPERS awarded Frost a raise of 4 percent and a bonus of $84,873 on top of her base pay of $330,720. Previous CEO Anne Stausboll topped out at $322,400 and bagged bonuses of $86,587 in 2010 to $131,044 in 2015. Taxpayers might wonder about bonuses for either boss. CalPERS unfunded liabilities have increased 383 percent in ten years, and the massive state pension fund is some $100 billion short of funding its pension obligations. The unqualified Frost does enjoy the support of government employee unions, whose role at CalPERS is to protect incompetence.
A former CalPERS manager known to this writer passed up a football scholarship to a Big 10 college in order to earn graduate degrees in business administration. He worked in the technology industry and CalPERS was his first experience in a government agency. One of his employees was spending hours a day on personal phone calls, which he noted on her performance evaluation. Two union goons promptly appeared in his office claiming that the employee needed more training. The fully qualified manager soon departed for a job where accountability, not incompetence is rewarded.
Meanwhile, taxpayers might expect the state director of finance to be a proven economist with a PhD. Governor Arnold Schwarzenegger’s pick was Ana Matosantos, with only a BA in political science and feminist studies, a non-discipline. Jerry Brown kept Matosantos on the job, and Covered California, the state’s wholly owned subsidiary of Obamacare, hired her for $20,000 a month.
K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and a columnist at The Daily Caller.