The guilty plea of former Connecticut State Treasurer Paul J. Silvester to charges of taking kickbacks in connection with pension fund investments is a warning to state and local governments where one official is the sole trustee of the public employee pension funds: The sole trustee system must be changed.
Though previous sole trustees might have carried out their fiduciary duties honestly and without favor, and the current trustee might be doing so also, at some point temptation will be too great for some holder of this office. Public pension funds (and corporate funds also) must be overseen by a group of trustees, supported by independent consultants and custodians.
Today the job of overseeing multibillion-dollar pension funds invested in a wide range of investment vehicles is too complex to be left to one official, such as the state treasurer or controller (as in New York state).
Sole trustees often don't like the system. H. Carl McCall, New York state controller, and his predecessor, Edward V. Regan, both asked the New York Legislature to change the system. They knew the difficulties and temptations. It's time for those with the power to change the system to listen.