Public fund officials and corporate governance experts today blasted California Gov. Arnold Schwarzenegger and his proposal to close the state's public defined benefit plans to new government employees, saying the measure represents a broad counterattack on corporate governance efforts led by public funds.
California Treasurer Phil Angelides accused Mr. Schwarzenegger of working hand in hand with right-wing ideologues who seek to destroy public pension funds and said his proposal echoes President George W. Bush's efforts to privatize Social Security. "The governor is acting like Karl Rove's robot," Mr. Angelides said in a news briefing, referring to Mr. Bush's senior domestic policy adviser.
New York Comptroller Alan Hevesi said right-wing groups want to prevent institutional shareholders from playing any role in corporate affairs. "We want to fight tooth and nail this right-wing cabal," he said.
Nell Minow, editor of the Corporate Library, said if public defined benefit plans are shut down, "there will be no one left to provide oversight of the capitalist system. Arnold Schwarzenegger appears to be a wholly owned subsidiary of the entrenched and overpaid CEOs."
North Carolina Treasurer Richard Moore said switching to defined contribution plans would cause the state's retirement plan fees to grow tenfold to $500 million a year.
Public pension fund officials from Oregon, California, the New York State Teachers' Retirement System, the Illinois State Board of Investment, and New York City also joined in opposing the pension privatization proposal.
Referring to reported comments by Mr. Schwarzenegger that he plans to raise $50 million to push through a pension-reform measure on the ballot, Mr. Angelides said: "If he wants this to be a national battle, this will be a national battle."
H.D. Palmer, a spokesman for the California finance department, did not return a call for comment.
