SACRAMENTO, Calif. — CalSTRS adopted restrictions officials believe will set a tougher standard for U.S. public pension funds trying to reduce the potential for "pay to play."
The new rules represent an effort to avoid potential conflicts of interest at the $153.2 billion California State Teachers' Retirement System. They are part of a sweeping set of changes to the board's policies affecting the fund's investment practices.
Arthur Levitt, former chairman of the Securities and Exchange Commission and a strong critic of "pay-to-play" practices, said in an interview that the CalSTRS board action was "courageous and far-sighted and will ripple through public pension funds throughout America." Mr. Levitt praised Gov. Arnold Schwarzenegger for supporting the changes.
Keith Brainard, research director for the National Association of State Retirement Administrators, Georgetown, Texas, said: "There's a wide range of rules regulating the acceptance of gifts and what constitutes gifts from one system to another. But CalSTRS certainly seems to have raised the bar. I don't know of another system that has a set of rules like those."