SACRAMENTO (AP) — Gov. Jerry Brown announced Friday that he has signed a bill requiring board members of California’s public pension fund to receive investment-related training every two years, even though the fund already requires such education.
AB1163 by Assemblyman Marc Levine, D-San Rafael, originally was introduced as a way to meet Brown’s request to “bring financial sophistication” to the California Public Employees’ Retirement System’s 13-member board, which is dominated by public employees and labor union representatives.
Its original language required adding two board members who had financial expertise and did not have a financial interest in the pension system. It also proposed replacing the State Personnel Board representative with the state Director of Finance.
The bill was changed to give board members 24 hours of education every two years, require records of board members’ compliance with education requirements, and provide an annual report on CalPERS’ website.
The bill provides a broad definition of training, with topics including fiduciary responsibilities, ethics, investment management, actuarial matters, pension funding, benefits administration and governance.
The pension board oversees a portfolio valued at $299.4 billion for 1.6 million public workers and retirees, but it remains underfunded by billions. Board members are responsible for setting employer contribution rates, determining asset allocations and proving actuarial valuations, among other duties.
According to CalPERS, the board adopted an education policy in March to include governance and investment education for board members. That policy includes training on understanding duties and responsibilities, the fund’s health benefits design and funding, and CalPERS’ investment policy.
According to a staff report, the training required by the fund will more than exceed the 24 hours of education required every two years under AB1163. The board voted in June to support the bill.
Brown had urged for more “independence and expertise” on the board as part of a 12-point pension reform proposal back 2011, but the governor later dropped the board issue.