Dear DFA Members:
Several years ago, management of the UCRS investment portfolio was handled very successfully in-house at UCOP for about $5M a year. Management was transferred to a private outside organization at the urging of some Regents, notably Gerald Parsky. The cost to us of the less than stellar management team is about $32M per year. An article appeared recently in the press that raises questions about Parsky’s role is this action. For further information, go to http://www.eastbayexpress.com/2007-05-09/news/parsky-s-party
As a result of this situation, Assemblyman Yee has sponsored legislation to require additional employee representation on the board of the UCRS. The Davis Faculty Association, through its affiliation with the Council of UC Faculty Associations, CUCFA, supports SCR 52. The following is a letter CUCFA distributed to the members of the Senate Public Employees Retirement Committee.
Ian Kennedy, Chair
Davis Faculty Association
May 29, 2007
The Honorable Pat Wiggins (Chair)
Public Employee Retirement Committee
California State Senate
RE: Support of SCR 52
Dear Senator Wiggins:
The Council of UC Faculty Associations strongly supports SCR 52 (Yee). This bill would, if passed, declare that the legislature “finds that joint governance of the University of California Retirement Plan is necessary to ensure that significant pension plan decisions are based on full and accurate information, to prevent conflicts of interest from impacting the management and performance of the University of California Retirement Plan, and to ensure that the University of California Retirement Plan is financially sound and well managed in a fair and appropriate manner.”
We believe that the fiscal stability of the UC Retirement System (UCRS) has been greatly jeopardized in the seven years since the Board of Regents, acting unilaterally, questioned the expertise of the then-sitting Treasurer of the Regents and her in-house staff of investment specialists, and turned the management of its retirement funds over to an array of fee-for-services consultants. With the resumption of employee and employer retirement contributions looming on the horizon, we urge the Legislature to do whatever may be required to insure that henceforth the UCRS governing board — like those of the STRS and the PERS — will have equal numbers of employee and employer representatives. SCR 52 is one step in that direction.
Respectfully yours,
Charles P. Nash
Vice President — External Relations
Council of UC Faculty Associations