Underfunding Drives Challenge to Incumbent CalPERS is underfunded, with assets sufficient to cover 71 percent of its obligations. Jason Perez, the victorious police union official, hails from Corona, California, and his union had been sending representatives to speak at CalPERS Board meetings to discourage the focus on ESG issues and attention instead on investment. Some California cities, including Corona, "have complained that rising pension costs are inhibiting their ability to fund other services," according to the Sacramento Bee.
Defeated President Priya Mathur had only been President since January, although she had been a CalPERS Board member for 15 years. In his campaign about CalPERS' management, Perez argued that "[CalPERS has] been used more as a political action committee than a retirement fund." Perez was one of six Board member representatives elected by employees and retirees participating in CalPERS.
Conflict Between Fiduciary Duty and ESG Focus. "CalPERS has a fiduciary duty to California public employees, who rely on it for retirement security," Commissioner Atkins notes in his op-ed. However, "CalPERs's beneficiaries are stuck. They are locked into the system and cannot vote with their feet." He also notes that CalPERS was one of several pension funds who signed onto an October petition asking the SEC to standardize ESG disclosures for public companies.
Mandated Disclosures as Information Overload. Atkins pushes hard against SEC mandated disclosure of ESG, noting that such "proposals always tout purported benefits to investors, but mandatory disclosure of additional immaterial information would be harmful." Quoting former SEC Chair Mary Jo White, who cautioned against "information overload," he argues that "more information is not necessarily better information" and "mandating politicized corporate disclosures doesn't align with the SEC's mission to protect investors and facilitate capital formation."