New Rules Urged for Travel by Pension Fund’s Board

Directors of the nation’s largest public pension fund took 101 trips between 1992 and 1994, and it is unclear who paid for them, state Controller Kathleen Connell said Monday.

Travel policies at the California Public Employees Retirement System are so loose it is impossible to know how much is spent on travel by the board of directors, and who is paying, said Connell, who was elected controller in November. As part of her job, she is a CalPERS board member.

Connell said she is concerned about possible conflicts of interest, with some expenses possibly paid by corporations that CalPERS invests in.

Members of the 12-person board took 80 trips to other states and 21 trips to other countries, including China, Australia, Italy and Ireland, from 1992 to 1994, Connell said. The number of trips jumped 53% between those years, she said.

Connell is proposing new rules requiring board members to seek the permission of the full board before traveling on pension fund business. She also wants them to submit detailed expense accounts and write a report on what they learned.

“We have to make certain (that) board members don’t travel for the purposes of joy rides,” Connell said. “We want to make sure there is no conflict of interest.”

Connell said there was no way to estimate the costs of the 101 trips, or separate how much the state paid and how much may have been paid by corporations or others, because expense documents lacked details.

She stressed that there was no evidence of impropriety, but that there was no way to know if all travel expenditures were legitimate.

CalPERS is the nation’s largest public pension fund, with about $80 billion invested in a wide variety of companies. Connell said CalPERS has strict requirements of openness among companies it invests in, and should be willing to adopt a similar open policy regarding travel.

Board members are not paid salaries, although they do receive reimbursement for expenses, board spokesman Pat Hill said. The travel policy must be adopted by the full board. Connell has no authority to require the change.