State Treasurer Phil Angelides proposed Thursday to create a corporate crime-fighting agency that would wield the clout of two giant pension funds to crack down on stock market abuses.
The proposed Office of Pension Protection and Market Reform would combine the resources and influence of the state's powerhouse pension funds: the California Public Employees' Retirement System and California State Teachers Retirement System. The funds, better known as CalPERS and CalSTRS, represent two of the nation's three largest public pension portfolios, with combined assets of $228 billion. The stock market's plunge during the last three years has cost the two funds about $50 billion.
Angelides said some of those losses could have been avoided if shareholders had been more vigilant. "We are in a war to right our markets and restore investor confidence," Angelides said. "By itself, California can't change the market, but we sure as heck can make our rightful contribution."
Launching the pension protection office would require the board approvals of both CalPERS and CalSTRS. As treasurer, Angelides sits on both boards.
The format and funding of California's proposed pension protection office remains sketchy.
Angelides envisions staffing the office with about two dozen employees at CalPERS and CalSTRS.