Governor Names Insurance Exec to CalPERS’ Board

Two weeks after proposing dramatic cuts in the state’s public pension commitments, Gov. Arnold Schwarzenegger appointed a Republican insurance executive to the board of the powerful California Public Employees’ Retirement System.

Schwarzenegger on Friday named Marjorie Berte, a vice president of the California State Automobile Assn. in San Francisco, to a four-year term on the 13-member CalPERS board of directors, effective next month.

Berte, who served as an insurance advisor and director of the state Department of Consumer Affairs under former Gov. Pete Wilson, joins the CalPERS board as it wrestles with two crucial issues.

The board is under pressure to scale back its campaign to force companies to be better corporate citizens -- an effort that has won it admirers and enemies around the country. And the board must decide whether to oppose the governor’s call to revamp benefits provided by the nation’s largest public pension.

Berte, 52, said she had taken no position on either matter.

“I’ll examine each issue as it arises,” said Berte, who said she planned to focus her attention on CalPERS’ primary mission of maximizing returns on its $172-billion investment fund.

She faces a key decision at her first meeting in February, when the CalPERS board elects a new president to replace Sean Harrigan, a supermarket union leader and activist who was ousted Dec. 1. Harrigan raised the ire of the state Republican Party and the U.S. Chamber of Commerce for using CalPERS’ investment clout to try to remove top executives of Walt Disney Co., Safeway Inc. and other major corporations.

CalPERS’ watchers say they don’t expect Berte’s appointment to hurt the chances of acting President -- and front-runner -- Rob Feckner to succeed Harrigan.

Sources close to the board said they had seen little evidence that current board member Willie Brown Jr., the former mayor of San Francisco, was still seeking the job. Brown lost a bruising fight with Harrigan for the board presidency in 2003.

Feckner said he hoped that “anyone coming in will have an open mind that’s not based upon what somebody told them to do.”

Berte replaces Sidney Abrams, a Napa health insurance and pension consultant who was appointed four years ago by former Gov. Gray Davis. Abrams said he didn’t want to stay on the board because of his disagreement with Schwarzenegger over restructuring the state’s pension system.

In his State of the State speech Jan. 5, the governor proposed changing the retirement program for the state’s public employees and teachers from a defined-benefit plan, which guarantees fixed monthly payments, to a defined-contribution plan, much like private 401(k) programs that invest in the stock, bond and real estate markets.

Schwarzenegger contends that California can’t afford to continue offering lifetime pensions for public sector employees.

Feckner has already gone on record opposing the Schwarzenegger initiative as “a slapdash effort ... that will be disastrous for everyone.”

Harvey Rosenfield, the author of the landmark Proposition 103 auto insurance initiative who often jousted with Berte in the late 1980s and early 1990s, said he expected her to support the governor’s proposed pension changes, as well as business’ efforts to sidetrack CalPERS’ corporate governance activism.

“They would like to eliminate CalPERS as a force for control of the corporate community,” he said.

But Berte’s colleagues in the insurance industry praised her energy and intellect.

“She’s not a person who just follows what anybody tells her to do,” said Dan Dunmoyer, president of the Personal Insurance Federation of California.