Red Flags for California Actuarial Advisory Panel
Last month, CalPERS removed from its website the controversial “Myths vs. Facts” page, ending one of the agency’s efforts to soothe public anxiety about the cost of rising pension benefits to public employees.
Some sources close to CalPERS told California Policy Center that the page was so riddled with errors that there were demands for its removal from a little-known outside board, the California Actuarial Advisory Panel.
A CalPERS spokesperson said there was nothing extraordinary behind the change, and certainly no pressure “from any outside board or organization.”
“Like every organization with a website and digital presence, we’re always looking for ways to improve what we present. That was the aim here,” Wayne Davis, chief of CalPERS’ public affairs office, told California Policy Center.
Davis seems right – for reasons that raise questions about the actual independence of outside auditors.
A closer look at the California Actuarial Advisory Panel (CAAP) suggests that board was never likely to demand greater accountability in the high-stakes – and highly political – fight over government employee pay and benefits.
CAAP chairman Paul Angelo, for instance, is also vice president of Segal Consulting – Orange County’s contracted actuarial consultant. In July 2014, Segal made a change in its actuarial predictions that ultimately resulted in a $12 million hike in pension payments in several cities, including Stanton, Mission Viejo and San Clemente.
But Segal had reportedly known about the problem long before it made the announcement, waiting nine months to notify cities in the county system. In the meantime, the firm assured city officials that any increases in contributions to CalPERS would be modest.
According to Orange County Employees Retirement System pension board member Roger Hilton, Paul Angelo had a peculiar response when asked about the delay. Angelo’s response was that he didn’t disclose the increase because “nobody asked” about it, Hilton said.
Angelo was appointed to CAAP by the UC Board of Regents. His panel colleagues include appointees from the the Teachers’ Retirement Board, the Board of Administration of the Public Employees’ Retirement System, the State Association of County Retirement Systems, the Speaker of the Assembly, and the Senate Committee on Rules.
Californians have reason to be skeptical of CAAP – to wonder whether the panelists owe their allegiance to taxpayers or to the government unions that appoint them to this ostensibly independent board.