November 13, 2014

SEIU Local 221 Members are Fighting for Retirement Security

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Samantha Begovich, SDCERA board member, spoke with members about the recent controversy surrounding SDCERA as well as answered questions and encouraged members to continue the fight, “what SEIU Local 221 members have put a microscope on what has been happening at SDCERA. You cannot underestimate what members have done.”

SEIU Local 221 County members have been very concerned about the questionable direction of the SDCERA retirement fund under the leadership of Salient Partners.

SEIU Local 221 members are calling on the SDCERA board to: 

  • Eliminate high-leverage investment strategies from its portfolio: Salient Partner’s decision to invest in high-risk, high-cost leveraged strategies has been questioned by numerous outside financial experts, most notably the Wall Street Journal
  • Stop paying exorbitant fees to Salient Partners: Salient Partners and their CIO Lee Partridge were hired to replace an in-house chief investment officer who was paid $209,000 a year. Salient Partners pay has now increased to over $10 million a year.
  • “In-source” the investment management with a Chief Investment Officer employed by the County: San Diego County is the ONLY county in California without an in house CIO.

In 2009, Salient Partners was first hired as a paid consultant by SDCERA to manage the pension fund. After pressure from SEIU Local 221 members and skeptical outside financial experts like the Wall Street Journal, some members of the SDCERA board became uncomfortable with the leverage Salient was using.

High risk investments have hurt us before. In 2006, the fund lost $90 million in an investment with a hedge fund, Amaranth Advisors. In 2009, the fund lost $78 million in a fraud scandal involving another hedge fund, WG Trading Investors. Pension funds are long-term investors who should be paying attention to the 30 year horizon instead of taking risky bets for short term gains. The same Wall Street “experts” the SDCERA board has put in charge of the retirement security of tens of thousands of County employees are the same “experts” whose strategies lead to the collapse of the global market 6 years ago.

SEIU Local 221 members have collectd hundreds of petitions and have testified twice before the board, asking them to immediately terminate their contract with Salient Partners and create a management model made of public employees committed to the preservation of secure retirement, fiscal responsibility and corporate accountability. On Wednesday, November 12th, Samantha Begovich, SDCERA board member, spoke with members about the recent controversy surrounding SDCERA as well as answered questions and encouraged members to continue the fight, “what SEIU Local 221 members have put a microscope on what has been happening at SDCERA. You cannot underestimate what members have done.”

Even though the SDCERA board initially voted 5-4 to retain Salient Partners and their controversial CIO, the board is responding to our members’ pressure and has since signaled its willingness to terminate the contract and “in-source” the management of the retirement fund. Last Thursday, the SDCERA board held a straw poll on the issue, and the firing was “approved” 7-0. While this is not an official vote, it does signal that the SDCERA board is on the verge of firing Salient Partners and their controversial CIO, Lee Partridge. If Salient is fired, SDCERA will begin to move its investment management in-house.

For more information on future meetings, actions and details on how you can get involved, please contact Worksite Organizer, Liz DeRoulet, at liz.deroulet@seiu221.org or call at (858) 560-0151 ext. 259

To sign the petition online, please click here. To download the petition and collect signatures at your work site, click here. To download the flyer, click here.

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