State Controller Charges CalPERS With State Law Violations

February 2, 2001 ( - California State Controller Kathleen Connell has filed suit against the California Public Employees' Retirement System (CalPERS), charging the pension system with violating state law.

Connell said that as the state’s Chief Financial Officer and a member of the CalPERS Board, she had a responsibility to prevent the “clear circumvention of state law.”

The lawsuit alleges that CalPERS has:

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  • Raised the per diem and travel reimbursement for the CalPERS Board, in excess of statutory limits.  The suit alleges that the Board has increased the per diem of various Board members from $100 per day to $400 per day.
  • Voted to increase the salaries of 10 of its employees, and set up its own payroll system to issue paychecks in the higher amounts when Connell’s office refused to issue them.
  • Approved reimbursement of local agencies, whose employees can serve as board members, up to 90% of their board member employees’ salary, despite a legislative limit of 25%. The reimbursement effectively transforms those employees into “virtual employees of CalPERS”, according to the suit.

CalPERS was not immediately available for comment.