TX Governor Switches State Pension Board Head

June 26, 2008 (PLANSPONSOR.com) - Texas Governor Rick Perry has ousted the chairman of the Texas Pension Review Board and replaced him with an Amarillo financial adviser.

A Fort Worth Star-Telegram news report said outgoing chairman Frederick “Shad” Rowe has been publicly critical of some pension investment strategies such as the use of hedge funds and other alternative investments. Rowe has also issued repeated warnings about financially troubled pension programs.

The report said Rowe, a Dallas money manager, helped spark a state Attorney General’s Office probe into the Fort Worth city pension plan. Perry named Richard McElreath to replace Rowe on the board, which oversees nearly 400 public pension systems that hold $200 billion in assets.

Perry spokeswoman Allison Castle told the newspaper that the board leadership should pursue the best interests of the state “and not pursue their own personal agenda.”

For his part, Rowe insisted his only agenda was to be honest about what he saw. “I presumed I had built up enough credibility that I could ‘tell it like it is’ without worrying about politics,” he told the newspaper. “I believe underfunded public pensions and other expensive promises represent a fiscal time bomb.”

In 2007, Rowe called on the attorney general’s office to help examine the Employees’ Retirement Fund of Fort Worth after a city auditor’s report showed several problems, including excessive fees and employees’ spiking their pensions by loading up on overtime in their final years of work (See  Texas AG Shoots Down Plan to Shore Up Fort Worth Retirement Fund ). The then-$1.6 billion fund was underfunded by $400 million.

«