Public pension boards are sacrificing pensioners for politics

In my work as an expert witness in fiduciary and securities matters, I have watched the same pattern repeat across dozens of board rooms: A pension fund trustee invokes “long-term value” to justify a so-called “Environment Social Governance” or ESG investment mandate. There, the conversation about financial performance ends.

The beneficiaries’ interest — the sole interest the trustee is legally required to serve — has been quietly subordinated to a broader political agenda. The public workers whose retirement security depends on these decisions have no effective mechanism to hold anyone accountable when it goes wrong. That is the accountability gap at the center of public pension governance. It is not a partisan problem. It is a structural one.

The fiduciary law governing public pension funds is explicit. California’s Government Code requires CalPERS trustees to act “for the exclusive benefit of the members and beneficiaries of the system.” Federal law governing private pensions under ERISA uses identical language: “exclusive purpose of providing benefits to participants and their beneficiaries.”

The common word is “exclusive” — not even just “primary,” and certainly not “subject to other social objectives the board finds compelling.” The common law rule against using trust assets to benefit third parties at the expense of the beneficiaries is not a new legal theory. It is the foundational principle of trust law, developed over centuries specifically because beneficiaries typically cannot closely monitor or constrain trustees managing assets on their behalf.

CalPERS, the nation’s largest public pension fund, committed $468 million to a clean energy private equity fund in 2007. By March 2025, combined distributions and........

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