The Bay State’s pension pugilists
The partisan scuffling surrounding Massachusetts’ state pension plan has gotten uglier than a bench-clearing brawl at Fenway Park.
The protagonists, Republican Governor Mitt Romney and Democratic Treasurer Tim Cahill, are battling over who will head the Pension Reserves Investment Management Board, which oversees $29 billion in state workers’ retirement money.
Cahill, a former county treasurer elected to the state post last November (who already is being mentioned as a potential challenger to Romney in 2006), fired Prim executive director Jim Hearty in August. As state treasurer, Cahill is chairman of the Prim board. Hearty’s ouster prompted the resignations of two longtime advisers to that board: Jack Meyer and Allan Bufferd, who respectively run the endowments of Harvard and MIT.
To replace Hearty, Prim’s head since 2001, Cahill handpicked Steven Weddle, a former Clinton administration diplomat who runs South African venture capital firm Eccles Associates. Romney, however, publicly criticized Cahill’s cavalier method and demanded an open search to fill the position. Early last month a majority of the nine-member board -- two of whom were appointed by Romney -- balked at Weddle’s appointment. Now Weddle has withdrawn his name from consideration, and Prim is interviewing search firms to find a new executive director.
Meanwhile, Prim is in the midst of sweeping asset allocation changes, including a search for funds of hedge funds to manage $1 billion, that would transform it into one of the most sophisticated public funds anywhere. Unless politics get in the way.
But don’t expect Prim CIO Jerrold Mitchell to step into the fray. Mitchell -- the driving force behind the radical asset allocation changes that are designed to shore up the underfunded system -- just laughs. “I don’t pay attention to politics,” he says.