California is home to some of the most dedicated public servants in the United States. From fighting the wildfires that have plagued our state to teaching our children, local and state government employees work tirelessly to enforce the laws and keep our citizens safe. Regrettably, the officials who oversee public employees’ retirement security are failing our firefighters, police officers, and others by putting social policy aims ahead of returns on investment.

The state of California has long faced mismanagement of retirement funds. The unfunded liabilities of the California Public Employees Retirement System and California State Teachers Retirement System (CalPERS and CalSTRS) are $138 billion and $96.7 billion, respectively as of 2016. In the midst of the massive funding gap, the boards overseeing these pension plans have chosen to promote political and social agendas instead of generating better revenue from investments.

In recent years, the CalPERS board has chosen to address issues like climate change, tobacco usage and private prisons instead of closing the unfunded liability gap. Just recently, the CalSTRS board voted to divest from two private prison companies, not because the investments in the two companies failed to produce returns for pension beneficiaries but because of personal and ideological views. In fact, CalSTRS board member Paul Rosenstiel admitted that he is unsure how this action meets the board’s fiduciary obligations.

In a signal CalPERS plans to continue this unacceptable policy of putting political views ahead of the financial interests of retirees, in early October CalPERS signed onto a letter to the Securities and Exchange Commission further exposing the pension fund’s political agenda. CalPERS asked the regulatory body to initiate a rulemaking process that would require corporations and investment managers to begin reporting on their environmental, social, and governance (ESG) practices for their corporate operations.

In response, I recently joined 11 other pensioners and public officials from all around California in signing a letter urging CalPERS to reverse itself. It is not the job of either CalPERS or the SEC to facilitate political or ideological agendas. With such massive unfunded liabilities, CalPERS’ support for ESG rulemaking sends a contradictory signal to state workers. Our letter stressed that the board’s chief job is to uphold its fiduciary responsibility to provide retirement security for hardworking state employees. The letter also noted that state residents should not be asked to pay more in taxes to make up for shortfalls. What is needed is better investment strategies and management by pension fund overseers.

Our position is backed up by the recent election of Corona Police Sergeant Jason Perez to the CalPERS board. His election was a direct rebuke of politically-tinged investing and surge in unfunded liabilities over the last ten years. Campaigning on the platform of sound financial policy and catering to the retirees of California instead of the political whims of activists, Perez brings a badly needed voice to pension management in California.

While Sgt. Perez holds just one seat, he will help ensure his fellow board members remember that they are bound to fiduciary duty by the bylaws of CalPERS to put the financial soundness of the fund ahead of individual desires to address societal issues.

More broadly, the decision-making process in the CalPERS boardroom must change. By managing hundreds of billions of dollars of retiree money, CalPERS wields a great deal of power over the companies in which it invests. In a misuse of this power, CalPERS has voted for shareholder resolutions that cost companies money for the sake of political positioning. This sort of political mismanagement of funds not only costs the corporations money but also causes their shares to lose value – leaving pensioners whose retirement plans are invested in those companies with even less retirement security.

This abuse is obvious in the more than 17 sponsored ‘2-DS’ resolutions by CalPERS in 2017, resolutions that ask companies to examine “the long-term portfolio impacts of technological advances and global climate change policies.” This will not enhance the profitability of the companies involved but instead increase their administrative costs. By passing these resolutions, CalPERS board members acted not in the interest of investment returns but in the interest of their leadership’s political agenda.

Our state is perilously short of the money it will need to meet its obligations to the hardworking first responders, teachers, administrative personnel and others who served out state over their working lives. For their sake and in the interest California’s taxpayers, it is time for CalPERS to focus on boosting investment returns rather than advancing political agendas. Our state’s future depends on it.