My Net Worth

A WSJ editorial (susbscription required) discusses Gov. Ah-nold's proposals to convert California's largest pension plans to partial private accounts (similar to a 401k).

What are some of the problems of the defined benefit plans? Drains on state treasuries, aging workforces and

Mr. Angelides, a Democrat with gubernatorial aspirations, says that Governor Schwarzenegger's proposal would limit the "corporate governance" efforts of pension overseers. And it's true that, as shareholders in U.S. companies, Calpers and other pension funds have every right to worry about how businesses perform.

But instead of limiting their concern to earnings and return on investment, Messrs. Angelides and Hevesi, among others, have used their clout to promote their own personal political goals and constituencies. Mr. Angelides pushed Calpers to abet last year's union raid on Safeway, while Mr. Hevesi pushes policies and settlements that help his trial-lawyer contributors, most recently in the WorldCom directors' settlement. As long as these vast pots of pension-fund money are managed by politicians, such abuses are inevitable.

A not-so-recent post on this blog addressed this exact concern. A lot of money in the hands of politicians, er, elected officials, is a recipe for problems.