San Diego County Pension System Manager Retained — For Now
San Diego County's retirement association board voted Thursday to keep its pension manager but plans to revisit the decision soon.
Some trustees said the manager, Houston-based Salient Partners, has made risky investments with the county's $10.1 billion portfolio and wanted to fire the firm.
The San Diego County Employees Retirement Association voted 5 to 4 to keep the firm. But at its September meeting, the board approved a motion by San Diego County Supervisor Dianne Jacob to schedule a special meeting to discuss other options for managing its portfolio.
Jacob said the options include establishing a chief investment officer who would manage the portfolio but not invest himself, or joining with other funds that have "a proven track record of success."
On Thursday, four trustees voted to terminate Salient's contract of $17.5 million over five years in the next 30 days, which would then give the board 180 days to transition to a new manager.
Jacob, who was one of the votes to terminate, said she thinks the criticism that has hit the pension system in recent weeks is a good thing because it provides the opportunity to revisit the contract.
"I believe it's time to steer things back to the basics with simplicity and common sense," she said at Thursday's meeting. "Not because this board has been criticized but because it's the right thing to do for the current and future retirees and for taxpayers.
"The path we're on is too risky and expensive," she added. "We've been lucky so far, but now it's too big a gamble."
But other trustees indicated they weren't ready to terminate Salient's contract yet.
"Given the fact that there is growing lack of unanimity among this board in support of our current structure, this all needs to be revisited," trustee Dick Vortmann said.
Vortmann said Salient is on informal notice that "they might not have a long-term tenure here." He added that in the meantime, Salient could continue to manage the portfolio.
Jacob said the fact that two trustees indicated they want more time to look at other options first indicates they will be ready to vote to terminate Salient in the future.