Name: Two key leaders abruptly depart county pension system
Brand: sandiegouniontribune.com
SKU: sandiegouniontribune-com-10
Availability: OnlineOnly

critic

Two key leaders abruptly depart county pension system

preview

Copyright © 2022, The San Diego Union-Tribune | | AdvertisementAdvertisement The chief executive of the San Diego County pension system announced his resignation Thursday, a surprise that came near the end of a retirement board meeting conducted by videoconference.David Wescoe, who joined the San Diego County Employees’ Retirement Association during a time of turmoil and second-guessing between some retirement board members, said he decided to accept a recently offered private-sector job in San Diego.“Most of the heavy lifting here has been done,” said Wescoe, who was addressing the board from the Mission Valley meeting chambers, even though most trustees attended remotely due to the COVID-19 pandemic.“There is nothing like a pandemic to focus a 65-year-old guy on the future,” Wescoe said.His last day will be April 30.AdvertisementThe board was scheduled to conduct a performance evaluation of Wescoe in a closed session following the public portion of the meeting, according to the posted agenda, but that discussion subsequently was canceled.It would have been the second such evaluation in the past three meetings. Pension officials held a separate closed-door review of Wescoe’s job performance in December, but made no public announcement after that meeting.Wescoe’s departure came minutes after it became clear that Richard Vortmann had vacated his pension board seat, another resignation that was not publicly announced until the longtime trustee and former National Steel and Shipbuilding Co. president was praised in a board proclamation.Vortmann, who previously served as interim CEO of the San Diego Regional Chamber of Commerce and volunteered for a host of other high-profile charities, did not return a message seeking comment Thursday.Both Wescoe and Vortmann were key leaders in the wholesale overhaul of the county pension system that began five years ago.Vortmann initially was appointed to the retirement board in 2010; his current term was due to expire in June.He was among a handful of board members to raise questions about the management of former CEO Brian White and his handpicked investment strategist, Lee Partridge.Along with Trustees Samantha Begovich and Dianne Jacob, Vortmann helped engineer the departure of both White and Partridge in 2015, when the pension had much of its then-$10 billion portfolio leveraged in exotic securities.Partridge was brought to San Diego County from a Texas teachers retirement system in 2009 at White’s recommendation. But Partridge declined to accept a staff position — and its limited salary — and instead became an outsourced chief investment officer.The arrangement created problems from the outset. Documents obtained by The San Diego Union-Tribune in 2009 and 2010 showed that Partridge was directly managing pension system employees, which is not permitted.At White’s urging, the board awarded larger and larger consulting fees to Partridge and steered county investments into a so-called risk parity strategy that under worst-case scenarios could have exposed the county to billions of dollars in losses.By the time Partridge parted ways with San Diego County, his Texas-based company was being paid $10 million a year — about 40 times the annual salary of the in-house chief investment officer.Wescoe, who was widely credited with turning around the city pension system when it confronted critical management lapses more than a decade ago, was first brought in to the county system on an informal basis in early 2015. He was quickly awarded a consulting contract for $350 per hour to advise the board.Pension fund officials did not immediately respond Thursday to questions about Wescoe’s current salary. According to Transparent California, the nonprofit that posts annual public salary data, Wescoe received $299,000 in base pay in 2018, the most recent year for which information was available.Wescoe succeeded White on an interim basis five years ago this month, meaning his April 30 resignation will qualify him for lifetime retirement benefits from the pension fund he is now leaving.Immediately upon assuming the top post, Wescoe brought in a slew of new senior leaders and set to work reducing risk levels across the portfolio and rewriting the board investment policy.The portfolio is now far more liquid, the departing CEO told the board Thursday. That means most of the funds can be accessed much more quickly if needed, such as during a worldwide pandemic, he said.Fees paid by the fund to outside investment managers also have declined, Wescoe said, from more than 100 basis points — which equals 1 percent of the portfolio — to an average of 44 basis points.“There should never be a concern at all about SDCERA fulfilling its obligation to pay its benefits,” Wescoe said while announcing his departure, a surgical mask dangling around his neck.“Our members should feel great relief in that,” he said. “SDCERA is incredibly strong, very secure and, if I say so myself, well managed.”Begovich and other trustees lauded Wescoe for his service, crediting the career investment professional with turning around the public pension fund at a difficult time and protecting retirement benefits for 40,000 current and former county employees.“You began as a volunteer during a time of great upheaval, with a divided board,” said Begovich, the only trustee to attend the pension board meeting in person. “You showed courage under fire.”County Treasurer-Tax Collector Dan McAllister, who serves on the pension board as part of his elective duties, praised the outgoing CEO for his steady leadership in recent years.“You are a man of integrity, vision and moxie,” McAllister said. “I don’t know that I’ve ever met a greater recruiter .… The people that you’ve hired will continue on, we hope, and continue to prosper with this organization.”Trustees created a subcommittee consisting of pension board members Begovich, Jacob, Mark Hovey and Richard Tartre to consider possible successors to Wescoe on an interim basis.Jacob, the county Board of Supervisors’ representative on the pension board, made no secret of her selection. She said Hovey should be appointed to the job in the short term, citing his prior experience as leader of the city of San Diego’s pension system.The subcommittee is likely to meet in the next few days so an interim chief executive can be named before the end of the month.According to the pension system’s most recent report, the county retirement portfolio was worth just over $11.9 billion at the end of March. That was down nearly $2 billion from the close of 2019, when the fund value was about $13.6 billion Get our essential investigative journalism Sign up for the weekly Watchdog newsletter for investigations, data journalism and more. You may occasionally receive promotional content from the San Diego Union-Tribune. Show Comments Load More Advertisement Get our essential investigative journalism Sign up for the weekly Watchdog newsletter for investigations, data journalism and more. You may occasionally receive promotional content from the San Diego Union-Tribune. Advertisement Advertisement STORY TIPS Blow the whistle Are San Diego County institutions, and people in positions of trust, living up to their duties, their promises, the law and the expectations of the public? Advertisement AdvertisementAdvertisement

Copyright © 2022, The San Diego Union-Tribune | | AdvertisementAdvertisement The chief executive of the San Diego County pension system announced his resignation Thursday, a surprise that came near the end of a retirement board meeting conducted by videoconference.David Wescoe, who joined the San Diego County Employees’ Retirement Association during a time of turmoil and second-guessing between some retirement board members, said he decided to accept a recently offered private-sector job in San Diego.“Most of the heavy lifting here has been done,” said Wescoe, who was addressing the board...

public

Jeff McDonald

sdutMcDonald

The San Diego Union-Tribune, the region's leading news source since 1868. Follow our journalists, too: http://j.mp/UTstaff

Two key leaders abruptly depart county pension system

No article scores yet.

CRITIC REVIEWS

PUBLIC REVIEWS