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President’s Annual Report
Elmer J. Khal, NCPERS President
 NCPERS’s willingness to take on issues such as health care, corporate fraud, pension raids and inflated executive compensation is why it remains a vibrant pension organization, NCPERS President Elmer Khal told members at the group’s annual conference.
The latest issue receiving the organization’s increased attention is health care costs. NCPERS’s program in Denver, Khal said, would place special emphasis on health care costs and their impact on pension systems.
In his opening address to members, Khal said, “We are not so naive to believe we have all the answers. But we may be able to help our members.”
“Health care costs are not just a retiree problem. They are a concern for all members of public pension systems--both active and retired.”
Even though it is a pension organization, NCPERS is concerned with health costs, Khal said. “For 62 years, NCPERS has protected and fought off all attacks on our pensions. We stopped pension raids. We stopped mandatory coverage. We stopped dismantling of defined benefit plans. We support protecting Social Security benefits for those who are covered. We support pension benefits that allow our members to live with dignity during their retirement years…to maintain their standard of living, to have a secure pension benefit and good health care coverage. It would be irresponsible for us to sit idly by and allow 62 years of pension benefit protections to be eaten away by health care costs.”
Khal also pointed to continuing bad economic news as a threat to pension funds. “More than half the states still have shortfalls totaling $21 billion. Next year will be worse. Our goal is to make sure our pension funds are neither the target nor the solution to these financial problems.”
Khal also took aim at corporate America. “We’ve been robbed and no one seems angry. Millions of dollars have been stolen by corporate fraud, and our pension funds and their sponsors should be screaming with outrage. However, somehow they don’t seem upset. We would be more upset if someone broke into our office and stole a computer. [Corporate leaders] stole millions. Where’s our outrage?”
He said the top 12 CEOs turned in a performance that lagged the S&P 500, “but gave themselves compensation in excess of $22 million each.”
“As pension trustees, we are the owners of these corporations. It’s important our voices are heard. We must be involved in reforming the way corporations are governed. We must hold accountable those who steal our money.”
Khal also warned that if the Governmental Accounting Standards Board achieves its goal of making employers and pension plans carry health care benefits as long-term liabilities on their balance sheets, such actions “will have a drastic effect on bond ratings and sales, and could result in retirees losing their health care benefits.” NCPERS has vowed to fight such a measure.
“This is how NCPERS is different,” he said. “We are not only a pension organization, but also a legislative organization. We are the only organization with a full-time, paid lobbyist to represent your interests on Capitol Hill.”
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