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Op-Ed submitted by Steve Mermell, Candidate for CalPERS Board Position A

I am running for a seat on the CalPERS Board because I believe our pension fund needs experienced, steady leadership — not risky investment schemes that gamble with the retirement security of public employees and the fiscal health of cities.

For nearly 33 years, I served the City of Pasadena, including senior leadership roles of budget administrator, assistant city manager and ultimately city manager. During that time, I saw firsthand how CalPERS decisions ripple through municipal budgets and impact the services our communities rely on.

When CalPERS contributions spike, cities are forced to cut elsewhere — parks, libraries, public safety. During COVID-19, when cities faced unprecedented challenges, contribution rates climbed just as revenues collapsed. This was a painful reminder that CalPERS investment choices affect not only retirees, but every member agency trying to balance a budget.

Unfortunately, CalPERS has moved in the wrong direction: embracing high-fee, high-risk private equity investments that lack transparency and underperform compared to other pension systems. Even in years when the stock market has soared, CalPERS’ returns have lagged, leaving the fund just 75% funded — below the national average. Some even floated ideas like crypto investments. That is not responsible stewardship.

I have spent my career facing crises without resorting to gambles. In 2008, during the subprime meltdown, I refinanced $270 million in city bonds, saving Pasadena millions in interest costs and stabilizing finances during chaos. As city manager, I led efforts that avoided layoffs, kept our libraries and public services operating, and even helped prevent the state from taking over our school district — all while eliminating a structural deficit in the city’s budget.

Closer to CalPERS issues, I helped turn around Pasadena’s Fire and Police Retirement System, which was just 66% funded after decades of underfunding and risky bets. By adopting a disciplined plan, reducing the assumed rate of return, and carefully restructuring the portfolio, we restored the system’s health. Today, that system is 85.5% funded. This is the kind of measured, hands-on approach I will bring to CalPERS.

My philosophy is simple:

  • Protect retirement security. CalPERS members deserve peace of mind that their pensions are safe, stable, and responsibly managed.
  • Reduce unnecessary risk. We should focus on long-term, sustainable investments — not opaque strategies that enrich brokers and placement agents while leaving cities with the bill.
  • Ensure transparency. Cities, members, and the public deserve to know how money is being invested, what fees are being paid, and whether those choices are meeting expectations.
  • Avoid supplemental contributions. Municipal budgets are already strained. CalPERS must avoid strategies that increase volatility and force contribution hikes when cities can least afford them.

Public service has always been about stewardship — safeguarding community resources and making choices that stand the test of time. The CalPERS Board needs members who have been tested, who understand both finance and governance, and who will resist the temptation to chase short-term gains through risky schemes.

I am asking for your support because I believe my experience, record, and values align with what CalPERS members and member agencies need most: a steady hand, a clear eye on the future, and an unwavering commitment to protecting pensions for those who have dedicated themselves to public service.

Steve Mermell is a seasoned public servant with over 30 years of experience in California local government, including serving as city manager of Pasadena, one of the state’s most respected and multifaceted municipalities. Throughout his career, Steve has earned a reputation for sound financial management, collaborative leadership and an unwavering commitment to public service.

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