Schaefer suggests investing pensions in high-tech industry GOP opponent prefers 'conservative approach'

October 07, 1998|By Jay Apperson | Jay Apperson,SUN STAFF

More state employee pension funds should be invested in fledgling high-tech companies to spur economic growth, Democratic comptroller candidate William Donald Schaefer said yesterday.

Acknowledging that his proposal would face opposition among those concerned about using pension money for relatively risky investments, the former governor said his plan would promote business development -- and not imperil the $28 billion pension fund's assets.

"There are ways the pension money could be used to help the state," Schaefer said. "It's as strong as any pension can be. It wouldn't hurt it at all."

Asked how much of the fund should be invested as venture capital, Schaefer said, "I'm not talking 10 or 20 percent. I'm talking a couple of percent."

The pension fund owns one such holding, an investment of less than $20 million made under a pilot program introduced by Schaefer when he was governor.

Schaefer's new proposal was criticized by one of the larger labor organizations with members covered by the pension. Mary Jo Neville, a lobbyist for the Maryland State Teacher's Association, said economic development should not be a factor in any investment decision affecting the pension fund.

"The purpose of the money in the pension system is to provide benefits for its members. Period. It's not a pot of gold for elected officials to make social policy or to use for 'whatever,' " she said.

Larry M. Epstein, Schaefer's Republican opponent, said he opposes such a plan.

"I take a very conservative approach. It's other people's money," Epstein said. He added that he believes the fund should rely on blue-chip investments.

Amy Blank, a lobbyist for Mid-Atlantic Venture Association, an investment group, said putting money into emerging high-tech companies can help both the state's business climate and the pension fund.

"When you can take taxpayers' dollars and provide an incredible return on your money, and at the same time create jobs bringing in hundreds of millions of dollars in revenue and increase your tax base for public safety and education, that's government at its best," she said.

The budget passed by the General Assembly this year requires the State Retirement and Pension System to study the wisdom of investing in venture capital.

Pub Date: 10/07/98

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