Pension-fund officers get $1.3M bonuses

COLUMBUS (AP) — The pension funds that earn money for Ohio’s teachers and public employees paid millions of dollars in performance bonuses to investment officers this year, despite the funds’ loss of billions of dollars in the market, a newspaper reported Sunday.

This year, 10 investment officers for the State Teachers Retirement System received performance bonuses of $200,000 or more, an analysis by The Columbus Dispatch found. The teachers fund paid a total of $6 million in bonuses.

The Ohio Public Employee Retirement System paid about $1.3 million in performance bonuses.

From Dec. 31, 2007, through June 30 of this year, the state teachers fund lost 9 percent of its value, going from $77.2 billion to $70.3 billion. The public employees system lost 7 percent of its value during the same period, shrinking from $82.9 billion to $76.7 billion.

Investment officials defend their bonuses as vital to attracting talent from the lucrative private sector.

Some teachers weren’t happy about the bonuses in the teachers fund, which affects a total of 449,000 people — including 180,000 active teachers, 140,000 retirees and 120,000 beneficiaries.

“When retirees are struggling to pay for groceries, there’s so much insensitivity to see millions and millions of dollars going to pay for bonuses,” said Molly Janczyk, a retired Columbus teacher. “No one faults them for bonuses, but it kind of rubs salt in the wounds to see these kinds of bonuses during the economic downturn.”

The teachers fund’s top earner — Assistant Director of Investments Mary Ellen Grant — received $529,200, including a bonus of $259,200. The bonus is almost as big as the one received by the chief investment officer of the California teachers pension fund — who received a $295,000 bonus this year — even though that fund’s assets are roughly twice as large as Ohio’s.

The fund’s executive director, Michael J. Nehf, said the six-figure take-home pay of the top pension fund investment officers pales in comparison to private-sector salaries.

“In order to attract and retain quality people at STRS Ohio, and you need to have the best and brightest to have the kind of investment performance you want, you have to have these kinds of incentives,” Nehf said. “The money we pay in those bonuses is repaid many times in terms of our investment performance.”

Despite being larger than the teachers fund, the Public Employee Retirement System is less generous with bonuses. The largest went to Chief Investment Officer Robert G. Cowman, who received a $125,742 performance bonus.

Teachers fund officials said their bonuses are larger because the fund manages 80 percent of the fund’s assets internally, while the public employees’ fund does about 62 percent internally. The rest is handed off to outside firms.