According to the Patriot-News, Senators Jane Orie, R-Allegheny, John Rafferty, R-Montgomery, and John Eichelberger, R-Blair, have taken issue with offering the bonuses for the last fiscal year. “In our opinion this is an indefensible position and a gross miscalculation on your part,” they wrote in the letter to Jeffrey Clay, the pension system’s executive director, according to the report.
The bonuses, which reportedly range in amounts from $9,720 to $106,223, and will be paid through bi-weekly pay adjustments from now through June 30. System officials said the bonuses were provided for through a board policy and that the board is contractually obligated to provide them or risk a breach of contract lawsuit. The bonuses have drawn attention because the system reportedly lost $1.8 billion in returns during the course of the year.
PSERS executive director Jeffrey Clay earlier told The Patriot-News of Harrisburg that the investment staff’s base salaries are lower than the current norms for professional investors and that the board might consider increasing the salaries to keep them competitive. Also the system’s investment staff outperformed their peers nationally, system officials said, according to the report (see PA Pensions to Halt Investment Staff Bonuses ).
Last week Auditor General Jack Wagner called the retirement system’s decision to pay the bonuses unconscionable “at a time when our nation is facing its greatest economic crisis since the Great Depression.” He urged the system to recover the money paid out in bonuses from employees, according to the Patriot-News.