MO Governor Unhappy about Retirement System Bonuses

April 6, 2009 ( - The 14-member staff of the Missouri State Employees Retirement System (MOSERS) received almost $300,000 in bonuses even as the pension fund lost almost $1.8 billion, The St. Louis Post-Dispatch reported, according to the Associated Press.

Chief Investment Officer Rick Dahl received the biggest payment – $114,000 – early this year, the news report said. The next largest bonus was $29,400 for the system’s hedge funds manager.

Pension officials said the payments were based on Missouri’s fund outperforming the market. Under an incentive plan approved by the pension board, the state fund is compared to similar portfolios over the last five years.

Missouri ‘s fund declined in value by 23.9% last year, but it still did better than many others. According to the AP, board members said the incentives have helped the state keep managers who, over the past five years, helped Missouri’s fund earn $597 million more than comparable portfolios.

However, Missouri Governor Jay Nixon called the bonuses “unconscionable.”

“It defies common sense that these folks would preside over the loss of almost $2 billion and receive bonuses,” Nixon said, according to the news report, adding that it was “especially galling” that the bonuses came when the rest of state employees aren’t getting raises this year.

Nixon said the bonus system is broken and vowed to fix it.

MOSERS, which covers about 55,000 state employees and 30,000 retirees, was named a Plan Sponsor of the Year for 2008 (see  Public Plan Sponsor of the Year: State of Missouri: “Show Me” State ).