According to the Columbus Dispatch, the board voted 6-3 to suspend the bonus payments from February through June. After that, the bonuses will be cut in bad economic times, but enhanced when pension investments do well, according to the report.
The board had decided to study the matter of the bonuses last fall (see Investment Losses Lead STRS Ohio to Review Allocation, Pay Practices ). Under the STRS Ohio Performance-Based Incentive (PBI) Program, eligible investment associates are able to receive an additional percentage of their base salary through a PBI payment, depending on both total investment fund performance and their individual goals over the previous fiscal year. Last year, the pension system paid nearly $6 million in performance bonuses to 89 investment officers, with 10 receiving $200,000 or more, according to the Dispatch. The system’s investment staff manage about 80% of the system’s assets.
“In these tough economic times, I wouldn’t think they would expect these kinds of bonuses,” said Marie M. Fetters, a retired teacher from the Miami Trace Local Schools in Fayette County said, according to the report. However, pension board Chairwoman Mary Ann Quinter Cervantes, a Lucas County teacher, voted against suspending the bonus payments. “We need to be a reliable employer,” she said, according to the Dispatch. “This is a switch on our word.”
On the other hand, board member Jeff Chapman, a retired teacher, responded “I’m also sensitive to the fact that it’s a promise, but these are extraordinary times.”