The news account said the board approved the amount for 2008 performance, but delayed payment until 12 months after the 64-member investment staff achieves a positive year of returns – likely to be 2011 since the pension program has enjoyed solid gains this year. The incentives have historically been paid in March.
In addition to those in line for potential six-figure bonuses, the news report said 20 others could get $25,000 or more, with a total of 48 investment employees to get the bonus payments.
According to the news report, agency spokeswoman Vicki Hearing acknowledged some retirees were not happy with the bonuses, but said the board’s trustees decided they needed to reward employees who expected compensation for exceeding investment goals.
”They struggled because of the impact on the participants, and at the same time, you had staff that basically performed their job in the way they were asked to, with the idea they would be compensated for that,” Hearing said. ”This is about their active management of portfolios.”
Governor Jim Doyle has suspended bonuses for state employees since last year to save money, but the directive does not apply to the pension agency.
The board, which spent $2.45 million on bonuses last year, reduced the number of eligible employees by excluding anyone who missed investment benchmarks. Three top agency officials — executive director Keith Bozarth, deputy executive director Gail Hanson and chief investment officer David Villa — also declined bonuses.
The board manages and invests assets for the ninth largest public pension fund in the U.S., which includes retirement funds for state employees, teachers, and most municipal employees.
Similar investment bonus programs have proven controversial in a number of states where pension funds have suffered significant asset losses because of the down market (see Running the Fund: Pay for Performance ).
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