Sunday, April 28, 2013

Mass PRIM Does The Right Thing: Salary Increase for Pension Staff


Mass PRIM Does The Right Thing:  Salary Increase for Pension Staff

Kudos to the Massachusetts PRIM Board for authorizing compensation increases for the staff.  Pension & Investment reports that it obtained the letter authorizing a series of increases[1].   In order to operate a public pension plan, especially in a highly competitive market like Boston, you must provide a reasonable level of base and incentive compensation. PRIM is asking its staff to recommend managers earnings millions of dollars of compensation for managing small slices of the pension plan. You would think that Massachusetts State Treasurer Grossman would want to attract and retain competent investment professionals.  I guess not.  He voted against the increases.

In December 2003, P&I graciously offered me the opportunity to explain why I resigned as CIO for the North Carolina Retirement System ("Why I Quit -- We fought the Legislature for more resources — and lost"). I was lucky enough to have our former State Treasurer, Richard Moore as my advocate, but it wasn't enough at the time.  It took hard work and advocacy by both Treasurer Moore and his successor, Janet Cowell, to finally make progress in subsequent years.  While public plans should not replicate the compensation packages found in the private sector, they have to provide enough compensation to bring professional management to their investment assets.

It’s unfortunate that compensation issues remain contentious a decade later.  Meanwhile, money managers continue to get fabulously rich off these plans. It is cheap political theatre for public officials to rail against reasonable compensation for professional staff.    Moreover, it saddens me that P&I still thinks that salary increases are newsworthy. 




[1] http://www.pionline.com/article/20130426/DAILYREG/130429921/22-massprim-staffers-get-raises

No comments:

Post a Comment