Senate Appropriations Committee wants to cut MOSERS bonuses
JEFFERSON CITY — A Senate committee has signaled its strong disapproval of bonuses that a state pension fund recently gave to its investment staff.
The Senate Appropriations Committee voted today to cut $300,000 from the state’s contribution to the Missouri State Employees Retirement System.
Committee Chairman Gary Nodler, R-Joplin, said the committee wanted to send the pension system “a strong message that we don’t approve” of $300,000 in bonuses that the system gave out.
The Post-Dispatch reported Sunday that the pension system gave its 14-member investment staff bonuses totaling about $300,000, even as the pension fund lost nearly $1.8 billion.
MOSERS officials said that while the fund lost money in last year’s stock market meltdown, it lost less than comparable portfolios.
The system’s incentive plan compares the fund’s performance to a benchmark over a five-year period. Over that period, MOSERS saved the state nearly $600 million, according to the plan’s executive director, Gary Findlay.
Nodler said he was “not buying that.” He said managers don’t deserve bonuses when the fund loses money except “maybe in the Alice in Wonderland world. But we don’t live in the Alice in Wonderland world.”
“A bonus should be a reward for an increase, a net gain,” Nodler said.
“I don’t see an appreciable difference in this and the bonuses at the federal level” involving AIG, Nodler added. “It’s basically the same issue — bonuses being given for depleting funds. Most people are offended by bonuses being given to losing propositions.”
These are same managers that lost several million with Madoff!!!
They sound like fast talking salesmen to me. Spinning a good yarn!!
And how many Luxury Retreats did they attend?? Paid for by the Service Providers. Hummm
It’s Nodler and the other self-righteous anti-bonus grandstanders who are living in Wonderland - and displaying a fundamental lack of understanding of negative numbers. You see, although -1 is less than 0, it’s still a higher number than -3. In an environment where mega trends either lift or sink all boats, all that an investment manager can do is better or worse than the average. (In a mirror-image situation a few years back, the former Boatmen’s Bank became the laughingstock of the investment community when it touted its 31% return in ads when the S&P 500 (an unmanaged set of big-cap stocks) was up 33%, causing one critic to suggest that Boatmens was “the next-best thing to no management at all.”) Like it or not, investment performance is relative.
The comparison to AIG is also off the mark because many of those bonuses were “retention” bonuses - paid as an incentive not to leave the company, and in at least one instance a retention bonus was paid to someone who did leave the company. D’oh! In contrast, the MOSERS bonuses were for performance, measured objectively.
There is a lot of competition from the private sector for good investment managers. If the state makes it appear that it will not pay for good performance, valued employees who provide good performance will leave and go work someplace else that does pay for good performance. And they’ll likely be replaced by people who have no incentive to achieve good performance, just punch the clock every day.
Nodler is a grand-stander. NOBODY made money last year, not one single fund came out positive. That said, most Government employees don’t work on a “bonus” system. The Director of Revenue doesn’t get a bonus if tax revenues increase. The Secretary of State doesn’t get a bonus if more corporations are formed or more people vote.
The president of the UAW should receive a huge bonus because the United Steel Workers lost more members than the United Autoworkers.
Bonuses for losing money? Brilliant!!!
Nodler is either pandering or ignorant. Over a 5-year period, MOSERS outperformed similar programs in nearly every other state in the country. The CIO is an incredibly qualified man and Missouri would have lost even more money without him. This is pure politics, and it’s incredibly disappointing, if not surprising.
EPT - the Director of Revenue does not get a bonus if tax revenues increase because that is not the Director of Revenue’s job. The Secretary of State does not get a bonus if more corporations are formed because it is not her responsibility to get more corporations to form - it is her job to register them and keep track of them. Surely you understand that.