Georgia Dunn: If the fund has lost money, the board cannot justify paying bonuses on money not made

From Georgia Dunn, October 19, 2008
Subject: STRS board

I am extremely upset to hear that the STRS board is considering bonus checks for its 100 investment managers despite the fact that the downturn in the market caused STRS to lose 25 billion dollars or so.

I realize these people work hard and that they often receive bonuses for the increased income they generate for the system. I believe in the past three years they have received large bonuses. They probably deserved them then; however, not now.

I know that the economic crisis is not the investment managers' fault; nevertheless, if the fund has lost money, the board cannot justify paying bonuses on money not made. I have retirement money invested in the market and I lost about 30% of its worth, also through no fault of my own; I will need to
live on my retirement check from STRS without pulling any additional funds. The investment managers will need to do the same: live on their generous salary and benefits without a bonus.

The board's duty is to run the STRS board efficiently; paying bonuses when no additional revenue has been generated for the fiscal year is less than efficient: it seems to border on negligent.

What can the governor's office do to head off this travesty which will make for terrible press coverage if the board actually proceeds with the bonuses? I think among Ohio's teacher retirees (like me) this would be tantamount to the sales leader benefits that AIG paid out after the government "bailout."

Georgia Dunn
Retired Teacher
South Lebanon, OH