Dispatch interview with Mary Ann Cervantes re: STRS bonuses

John Curry: How low can one go to clear the bar and still earn a bonus?
Columbus Dispatch, November 12, 2008
By James Nash
Chief of pension fund for teachers defends bonuses

The chairwoman of the pension fund for Ohio teachers tried to quell a controversy over bonuses paid to investment officers by pointing out that they helped the pension fund earn an extra $215 million.

In a message to current and retired teachers, Mary Ann Quilter Cervantes, chairwoman of the State Teachers Retirement System board, said the board will take another look at bonuses that have padded the salaries of investment officers by tens of thousands of dollars.

On Nov. 2, The Dispatch reported that the pension system awarded nearly $6 million in merit bonuses to 89 investment officers.

Ten of the officers received bonuses of $200,000 or more.

Some retired teachers are complaining that the pension system continues to pay generous bonuses even while pension investments lose billions of dollars in value because of the sharp stock market downturn.

Cervantes said the teachers pension has outperformed its benchmark by $215 million, in part, because of the performance incentives for investment officers.

“Because of the success that our internal investment staff has had over the last 30 years, both in times of market upswings and declines, the Retirement Board has chosen to keep the bulk of its investment activity managed by its own staff,” she wrote.

“To attract and maintain this staff, we have to pay competitive salaries.”

The board does expect to reconsider the issue this month, she wrote.

— James Nash
jnash@dispatch.com

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