STRS: A little damage control here; at least they're reviewing the PBI program; maybe they'll make some changes - what do you think?
From Mary Ann Cervantes, November 6, 2008
Subject: [News] Message to STRS Ohio Members From Retirement Board Chair Mary Ann Quilter Cervantes
As the chair of your Retirement Board, I would like to take this opportunity to write to you about the Performance-Based Incentive (PBI) Program for STRS Ohio Investment staff. On behalf of the board, I want to thank all those members who have written to us either in support of this program or with concerns or questions. This input is very valuable to us.
In managing our investments, STRS Ohio has three basic choices. We can hire outside investment managers, we can do much of the investing "in-house," or we can purchase only passive investments, which require minimal staff. Though we use all three methods for portions of our investments, 80% of our assets are managed by internal staff, including almost all real estate investments.
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. To attract and maintain this staff, we have to pay competitive salaries. The compensation program for Investment staff came about through careful study by the Retirement Board with recommendations from our outside investment consultant and a specialist in investment compensation and incentive programs. This program includes incentives for eligible Investment associates who outperform the benchmark. With this program in place, the net value added over the benchmark was $215 million for fiscal year 2008.
The Retirement Board is aware of the interest this topic has generated among some members. We are currently reviewing the PBI program and plan to continue this discussion at the November board meeting. We will use our Web site, e-mail news service and newsletters to convey the results of this discussion.
I want to take this opportunity to again thank our members for sharing their thoughts with us on this important issue. I am confident that with your support and input, and under the leadership of our new Executive Director Michael Nehf, STRS Ohio will continue to manage its responsibilities to its members with care and diligence.
Mary Ann Quilter Cervantes
Chair, State Teachers Retirement Board
Subject: [News] Message to STRS Ohio Members From Retirement Board Chair Mary Ann Quilter Cervantes
As the chair of your Retirement Board, I would like to take this opportunity to write to you about the Performance-Based Incentive (PBI) Program for STRS Ohio Investment staff. On behalf of the board, I want to thank all those members who have written to us either in support of this program or with concerns or questions. This input is very valuable to us.
In managing our investments, STRS Ohio has three basic choices. We can hire outside investment managers, we can do much of the investing "in-house," or we can purchase only passive investments, which require minimal staff. Though we use all three methods for portions of our investments, 80% of our assets are managed by internal staff, including almost all real estate investments.
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. To attract and maintain this staff, we have to pay competitive salaries. The compensation program for Investment staff came about through careful study by the Retirement Board with recommendations from our outside investment consultant and a specialist in investment compensation and incentive programs. This program includes incentives for eligible Investment associates who outperform the benchmark. With this program in place, the net value added over the benchmark was $215 million for fiscal year 2008.
The Retirement Board is aware of the interest this topic has generated among some members. We are currently reviewing the PBI program and plan to continue this discussion at the November board meeting. We will use our Web site, e-mail news service and newsletters to convey the results of this discussion.
I want to take this opportunity to again thank our members for sharing their thoughts with us on this important issue. I am confident that with your support and input, and under the leadership of our new Executive Director Michael Nehf, STRS Ohio will continue to manage its responsibilities to its members with care and diligence.
Mary Ann Quilter Cervantes
Chair, State Teachers Retirement Board
posted by Kathie Bracy at 9:30 PM
<< Home