Failure PAYS (Unless You’re a Retiree)

STRS and Mike Nehf found on a different blog......

From John Curry, December 20, 2008

"The Chimpy 'failure culture' that rewards stupidity has got to be one of the things we throw away in the coming era. America can’t afford it."

http://reconstitution.us/rcnew/?p=3037
November 15, 2008

This country started blatantly rewarding utter failure in December of 2000, when a guy who in all likelihood lost the country’s biggest election was awarded the Presidency anyway. The guy awarded the office had never, in the entire course of his life, succeeded at anything he tried. Yes, the wingtard talking heads (largely supported by the mainstream media) claimed that this lifetime failure had done well as the Governor of Texas, but just a few scratches at the surface revealed that Texas under the stweardship of this failure has become a place of alarming poverty, sickening pollution, and thuggery in the “justice” system.

The failed Governor of Texas went on failing in a spectacular fashion, dragging this country into an expensive, unending war against people who had no beef with us. What did we do about it? In 2004, the failure was awarded a clear majority of votes (and I do believe he won a majority of the votes, even if I doubt he actually won Ohio.) It seemed the Age of Failure had arrived in force in America. Gone was the hard work and honest behavior ethic that made America a great place to be; instead, we saw failure after failure rewarded AT THE EXPENSE of hard working, honest people. Failed CEOs were rewarded with multimilliondollar bonuses, and even the ones who were fired were sent off to their retirement with lucrative “severance” packages that represented the lifetime earnings of dozens, or hundreds, of workers. What did those workers get? They got fired. Over and over, we saw it happen. Enron. HP. Countless banks, insurance concerns, airlines, investment brokerages. For gutting their companies and destroying the lives of loyal employees, executives made out like bandits. The private sector, in other words, was behaving just like the Government, and “shareholders” in both arenas seemed to be willing to let it all go by.

Then, of course, the failures got so numerous, and so blatant, that we couldn’t ignore them anymore. Katrina finally shined a light on just how miserable the failure in Government has been, while the collapse of investment funds and banks threatened to end the retirement plans of millions of aging American workers. Suddenly, we were awakened to just how bad things had gotten in America.

Uh, MOST of us were awakened, anyway. While it might be true that the 401(k) and other pension systems have collapsed for tens of millions of Americans, the people actually running those systems haven’t taken notice yet, in a lot of places. Let us look at Ohio, where the loss of money has been astronomical-and the bandits CONTINUED, and continue, to pilfer the scraps that are left.

The turmoil on Wall Street has sucked billions of dollars out of Ohio public-pension systems, but many of the pension employees who are paid to invest retirees’ money still will reap tens of thousands of dollars in bonuses.

This year, 10 investment officers for the State Teachers Retirement System pulled in bonuses of $200,000 or more, and two crossed the half-million mark in combined salaries and bonuses.

Thirteen investment officers for the teachers’ pension could reach $500,000 in total pay next year under a bonus plan approved by the pension board, although many will fall short unless the market recovers.

While a depressed market will pinch the performance bonuses somewhat, it doesn’t necessarily spell the end of six-figure jackpots for pension officers who oversee declining portfolios. A pension officer whose assets lose value — but less value than average for a comparable portfolio — still qualifies for a bonus, in some cases reaching into tens of thousands of dollars.

In all, the State Teachers Retirement System paid nearly $6 million in bonuses to 89 investment officers this year, most of whom have base salaries of $100,000 or more.

The pension fund affects 449,000 people, including about 180,000 active teachers, 140,000 retirees and 120,000 beneficiaries. Some retired teachers are fuming about the bonuses at a time when their pensions are bleeding value.

“When retirees are struggling to pay for groceries, there’s so much insensitivity to see millions and millions of dollars going to pay for bonuses,” said Molly Janczyk, a retired Columbus school teacher. “No one faults them for bonuses, but it kind of rubs salt in the wounds to see these kinds of bonuses during the economic downturn.”

The bonuses have touched off a brush fire of criticism among members of a group called Concerned Ohio Retired Educators, which formed in late 2003 in response to perceived extravagances at the teachers’ pension system.

A Web log run by a member of the activist group, retired Columbus teacher Kathie Bracy, has been abuzz with comments on the bonuses.

“Retirees think it’s only fair that (investment officers) pull in their belts the way we all have to pull in our belts,” Bracy said.

The teachers fund’s top earner, assistant director of investments Mary Ellen Grant, took home $529,200, including a bonus of $259,200.

That’s nearly as much as her counterpart in California. Christopher Ailman, chief investment officer for the California State Teachers Retirement System, took home a bonus of $295,000 this year. Ailman oversees $147 billion in assets for the nation’s largest teacher pension, compared to $63 billion for the Ohio system.

Although the California teachers’ pension has a larger investment staff, only 15 officers qualify for performance bonuses, a spokeswoman for the system said.

Officials from the Ohio system defend the merit pay, saying the bonuses pay for themselves several times over in improved performance of the system’s portfolio. They also note that while many investment officers clear $200,000 a year, that’s still far less than they would be paid in the private sector.

“In order to attract and retain quality people at STRS Ohio, and you need to have the best and brightest to have the kind of investment performance you want, you have to have these kinds of incentives,” said Michael J. Nehf, executive director of the pension system. “The money we pay in those bonuses is repaid many times in terms of our investment performance.”

Mike, Mike….. you’re a failure. Yes, the times have become challenging for you, but you still failed, spectacularly. How can you justify paying these bonuses out of a crumbling system by talking about the supposed “talents” of the people who helped to make this collapse possible?

The Chimpy “failure culture” that rewards stupidity has got to be one of the things we throw away in the coming era. America can’t afford it.

http://reconstitution.us/rcnew/?p=3037