At STRS....you get paid extra to fail 'less badly'!
He also could have said that STRS has a PBI plan which says: “Heads I win, tails I win.” Give me my bonus or else.
From John Curry, January 26, 2009
Investors' bonus system is otherworldly
Monday, January 26, 2009
Columbus Dispatch
Columbus Dispatch
I am a retired Ohio teacher. A portion of all the money I paid into my retirement system goes to investment officers whose job it is to invest it wisely. The board of the Ohio State Teachers Retirement System recently voted to reduce bonuses paid to these investment officers in years when the system loses money ("Pension board adjusts bonus system," Dispatch article, Jan. 17).
I should cheer?
These officers already make an average of $200,000 per year. I presume that their compensation is for doing their jobs with competence. In most jobs, if you do well, you get paid. If you excel, you get a raise. If you do poorly, you get fired.
Not at the STRS. Last year, when the investment officers did poorly (the fund lost money), they got an average bonus of $100,000. That's my retirement money they got, for failing.
Recognizing the gross injustice of this, the board voted to put things right. Now, if the pension fund loses money, investment officers will only get an $80,000 bonus. I'm still not cheering.
If we wish to pretend that, in a rising market, where almost all investments are making money, STRS investment officers deserve a bonus for simply doing their jobs, then in a down market, where almost all investments are losing money, shouldn't they be fired?
Well, no, because it wasn't their fault. Exactly!
In the complex and mysterious world of high finance, which the average person couldn't possibly understand, you get paid extra to fail less badly.
RICHARD MANSFIELD
New Albany
New Albany
posted by Kathie Bracy at 12:31 PM
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