You wanna give $300,000 in bonuses? OK, then you get $300,000 less in funding! Missouri Senate cuts payments to retirement system!

From John Curry, April 6, 2009

[Missouri] Senate Appropriations Committee wants to cut MOSERS bonuses

By: Virginia Young Post-Dispatch
Jefferson City Bureau
stltoday.com

JEFFERSON CITY [MO] — A Senate committee has signaled its strong disapproval of bonuses that a state pension fund recently gave to its investment staff.

The Senate Appropriations Committee voted today to cut $300,000 from the state’s contribution to the Missouri State Employees Retirement System.

Committee Chairman Gary Nodler, R-Joplin, said the committee wanted to send the pension system “a strong message that we don’t approve” of $300,000 in bonuses that the system gave out.

The Post-Dispatch reported Sunday that the pension system gave its 14-member investment staff bonuses totaling about $300,000, even as the pension fund lost nearly $1.8 billion.

MOSERS officials said that while the fund lost money in last year’s stock market meltdown, it lost less than comparable portfolios.

The system’s incentive plan compares the fund’s performance to a benchmark over a five-year period. Over that period, MOSERS saved the state nearly $600 million, according to the plan’s executive director, Gary Findlay.

Nodler said he was “not buying that.” He said managers don’t deserve bonuses when the fund loses money except “maybe in the Alice in Wonderland world. But we don’t live in the Alice in Wonderland world.”

“A bonus should be a reward for an increase, a net gain,” Nodler said.

“I don’t see an appreciable difference in this and the bonuses at the federal level” involving AIG, Nodler added. “It’s basically the same issue — bonuses being given for depleting funds. Most people are offended by bonuses being given to losing propositions.”

[Hmm...maybe we should invite those good folks in Missouri to visit STRS Ohio if they want to see what a REAL wonderland looks like -- sculptures, stairways to heaven, waterfalls and all!]