Columbus Dispatch on 5/15/09 bonus vote

Board eliminates bonuses in bad years
THE COLUMBUS DISPATCH, May 16, 2009
By James Nash
Dozens of investment officers for the state teachers' pension will lose their merit bonuses completely if the fund dips into the red.
The board of the State Teachers Retirement System voted yesterday to eliminate merit bonuses for investment officers in years when the pension fund posts an overall negative return.
For months, activist retired teachers have pushed for such a change, saying it's disrespectful to pay bonuses that sometimes top $100,000 when the fund is losing money. The pension board voted in January to slash bonuses during down years, but not eliminate them.
Under that formula, the pension system would have paid $3.4 million in bonuses to its 89 investment officers this year.
Yesterday, however, the board voted unanimously to eliminate bonuses in down years and to reduce them if the pension fund gains value but falls short of $65 billion. The fund currently has about $51 billion, down from its October 2007 peak of $80 billion.
"I think it was extremely important for the board to take this step, especially in light of changes that will adversely affect not only retirees but active members as well," said Dennis Leone, a pension board member who pushed to cut the bonuses.
On Monday, state Rep. Matt Huffman, R-Lima, introduced a bill to ban the merit bonuses during years when the pension system posts an overall loss.
jnash@dispatch.com
Investment officers won't get the payouts if the fund sees an annual loss.