MOSERS advise bonuses on hold...they are "chicken feed" compared to STRS's bonuses!
From John Curry, July 19, 2009
Bonuses put on hold for some state retirement system workers
POST-DISPATCH
JEFFERSON CITY BUREAU, July 19 2009
By Virginia Young
POST-DISPATCH
JEFFERSON CITY BUREAU, July 19 2009
By Virginia Young
JEFFERSON CITY — The Missouri retirement system has put on hold $162,258 in staff bonuses in light of deep budget cuts elsewhere in state government.
Gary Findlay, executive director of the Missouri State Employees Retirement System, took the step days before the money was to be paid to 57 staffers on June 29.
Findlay said he made the decision after Gov. Jay Nixon's announcement that he was cutting or suspending $430 million in state spending to cope with plummeting tax collections.
In an e-mail to retirement system board members, Findlay said his employees had earned bonuses under a complex incentive pay program but that it would be "virtually impossible" to defend the payments because of the media's "gross mischaracterizations" of the incentive plan.
The retirement agency, known as MOSERS, handles pensions for state workers and most public colleges and universities. An independent board governs the system, which employs about 72 people to oversee the investment portfolio and administer benefits.
The Post-Dispatch reported in April that the retirement system had paid bonuses totaling nearly $300,000 to its 14-member investment staff and roughly $160,000 to its 58 operations staff members. The extra payments came during a year when the system's stock market holdings declined by $1.8 billion.
The bonuses put on hold for now are those of the operations staff, which receive them in June if employees and the agency meet certain customer-service goals. Operations staffers can receive up to 10 percent of their salaries as bonuses.
The investment staff receives bonuses at the end of the year, based on the portfolio's performance compared to certain market indices.
At the time of the Post-Dispatch report, Nixon criticized the bonuses, calling them "unconscionable."
On Wednesday, Nixon's spokesman, Scott Holste, said halting the June bonuses was "an appropriate first step to reform a process that has gotten out of control."
Findlay maintains that bonuses are key to retaining talented staffers whose expertise has helped MOSERS attain top rankings in customer service and reap hundreds of millions of dollars in above-average investment earnings over the last five years.
In his e-mail to board members, Findlay said the staff had delivered "services that exceeded even my high expectations." He said Missouri ranked No. 1 for service delivery compared to 13 similar-size public pension systems, based on a study by a company called CEM Benchmarking Inc.
MOSERS also spends less on a per-member basis to administer pensions, the study found. The cost of MOSERS' staff breaks down to about $70 for each retiree and state employee in the system, compared to an average of $92 for similar systems. Findlay said that means Missouri saves $1.8 million a year.
Nonetheless, Findlay said, given "gross mischaracterizations through omissions" in reports of the earlier bonuses, "it would be virtually impossible for me to defend the immediate payments to the operations staff regardless of how much they are deserved."
In a separate e-mail to the Post-Dispatch, Findlay said "the cultures we have created have made it a vibrant and rewarding place to work," and that MOSERS is "among the most highly regarded public retirement funds in the nation."
The board has been studying the agency's overall compensation plan. Board members decided last week to submit questions to Findlay and review the answers at their September meeting. A decision on the postponed bonuses is likely to be made then.
While the bonuses are in limbo, MOSERS employees will still receive 3 percent cost-of-living raises this month.
The rest of the state work force will forego raises; the Legislature defeated a pay raise recommended by Nixon.
MOSERS covers about 55,000 state employees and 30,000 retirees. It is funded entirely from taxpayer money and investment income.
posted by Kathie Bracy at 2:58 PM
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