SC agency staff gets $1.4 million in bonuses

Friday, Oct. 4, 2013 1:07 PM
Last updated 6:53 PM
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COLUMBIA — Fourteen staff members of the agency that invests pension money for South Carolina public employees are receiving a combined $1.4 million in bonuses for the portfolio’s performance.

The Retirement System In­vest­ment Commission approved the performance payments last week for the agency’s investment staff. The amounts range from $30,000 to $300,000. Treasurer Curtis Loftis cast the lone “no” vote.

The payments were calculated according to a “performance incentive” plan that commissioners, including Loftis, approved unanimously last year. They are based on how returns on investments compare to goals over a one- to five-period.

Every eligible employee received the maximum under the plan, with amounts varying by position and base pay. It allowed the four highest-paid staff – the chief investment officer, deputy investment officer and two directors – to double their base salary.

The commission contends the payments are not bonuses, but rather part of employees’ compensation, structured to attract and retain high-caliber staff in a way that rewards performance.

“Investment employees are compensated, by intention and in large part, by incentive pay,” said commission Chairman Reynolds Williams. “The incentive plan works as intended, and RSIC investment professionals contributed nearly half a billion dollars to the retirement fund through their active management. We believe that $1.4 million is a small price to pay for that kind of return.”

State senators also approved the plan last year, as law required. On Friday, Loftis urged the Legislature to revisit the issue, saying “the mismatch of returns, fees and bonuses cost the state hundreds of millions of dollars every year.”

Loftis has long complained that the agency pays too much in fees for too little return.

“It is clear the commission should spend less time paying outrageous bonuses and more time raising returns and lowering fees,” he said.

The state’s portfolio is worth $27 billion. Last month, the agency reported a net return, after fees and expenses, of 9.99 percent for the fiscal year ending June 30. The state assumes a 7.5 percent annual return when calculating what it needs to keep the pension system solvent.

Last October, 12 employees split a total of $621,620, after the 2011-12 fiscal year closed with earnings of just 0.4 percent after fees, attributed to a rough last half of 2011. Loftis also voted against those payments.

Performance-based payments have been part of the agency’s compensation plan since 2010. Last year’s represented the first payments to staff under revisions initially approved in March 2012 by the commission’s three-person compensation subcommittee, which includes Loftis. Each of the plan’s pieces received a unanimous vote of approval, following recommendations of the international consulting firm McLagan, which was hired to evaluate the plan.

The full commission unanimously approved the incentive plan a week later. It then gave unanimous approval to the agency’s compensation policy in May 2012, according to the meeting minutes.

As for why Loftis voted for the formula but against the payouts, his spokesman Mark Boone said, “When it has come time for distribution, the treasurer has voted against paying the bonuses, especially in light of poor performance.”

The comptroller general’s office said 13 employees are receiving their money in Friday’s paychecks. One person asked to be paid later this month, said Eric Ward, spokesman for the state’s top accountant.

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seenitB4 10/04/13 - 03:11 pm
Well now

That is a huge Christmas gift!

Stunned 2
Stunned 2 10/04/13 - 04:11 pm
Are they state employees?

Are they state employees or do they work for a private agency? Seems like this money should go to the taxpayers and offset other public expenses.

mosovich 10/04/13 - 10:07 pm
They made their stated goals...

They made their stated goals and the bonuses were factored in, so they should get the money.. That'd be like telling your kid, "if you go to the mailbox and get the mail I'll give you a cookie" Then you they do as you asked, earned the cookie, and you decide you're hungry and you eat it.. They earned it, they should get it..

Young Fred
Young Fred 10/05/13 - 02:05 am
9.99% is a pretty nice

9.99% is a pretty nice return.

Stunned 2, I can almost promise they are not state employees. Employees of the state just don't tend to perform at that level.

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