Missouri retirement system managers get bonuses

JEFFERSON CITY | Wall Street investment managers aren't the only ones who got big checks despite huge losses last year.

The 14-member staff of the Missouri State Employees Retirement System received almost $300,000 in bonuses even as the pension fund lost almost $1.8 billion, The St. Louis Post-Dispatch reported Sunday.

Chief Investment Officer Rick Dahl got the biggest payment, drawing $114,000 early this year. The next largest bonus was $29,400 for the system's hedge funds manager.

Pension officials said the payments were based on Missouri's fund outperforming the market.

Under an incentive plan approved by the pension board, the state fund is compared to similar portfolios over the last five years. While Missouri's fund declined in value by 23.9 percent last year, it still did better than many others.

But Missouri Gov. Jay Nixon, whose office didn't know about the payments until told by the newspaper, called the bonuses "unconscionable."

"It defies common sense that these folks would preside over the loss of almost $2 billion and receive bonuses," Nixon said.

He said it was "especially galling" that the bonuses came when the rest of state employees aren't getting raises this year.

"This bonus system is clearly broken, and we're going to fix it," he said.

Board members said the incentives have helped the state keep managers who, over the past five years, helped Missouri's fund earn $597 million more than comparable portfolios.

Pension board Chairman Wayne Bill, a Department of Agriculture employee and representative of state workers on the board, said Dahl "is worth every cent to us." Dahl's regular salary is $228,176.

The retirement system, known as MOSERS, covers about 55,000 state employees and 30,000 retirees. The fund comes entirely from investment income and taxpayer dollars. Keeping the best managers ultimately saves the state money, said Gary Findlay, the pension system's executive director.