(updated with correction)
Two large public pension plans recently adopted new compensation plans executives hope will enable them to recruit and retain key investment professionals.
The New York City Retirement Systems and the Florida State Board of Administration, Tallahassee, devised the pay programs as a result of compensation studies showing that the plans' fared poorly among similar-size public plans. These efforts have taken place amid constant threats of competition for investment professionals posed by the private sector.
“While we can't compete with Wall Street, we have to be in the ballpark when it comes to our public pension peers,” said Scott Evans, chief investment officer of the $163.4 billion New York City Retirement Systems. City pension officials have lamented for many years that investment staff salaries were too low.
Earlier this year, the city comptroller's office authorized a study of public plans with $80 billion or more in assets. “What we found was that we were lagging our peers significantly,” Mr. Evans said.
“Armed with those results, Comptroller Scott Stringer, investment adviser and custodian of the pension system, and Mr. Evans, had to convince the trustees at each of the five pension funds within the city's system to approve a new payment system. In a few months, Mr. Evans and some 40 other investment professionals in the comptroller's office will get pay raises.”
The money will come from pension system assets, but Eric Sumberg, a spokesman for Mr. Stringer, declined to discuss details because the plan hasn't been implemented yet.
“This is related strictly to attracting and retaining talent,” Mr. Sumberg said.