PERA board approves “asinine” $893,268 pay, perks for CEO
DENVER—Colorado Public Employees’ Retirement Association (PERA) board members voted to offer CEO Greg Smith a 20 percent pay raise and big-dollar bonuses. The CEO of the $45 billion state employee pension system will receive as much as $893,268 in total compensation in 2018.
“The board is acting like this is chump change. Calling accountability ‘asinine’ is spitting on Colorado families and the people who rightfully expect government accountability,” said Jonathan Lockwood, executive director of Advancing Colorado. “Treasurer Stapleton got it right when he called for these proposed bonuses to be tied to the fund’s return on investment, or measured improvement of PERA’s fiscal nightmare.”
According to The Denver Post, Smith will receive $394,000 in base salary in 2016. His current contract caps the discretionary bonus at 20 percent, but his new deal, “will allow a maximum 30 percent bonus for ‘exceptional performance,’ worth as much as $118,200.”
From the Gazette:
“Stapleton, who wasn’t at the meeting but called into the conference, proposed that the bonuses should reflect things like the fund’s return on investment or decrease of the $26 billion unfunded liability that hangs over the pension during actuarial evaluations.
When debating how the board will determine if Smith should receive up to a 30 percent bonus – roughly $120,000 per year before taxes – Board Member Lynn Turner called Stapleton’s recommendation ‘asinine.’”
During the tense meeting Colorado Treasurer Walker Stapleton, “proposed that the bonuses should reflect things like the fund’s return on investment or decrease of the $26 billion unfunded liability that hangs over the pension during actuarial evaluations.”
“There’s no accountability for missing investment targets. There’s no accountability in the contract for increasing the unfunded liability of PERA. There’s no sort of performance-related investment returns of the funds.”
The deal offers others perks including a severance payment worth a year’s salary if he is fired without cause and a $209,000 retention bonus if Smith stays for the length of this three-year contract.
From the Gazette’s Tuesday report on the details of ‘lavish’ contract for Colorado pension program chief being held “under wraps”:
“PERA oversees the retirement plans of thousands of Colorado retirees and current public sector employees. At the end of 2014, the plan had $44.2 billion in assets and paid out $3.9 billion to retirees.
Like almost all public pension systems across the nation, PERA isn’t taking in enough money to cover what it will owe future retirees based on longevity projections. But almost all of the plans are expected to be fully-funded within the next 40 years under reforms that were put in place by lawmakers in 2010.”