by Tim Weaver
The California Public Employee’s Retirement System dropped performance bonuses 14% this year from last according to data released by the pension. In 2011 $4.1 million worth of bonuses were paid out for executive performance, this year the number will be in the area of $3.6 million, according to Bloomberg.
With over 1.6 million members throughout California, Calpers is the single biggest public pension in the United States. The pension peaked in total value at $260.6 billion before the recession. In 2008 the fund lost an estimated $12 billion in investment income and the next year another $55 billion.
Brad Pacheco, a spokesman for the Sacramento based pension released a statement that read “The performance awards are based on multiple years of performance and we are a long-term investor, and that’s what we are trying to incentivize… For us to keep highly skilled investment managers… we have to be competitive and these awards are part of that compensation.”
Each year Calpers spends roughly $40 million on benefits and compensation for investment staff, however this year wages have been frozen for the executive staff. Compensation is based on a rolling three year performance average.
Calpers claims that the wage freezes and bonus cuts will save the fund $114 million.