Lawmakers weigh big bonuses for some SC state workers
Tuesday, February 18, 2014
Last year, almost all of state government’s 56,000 employees did not get a pay raise. But 14 workers shared $1.4 million in state-approved bonuses.
Now, some House lawmakers are questioning those bonuses, threatening to reduce or eliminate them.
“One guy last year, his salary was $300,000. Well his (bonus) was $300,000,” said state Rep. Jim Merrill, R-Berkeley, chairman of the S.C. House budget subcommittee that oversees state salaries. “I have a hard time swallowing a guy, who is being paid over a quarter of a million dollars to manage funds, is being paid more than $300,000 when we’ve got state employees that we can’t even give a tiny raise to.”
But supporters of the bonuses say they don’t go to average state employees. They are paid to workers at the state Retirement System Investment Commission, who manage the state’s $27 billion retirement fund – the state’s single largest asset.
“Performance-incentive compensation is a standard compensation package within the professional investment industry and helps South Carolina attract top talent,” Greg Ryberg, the investment commission’s chief operating officer, said in a written statement. “Recruiting and retaining the best talent for the retirees and employees of South Carolina is the one and only imperative in the consideration of our compensation package.”
The state Senate first approved the bonuses – part of the commission’s Performance Incentive Compensation program, commonly referred to as PIC – in June 2011, with the first bonuses scheduled for the 2013 fiscal year that ended June 30.
The Senate approved the bonuses last year. But the House did not. The first bonuses – $1.4 million – were paid out in October. The next bonuses are scheduled to be paid out later this year, but only if the House approves them. Merrill, the chairman of the committee that must approve the bonuses, said he plans to have a hearing next month.
“I would like to see us have that same passion for state employees and rewarding state employees for the work they do that we have for the investment commission staff,” said Rep. Gilda Cobb-Hunter, D-Orangeburg, a member of the House committee.
But Wayne Bell, a state retiree and president emeritus of the State Retirees Association of South Carolina, said the investment commission employees are “not the usual state employee.”
“We are not competing for their talents and abilities with other state agencies. We are competing with Goldman Sachs. We are competing with Morgan Stanley,” he said. “I fully support a compensation system that gives us the ability to compete with the market. And if it means they make a lot more money than other state employees, then so be it, if that is what it takes to have the very best investing our money.”
The only workers eligible for the bonuses are investment employees – people who actually manage money. The workers get a bonus if they make money off their investments. The bonuses vary by position. The chief investment officer, deputy investment officer and directors are eligible for bonuses of up to 100 percent of their annual salary. Officers can get 80 percent of their salary as a bonus, while analysts can get up to 60 percent of their salary as a bonus.
State Treasurer Curtis Loftis, a member of the Investment Commission, has criticized the bonuses as “outrageous,” saying the commission’s investment returns are among the bottom 25 percent among public pension plans. However, a spokesman said Loftis has not spoken to lawmakers about the bonuses and “does not plan to insert himself” into its budget process.
State Sen. Nikki Setzler, D-Lexington, chairman of the Senate committee that must approve the bonuses, said other state employees earn bonuses for performance, including Department of Commerce recruiters who attract companies to South Carolina.
“These folks, because of the expertise and knowledge, ought to at least be considered,” Setzler said. “But it’s also something that has to be reviewed and looked at very carefully on a regular basis, no question about it.”
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