first_imgArguing that it needs to stay competitive with the private sector, Los Angeles County’s pension board has boosted salary ranges by more than 40 percent for its investment staffers, potentially making them the region’s highest-paid public workers. A chief investment officer for the county Employees Retirement Association board can now make between $234,000 and $353,000, up from the previous range of $163,000 to $246,000. The highest-paid county employee is currently Dr. Bruce Chernof, who earns $306,800 a year as head of the Department of Health Services. The pension board’s move was prompted by the loss of four veteran investment officers, who could earn an average of $720,000 working for large public pension systems or in the insurance and banking industries, according to a survey conducted by county staffers. But David Kline, a spokesman for the California Taxpayers’ Association, said that highlights the struggle facing local governments in trying to fill vital jobs with highly qualified candidates. “Staff believes LACERA’s current pay practices are at a tipping point,” he wrote in a memo to the board. “Failure to address the current pay gap between LACERA and other competing employers in our labor market may significantly impede the ability to attract and retain qualified investment office candidates in the near future.” So far, no investment staffers at LACERA have gotten raises under the new system, but that could change at Rademacher’s discretion. “I’m responsible for setting the organization’s salaries and I’ll be looking at attracting and retaining qualified investment staff as it pertains to current labor market trends for the investment professionals,” said Rademacher, who is considering offering performance bonuses to county employees. Some public pension fund experts say the salary increases are justified because of the importance of wisely investing the huge sums of money contributed by current and retired workers. The California Public Employees Retirement System, for instance, is the nation’s largest public pension fund, managing some $240 billion in assets for 1.5 million workers and their families. The fund has gained $103 billion since the downturn in the stock market in 2002 and is now nearly 90 percent funded. The California State Teachers’ Retirement System, the second-largest fund in the nation, manages a $159 billion investment portfolio for 800,000 educators. The fund is 86 percent funded. And LACERA oversees $37 billion in investments for about 89,000 active employees and 51,000 retired employees. The fund is 91 percent funded. County Assistant Chief Administration Officer Sharon Harper said she doesn’t believe the pay increases at LACERA will pressure the county to increase salaries for other employees. “We will look at our managers and their responsibilities and determine what salary is appropriate for them,” Harper said. “So this does not guarantee an automatic increase for any of our employees.” Ratcheting up But Jon Coupal, president of the Howard Jarvis Taxpayers Association, said he believes the move by LACERA will be repeated at other levels of local government. “There is only one way it ratchets and it ratchets up,” Coupal said. “Public-employee compensation ratchets up at rates that far exceed those in the private sector. And at a time when the California economy is foundering and could be heading into recession, now is not the time to grant these extraordinary benefits.” Keith Brainard, research director at the National Association of State Retirement Administrators, said LACERA is competing with other investment organizations around the nation for limited talent. “It makes a big difference whether or not you get qualified employees,” Brainard said. In his memo, Rademacher noted that historically LACERA had striven to work within the salary structure adopted by the Board of Supervisors. Last month, the supervisors voted to fix pay inequities between supervisors and subordinates. In some cases, subordinates were making more than their bosses. The supervisors also voted to better link pay with performance and address pay levels beyond the current salary structure. The changes affected about 1,100 managers. [email protected] (213) 974-8985 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! “You certainly need to pay an adequate salary to get someone who will be a good steward of the money, but you can’t get into a bidding war with the private sector,” he said. “It’s simply impossible for every government worker to expect the same high salaries and perks that might come with a private-sector job that is similar but doesn’t have the public-service aspect.” Addressing pay gap About a month earlier, Los Angeles County supervisors increased the salary ranges for hundreds of management employees to address pay inequities. Gregg Rademacher, who earns $172,000 a year as chief executive officer of LACERA, noted that the county also has to compete against other taxpayer-funded entities for investment experts. last_img

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