Pa. pension up 12%, still $14B short; 8% raise for boss

The $20 billion - plus Pennsylvania State Employees' Retirement System says investment earnings rose around 12% last year, beating the yearly target of 7.5% and its five-year average of 0%.

But pension officials warned it would still take years of above-target performance to overcome the current $14 billion gap between what the state has promised to pay retirees, and the assets it has to pay those checks with.

The system also approved its latest rejiggering of its private money manager contracting system, voting to send another $150 million to Arden Asset Management LLC as part of a "diversification" of assets from the fund's former "Absolute Return" hedge fund portfolio.

And it voted "to grant an 8% pay raise" to chief investment officer Anthony Clark, who made $187,000 in 2011, ranking him behind his counterparts in California, Texas, New York, New Jersey, North Carolina and other states, according to a table published by Bloomberg News, which SERS published as part of its press release.

(Only one man on the list, Texas Teacher manager T. Britton Harris IV, makes as much as $1 million; most are low to mid six figures. Which means, by investment banking or corporate money management standards, these guys are a bargain.)

The table also showed Pennsylvania's fund underperformed each of those states in 2011, the last year for which comp data was available. But, according to the table's headline, "Higher Compensation Doesn't Always Equal Best Returns."

Gov. Tom Corbett, who is fond of calling Pennsylvania's pension obligations a "tapeworm," says he wants to cut pension subsidies.

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