California Pension Reduces Bonuses, Raises

The California Public Employees’ Retirement System, the largest pension in the U.S., reduced bonuses 12 percent for investment officers after stocks dragged down returns. Most also went without pay raises.

The pension distributed $3.6 million in bonuses among 55 investment officers, down from $4.1 million last year, according to Calpers data. The sums are based on investment results over three years, including a 1 percent return last year and 21.7 percent a year earlier. Chief Investment Officer Joe Dear was granted $87,750.

“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,’’ said Brad Pacheco, a Calpers spokesman. “For us to keep highly skilled investment managers to run this fund, we have to be competitive and these awards are part of that compensation.’’

Volatility in capital markets has caused swings in the $244.5 billion pension fund’s returns while it assumes it will earn 7.5 percent annually to meet obligations. Calpers has earned 7.7 percent over the last 20 years.

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