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Give retirees cost-of-living raises before rewarding investment managers

I am very disturbed with the recent news release, dated Nov. 24, 2013, that the Arizona State Retirement Board of Trustees is rewarding 10 investment managers $350,000 in bonuses for their performance in investments for the Arizona State Retirement System.

As a retired ASRS member, I have not received a cost-of-living increase since 2005. In the past eight years, the cost of living in Arizona has risen by 19.6 percent.

According to the second quarter “Your Retirement’’ newsletter, ASRS Director Paul Matson said, “At this time, the ASRS does not anticipate excess revenues to generate additional permanent benefit increases in the next several years.” This is ludicrous! Retirees won’t be seeing any cost-of-living increase for the next several years! Members of ASRS have waited long enough for a cost-of-living increase that is way past due. Performance bonuses should only be paid after ASRS is financially able to provide its members with an annual cost-of-living increase.

On behalf of myself and other retirees, I ask you to consider voting against the proposed bonuses for the 10 investment managers.

Donald Sherbo lives in Tucson.

One comment

  1. Here! Here!

    I agree with Mr. Sherbo to a point. While the amount of money needed to give employees a COLA is much larger than the $350K being paid out to the investors, it’s the message it sends to ASRS members that is important.

    My question is why you need so many high-priced investors? If ASRS had invested in no-load mutual funds that emulated the S&P 500, it would be up 40% over the past two years. ASRS members need to see how the investors did vs. the market, and if they deserve these bonuses then the investors would have needed to have outperformed the market by at least 10% during the last two years to deserve the raises. If they under-performed the market (S&P 500), then I say they don’t deserve these raises.

    I sympathize with the current ASRS employees who have had to give out increasingly higher amounts from their paychecks (currently about 11%) for the last decade, which is a high price to pay to not get an increase in their benefit when they retire. This is just to maintain what they have.

    ASRS Director Paul Matson needs to be transparent with any bonuses given to ASRS investors and explain to all ASRS members why the investors deserve these raises at the expense of current employees and retirees who have suffered the affects of the downturn the past decade.

    Brent Fine,
    ASRS Retiree

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