BOSTON (State House News Service) – The board overseeing the $60.2 billion state pension fund on Tuesday voted 7-2 to boost the salary of its executive director by $65,000 to $360,000, as its incoming chair expressed discomfort with the move. The director, Michael Trotsky, is also receiving a $118,000 bonus.
Trotsky, a Belmont resident who previously served as executive director of the Massachusetts Health Care Security Trust Fund and worked for Par Capital Management Inc., first took the job of executive director in 2010 and made $77,000 less than his predecessor, Michael Travaglini.
His last base salary increase came in 2012, after the fund’s chief investment officer left for another job. Trotsky, who is receiving an annual 40 percent performance-based bonus this year, took on the role in addition to his duties as executive director, and his salary increased by $50,000 to $295,000.
Treasurer-elect Deb Goldberg, who takes over as chair of the Pension Reserves Investment Management (PRIM) board in January, said the fund has seen “higher than expected investment gains” while under Trotsky’s oversight, which has helped reduce the unfunded pension liability.
“When appropriate, it is critical that any compensation increases be implemented prudently and incrementally,” she said in a statement. “At a time when we are facing 9C cuts and funding to local communities is being threatened, public servants need to also tighten their belts. In that context, a significant raise, albeit well-deserved, is uncomfortable and not necessarily appropriate at this time.”
Goldberg did not attend Tuesday’s PRIM board meeting. She was scheduled to be in New York City for a meeting of treasurers-elect, she told the News Service last week.
Asked whether Goldberg would seek to rescind the raise after she takes over as treasurer in January, a Goldberg spokesman said that was unlikely. “But going forward the Treasurer-Elect strongly prefers that compensation increases be implemented more smoothly, prudently and incrementally,” said the spokesman, Chris Keohan.
Outgoing Treasurer Steve Grossman and Janet Fogel, the designee from Gov. Deval Patrick’s budget secretariat, voted against the increase for Trotsky.
While he commended Trotsky’s performance, Grossman said he was concerned about an immediate pay increase and he prefers raising Trotsky’s salary over a period of time, which would be “more appropriate.”
Grossman cited “challenging budgetary times,” and pointed to the Patrick administration identifying the $329 million shortfall in the state budget.
Fogel said she shared the treasurer’s concerns.
But Robert Brousseau, who chairs the board’s administration committee, called a comparison of state budget woes to the PRIT fund “apples and oranges.”
The fiscal 2015 budget has a revenue problem, Brousseau said, and “that’s not our problem here.”
“He works at the pleasure of the board, he’s not elected,” Brousseau said of Trotsky, adding that the pension fund chief did not request the pay raise. “It’s a different situation.”
Brousseau also pointed to compensation of an official working for the Teacher Retirement System of Texas, totaling $900,752.
The PRIM board voted for the pay increase to retroactively take effect on Dec. 1, 2014.
Trotsky was not available for comment after the meeting.
Trotsky’s pay increase comes a day after a special commission tasked with reviewing public officials’ compensation recommended sizeable raises for eight top officials, including the governor and the House speaker and Senate president. The commission recommended that the governor’s salary be increased to $185,000 from $151,800, and the treasurer’s salary to be increased to $175,000 from $127,917.
Grossman said he would prefer for the commission’s recommendations to be implemented “piecemeal.”
The Pension Reserves Investment Trust (PRIT) includes pension assets that fund current and future retirement benefit obligations for state retirement systems that include public employees, teachers and municipalities.
The PRIT fund ended the fiscal year in June with “its highest net asset value since its inception in 1985,” according to its annual financial report.
During an October PRIM board meeting, members issued an annual job review and praised Trotsky’s efforts, saying he stabilized the organization and reduced staff turnover.
The board’s compensation committee in November voted 4-1, with Grossman as the lone no vote, to recommend the pay increase. The committee said Trotsky taking the combined role of executive director and chief investment officer saved PRIM over $300,000 a year.