Copyright © 2020 Albuquerque Journal
SANTA FE – A proposed hefty pay raise for a New Mexico pension fund’s chief investment officer is being met with scrutiny by Gov. Michelle Lujan Grisham’s administration.
Board members of the pension fund that covers teachers and other education employees voted last month to increase the salary of Bob Jacksha, the chief investment officer, by roughly 32% – from $265,000 to $350,000 per year.
The Educational Retirement Board’s executive director said the raise would be well-deserved because the pension fund’s investment returns have been consistently higher than the market index.
“We’re very aware that a lot of members and other state residents are going through a hard time, but we simply can’t afford to lose (him),” ERB Executive Director Jan Goodwin told the Journal.
However, a Lujan Grisham spokeswoman suggested Tuesday the pay raise would be inappropriate at a time that New Mexico’s state government is under a hiring freeze and facing plummeting revenue levels.
“Certainly it is an eye-popping number – and all the more so given the fiscal straits everyone is in at this moment as a result of the pandemic,” Lujan Grisham spokeswoman Nora Meyers Sackett said.
“It would seem to be completely out of line with the reality everyone is dealing with financially right now,” she added. “And that will be a factor in the decision-making process here, to be sure.”
It will ultimately be up to an executive branch agency, the Department of Finance and Administration, to decide whether to approve the proposed salary increase.
The ERB has also proposed large pay raises for top employees in previous years.
In 2018, for instance, the retirement system’s board authorized sizable raises for four top pension fund officials but those salary increases were eventually put on hold after then-Gov. Susana Martinez’s administration refused to carry them out.
As of last year, the pension fund covered roughly 60,000 active members and about 50,000 retirees.
The $12 billion fund is partially managed internally, and outperformed the market index by $1.3 billion over a recent 10-year period, Goodwin said.
However, the fund’s average returns over the past five years have fallen short of its 7% investment target, which must be met over time in order for the fund to meet long-term solvency goals.
In addition, New Mexico’s bond rating was downgraded in 2018 due largely to concerns over pension liabilities, as both the ERB and the state’s other large public retirement system – the Public Employees Retirement Association – have seen their unfunded liabilities increase in recent years.
Meanwhile, Jacksha already makes more money in his current position than Cabinet secretaries in the Lujan Grisham administration – and the governor and other statewide elected officials.
Per state statute, the governor is paid $110,000 annually, while the secretary of state, auditor and treasurer each get paid $85,000 per year.
Cabinet secretaries in the Lujan Grisham administration currently make $156,000 annually.
Pension fund officials are among the most highly paid public employees around the nation, however, and other state investment officials are paid at similar levels to Jacksha, according to the state Sunshine Portal.
The pay raise for Jacksha was approved by a 4-1 vote by the ERB board at its June meeting, according to draft minutes.
Public Education Deputy Secretary Adan Delgado cast the lone dissenting vote, while board chairwoman Mary Lou Cameron and three other members voted in favor.
There were no other salary increases approved by the board at the meeting, Goodwin said.
Jacksha has been the ERB’s chief investment officer since 2007. He previously worked for the State Investment Office.