The California State Teachers’ Retirement System recorded a 13.4 percent investment return rate for 2016-17. Andy Alfaro Sacramento Bee file photo, 2009
The California State Teachers’ Retirement System recorded a 13.4 percent investment return rate for 2016-17. Andy Alfaro Sacramento Bee file photo, 2009

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CalSTRS is handing out big bonuses after a banner year

By Adam Ashton

aashton@sacbee.com

October 30, 2017 06:00 AM

A banner year at the stock market boosted the fortunes of the state’s $215 billion teacher pension fund, and it’ll net a couple of nice bonuses for the system’s top executives.

At a three-day meeting this week, the California State Teachers’ Retirement System plans to close the book on the 13.4 percent return on its investments it recorded in its last financial year by handing performance awards to Chief Executive Jack Ehnes and Chief Investment Officer Christopher Ailman.

Ehnes stands to gain a $224,682 bonus on top of his $420,000 salary, according to documents included with the agenda for the CalSTRS meeting. Ailman is in line to earn a $272,678 award for his performance beyond his $509,000 salary.

The bonuses do not count toward the executives’ pensions. They’re viewed as important incentives that CalSTRS and the California Public Employees’ Retirement System can offer to attract investment executives who could earn considerably more money in the private sector.

CalPERS in September awarded bonuses to its top executives, Chief Executive Marcie Frost and Chief Investment Officer Ted Eliopoulos. Frost gained an $80,190 bonus and Eliopoulos received a $314,305 award on the heels of CalPERS’ 11 percent return on investments in 2016-17.

CalSTRS’ strong performance in the 2016-17 budget year eclipsed the 1.4 percent net return it recorded in 2015-16.

In 2015-16, Ailman earned a $161,500 bonus and Ehnes gained a $214,500 award. Ailman’s bonus incentives center heavily on investment performance, while Ehnes’ factors in long-range planning.

Ailman’s bonus for 2016-17 is his largest since 2008, when he received $322,000 in performance pay. Ehnes earned a $205,000 bonus that year.

CalSTRS can’t spend too much time patting itself on the back for 2016-17.

It’s considered badly underfunded because it has enough assets to cover only 63.7 percent of what it owes to more than 900,000 teachers, retirees and dependents of its members. CalSTRS is on a slow course to dig out of its recession losses and reach full funding by the early 2040s, according to projections released by CalSTRS.

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TURNING BACK PROP. 57: The sheriffs and district attorneys who railed against Gov. Jerry Brown’s 2016 prison-reform initiative are unveiling their own measure to keep certain criminals locked up.

Sacramento County District Attorney Anne Marie Schubert is scheduled to be among the victim advocates and law enforcement leaders trumpeting the initiative today at a 10 a.m. press conference on the west steps of the Capitol.

The proposal would expand a list of crimes that would ban someone from gaining an early release from prison, adding offenses such as domestic violence and sex-trafficking of a child. That would restrict Brown’s Proposition 57, which voters passed last year to let more inmates leave prison through parole.

Schubert will be joined by Elk Grove Democratic Assemblyman Jim Cooper, Mark Klaas of the Klaas Kids Foundation, and Crime Victims United President Nina Salarno Besselman.

District attorneys and victim rights advocates on Friday Sept. 16, 2016 called on Gov. Jerry Brown to debate Proposition 57, his ballot measure that would make certain nonviolent felons eligible for early parole.

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GAS TAX ROAD SHOW: A group of Republican lawmakers and a couple oil industry representatives are heading to a Sinclair station today to protest the 12-cent gas tax that takes effect this week.

Rep. Doug LaMalfa, R-Richvale, will be joined by state Sen. Jim Nielsen, Assemblyman James Gallagher and Butte County Supervisor Bill Connelly in a gas tax protest at 2 p.m. at 2036 Forest Ave., Chico.

Increases to California's gas tax were approved in 2017 and will continue for years.

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WORTH REPEATING: “I know there’s a lot of slavish adherence to the Republican leadership. It’s bad for California. They are doing a disservice.” - Gov. Jerry Brown speaking Friday on 14 California Republican congressmen who supported a House tax plan.

Adam Ashton: 916-321-1063, @Adam_Ashton