Is teacher fund taking lessons from Wall Street on bonuses?

AJC reporter James Salzer created quite a stir with his AJC story on the 35 percent raises to top staffers in the Teacher Retirement System. (See down below for a priceless piece of outrage from a Georgia college professor.)

Salzer reports:

The two investment chiefs at the retirement system took home $609,000 each, almost double what they were paid before the recession hit in 2007. According to state records, the two, Nancie H. Boedy and Charles W. Cary, made slightly more in fiscal 2010 than University of Georgia President Michael Adams, who was listed as earning $601,494. They made more than four times what then-Gov. Sonny Perdue was paid.

Teacher Retirement System officials said the big pay — a combination of salaries and “incentive pay” or bonuses — are needed to keep highly qualified money managers running teacher and state employee retirement programs that are now worth a combined $66 billion.

“For the same type of responsibility they have here, in the private sector they would earn at least double,” said Jeffrey Ezell, executive director of the Teacher Retirement System. “There is that possibility that any of the staff would leave.” Still, some of his top staffers are longtime employees likely to retire with the state, where they could get lifetime pensions in the $200,000 to $300,000 a year range. Of the $609,400 Cary and Boedy were paid in 2010, each got about $236,000 from “incentive pay” or bonuses.

Here is the e-mail from an outraged state college professor that I wanted to share with his permission:

In my opinion, this is an absolute outrage.  The very idea that teachers have been suffering and struggling to get by on the reduced pittance this state pays them while Sonny’s appointees get raises and massive bonuses (here and elsewhere) is really well beyond what any reasonable person should entertain.

Call on Deal to rescind these bonuses and distribute the money to teachers immediately—not for this year—but for last year:  payment for work already done.

Ms Downey, as far as education is concerned, the State of Georgia has been trying for over a century to get something for nothing.  What we get, and what we have always gotten, is exactly what we pay for.  We pay very little.  You would think that vainly following that same course of action again and again, always hoping for or expecting a different result would eventually sink in and we would try another approach.  We don’t do that.  While this is the very definition of stupidity, it is also why our state always figures near the bottom of a class of fifty.  We struggle to compete with the dregs, our peer states: Mississippi, Alabama and Louisiana.

In addition to horrible pay, diminished benefits and retirement expectations, and owing to the effective efforts of both Democratic and Republican administrations, all k-12 teachers are denied the possibility of tenure.  It no longer exists.  Politicians, looking for someone or something to blame for their own stupidity, chose to believe that doing away with tenure would straighten things out.  Has that happened?  It has not: move over Mississippi—make a little more room on the dummy bench.

Now, all new teachers (and all others hired after tenure was dismantled) are subject to the whims of their principals (and whacky school boards!).  Let me tell you, Ms Downey, that after having had interviews with several middle and high school principals over the years, I must report that I have never seen (or heard) such a menagerie of louts and imbeciles in my life.  Although a Georgia native, my son’s middle-school principal could not manage to speak the English language so that anyone outside of Alabama could possibly comprehend what he said.

Sitting in the room with him, and counting on my fingers, I reckon he averaged about five glaring grammar errors (of every kind imaginable) for every fifteen seconds he spoke—or one every five seconds.  While that’s quite an achievement in itself, he is also the man who determines who will teach English, a language he has failed to learn.  In addition, he is suspicious (and immediately becomes defensive) when he encounters those who do speak and write properly.  It’s quite a dilemma.

Yet anyone is his position might fire a teacher for any stated or unstated reason—for political or religious affiliation; race may be an issue; in fact, an administrator needs no legitimate reason at all to fire an untenured teacher (even one with many years experience).  Perhaps an equally illiterate cousin is looking for a job—who can say?  But because cousin Earl can’t speak English either, we should not expect his classes to do very well on any sort of standardized exam…..I just had a comical vision of Earl and uncle sitting up late into the night trying to correct/alter standardized exams.   Typing monkeys could do a better job.

So, Ms Downey, what do you think the chances are that a superb and energetic young teacher graduating from Wisconsin, or from Iowa, or from Minnesota (let’s just say anywhere other than Mississippi, Alabama or Louisiana) will show up here and put up with Earl and his uncle?  The chances are very slight.  I challenge you or any other journalist to come to terms with just how badly we are really doing as a state with regard to education.

We are now almost certainly wholly dependent on teachers educated in Georgia seeking to remain here for various reasons—none, or very few of them professional reasons.  There’s simply no motivation for anyone to come here, so they are not coming here.  We need them to come here and to stay here.

Now we discover an additional insult to many injuries, that, what by all accounts is a fair to poorly run retirement system, has taken a lesson from Goldman Sachs and Merrill Lynch.  All of this was facilitated by a governor who could not find the coin to pay the state’s teachers their miserable salaries in the first place.  It’s simply stunning.

–From Maureen Downey, for the AJC Get Schooled blog

66 comments Add your comment


January 31st, 2011
9:01 am

You certainly get the level of services for which you pay. Maybe we should turn over billions of fund dollars to a former PE teacher — no, wait, he was made superintendent of DeKalb schools. How about a business ed teacher — nope, she is the current superintendent in DeKalb.

We are not talking about significant bonuses for people who can do what these people do. Keep your hands and eyes out of other people’s pocketbooks.

Mom of 3

January 31st, 2011
9:20 am

Not that I completely disagree with state professor…BUT it sounds like he has some sour grapes from his experience with his son’s principal. Not all principals are like that and trying to make the suggestion that they are is not helping to solve Georgia’s education problem. I totally agree with him about these raises, but he lost me once he started the name calling.

William Casey

January 31st, 2011
9:24 am

Very few “leaders” recognize the symbolic importance of their actions. When there is a leader with a “I’m getting mine” attitude, you can be sure that that attitude “trickles down” to the troops.


January 31st, 2011
9:31 am

I’m afraid that the professor is simply wrong on the tenure issue. Tenure does indeed still exist for GA teachers. It was restored by the legislature about seven years ago, early on during Perdue’s first term. GA teachers do still acquire tenure (i.e., the continued expectation of employment, the right to a Fair Dismissal hearing before being non-renewed, etc.) after accepting their third consecutive full-time, full-year contract from the same GA BOE. As a result, tenured teachers enjoy more employment protection than most any other type of employee in the state.


January 31st, 2011
9:32 am

This has been reported on for the last couple of years by the AJC. Not sure why it is causing such a stir this year. It is insane that both the TRS and the Lottery folk (a quasi-state functionary, as it operates under an EXCLUSIVE state-granted charter) feel that they cannot get “quality” employees without granting exorbitant pay and bonuses. And the Legislature is entirely to blame for not putting a stop to this nonsense. If the GA Lottery Corp cannot find workers, give the exclusive charter to another corporation, with the understanding that they will remit the FULL percentage to the state, unlike what the Ga Lottery Corp has done each year) The same for TRS. I am sure there are MANY fund managers who would work for much less, and be glad to! I blame this entirely on the lack of oversight by our elected officials!


January 31st, 2011
9:34 am

CORRECTION: Teachers acquire tenure after accepting their FOURTH consecutive contract i.e. at the end of their third year of teaching if their contract is renewed for the fourth year. It’s now the same as it was before tenure went away for a few years during Barnes.


January 31st, 2011
9:36 am

Or maybe it isn’t oversight!

Senior Citizen Kane

January 31st, 2011
9:47 am

So, according to T.R., the “professor” is basing his entire argument on a false premise?


January 31st, 2011
10:03 am

I am still in shock over a detail from Salzer’s original story that you did not reproduce here: that the retirement system administrators got “exta” bonus money in 2010 that was not paid in 2009 BECAUSE THE SYSTEM LOST MONEY IN 2009. What kind of sense does this make? Once incentive payments are lost in the private sector, are they not, well, LOST? Surely only in the safe havens of public employment are “lost” incentive payments “found” the following year when pension fund employees “earn back” the money by managing to make a profit for the retirement system by riding the stock market back up just like everyone else. For this “skill” they are paid this kind of money? My bet is that even Earl could to this job.

I’m with the professor: Take back the money and give it to the people who actually do the work–the state’s teachers!

What Goes Around Comes Around

January 31st, 2011
10:04 am

As a retiree, they need to be taught one of the Seven Deadly Sins.

GREED – Greed is the desire for material wealth or gain, ignoring the realm of the spiritual.

What goes around comes around.


January 31st, 2011
10:07 am

It doesn’t matter if you work in the public or private sector; Greed is the number one culprit in every organization and those at the top get paid to screw the rest of us.

It’s just tradition.


January 31st, 2011
10:09 am

I honestly don’t have a problem with incentives for making the pension fund GROW. That’s where my retirement is going to come from and I want it to be around long enough for me to retire, if God allows me to live that long. At least in this instance, there is something that can be measured to determine whether or not the performance meets the criteria for the bonuses.

As a teacher, I would not have a problem with performance BONUSES, IF and it’s a big IF, they were based on something that could be measured. Scores on one standardized test that doesn’t matter to students because they have no incentive to pass it don’t rise to that occasion.


January 31st, 2011
10:13 am

BUT, we all know that this state has no intention of RAISING teacher pay through this pay-for-performance scam. It’s easy to give the bonuses to TRS employees because they can’t spend that money for themselves, but the teacher pay issue is very different. Perdue started this scam as a way to REDUCE teacher pay that has FINALLY risen to a level appraching the value of what we do. If they cut OUR PAY, it gives them more money to spread around to bolster their chances at election time.

Dr. John Trotter

January 31st, 2011
10:52 am

TRS is just pimping the teachers’ retirement funds. It’s not a matter of “We can’t get good people unless we pay these enormous salaries and bonuses”; it’s just a matter of pimping. There sure is a lot of pimping going on in the name of public education.

[...] This post was mentioned on Twitter by BC Kumar, Wealth 2.0 and Marjorie Kastner, Maureen Downey. Maureen Downey said: Is teacher fund taking lessons from Wall Street on bonuses? [...]

Dr. John Trotter

January 31st, 2011
10:53 am

Maureen: I take it as a compliment that you feel that you need to moderate my comments. Ha! I presume that this means that my comments are not borrrrrrrrrrrrrrrrrrrrrrrrrrrrrring like some.

What's best for kids?

January 31st, 2011
11:05 am

The irony of it is that teachers are paying an extra 1% into TRS because of the fear of losing money. Seriously?

David Sims

January 31st, 2011
11:12 am

The argument that money-managers “need” the incentive of incomes more than ten times that of ordinary people is bogus. Their jobs aren’t all that difficult. Or, rather, most workers, other than financial manipulators, aren’t being fairly rewarded for the difficulties of their jobs. Teachers are an example. Nurses are another. When a nurse doesn’t earn enough money to lie, when sick or injured, in the very hospital beds she’s spent much of her life near while tending to other people who were sick or injured, it means that the reward that should have gone to her was taken by someone else, a hospital administrator, a government bureaucrat, a banker, or a welfare freeloader. Most of a money-manager’s pay is a kind of recognition that he has a position in a money-flow bottleneck; it isn’t a recognition of his skills, and it isn’t a recognition of his job’s difficulties, either.

Among the ideas our capitalist system creates is that someone has “earned” money if he can get it without getting caught breaking laws. Another is that our financial system is “honest” because it is legal. Both ideas are nonsense because the law itself can be dishonest, and usually is. There’s no special sanctity of “a nation of laws and not of men” when variously lawful treatments of different men depends on which men get to write the laws.

The hallmark of financial honesty is the avoidance of unnecessary complications in the flow of money and the absence conflicts of interest having to do with the creation of money. An honest money system isn’t based on usury, and its workings are as simple as they can be. Unnecessary complications of finance are signs that dishonest people have been at work, trying to blow smoke and erect mirrors and confuse others by a multiplication of words so that nobody (not even the lawyers made necessary thereby) can possibly to understand perfectly how to avoid the traps. Where you find obscure, arcane, hairsplitting language, or a contrived multitude of alternative channels through which money might flow in order to accomplish essentially the same purpose, there you have evidence cheaters and their scams.

In the system

January 31st, 2011
11:16 am

I’m afraid the professor is suffering under a number of misapprehensions. First of all, Federal law prohibits employee dismissal for a number of things he mentions, including race and religion, as any employer will tell you. These laws have teeth and do offer strong employee protections. Secondly, the subject of tenure really doesn’t have anything to do with whether the stewards of our pension program deserve the money they were paid.

I don’t know if he is aware, but Georgia has one of the top pension plans in the country and has for the 20-something years I’ve been in it. This is something I watch carefully since this pension will be the backbone of my retirement income.

Obviously, as a member, I want the best possible people managing this program and the track record speaks for itself. I think most of us don’t object to rewards for performance. It’s the people who make enormous sums of money while running their business or organization into the ground that upsets us. What would happen if you reduced the salaries of people who are obviously talented in managing this fund. Are you absolutely sure you could replace them with equally talented people who could achieve the same results? Are you willing to take this gamble?

It’s understandable that large salaries are upsetting to people who are suffering from the effects of the economy, but believe me, this is not the place you want to skimp. As the professor so accurately points out, you get what you pay for.


January 31st, 2011
11:16 am

TR is correct about teacher tenure – it has been reinstated. Administrator tenure however has not. One reason we have so many spineless, job scared principals out there now.


January 31st, 2011
11:18 am

i begrudge um i think they should be hanged the greedy lil bass terds


January 31st, 2011
11:22 am

Also note that the other TRS employees who work with and for the retirees, support the working systems haven’t received any incentive pay, bonues or cost of living increases in over 6 years…

Old Time Educator

January 31st, 2011
11:41 am

A bit off-topic:::: how does RIF (reduction in force) work with tenured and non-tenured teachers? Under RIF, doesn’t tenure fly out the door?


January 31st, 2011
11:44 am

@ T.R. the problem with waiting for Year 4 for tenure is that many good, qualified teachers usually don’t make it or they are harrassed so much they leave. Hence, all the turnover and people leaving the profession/state altogether.


January 31st, 2011
11:45 am



January 31st, 2011
11:49 am

Why do the few at the top get so much more than the rest of us combined…….because they can!! There’s no other reason. None.

They can explain or try to justify it anyway they want to, but the bottom line is our system rewards a precious few at the expense of the rest of us.

The idea that we can’t find quality money managers without big salaries and bonuses are purely bukpus.


January 31st, 2011
11:52 am

For four years, TRS told their non-investment staff they had to wait for the governor to approve a cost of living adjustment, but it seems that the Investment Staff get increases every year. The lack of diversity among the TRS investment staff is unbelievable. TRS is ridiculous!

David Sims

January 31st, 2011
11:58 am

Oh well. Two missing required prepositions. An extraneous participle. A number error. Where’s that edit button?


…there you have evidence cheaters and their scams.
…there you have evidence of cheaters and their scams.

…so that nobody … can possibly to understand perfectly how to avoid…
…so that nobody … can possibly understand perfectly how to avoid…

…variously lawful treatments of different men depends on which men get to write the laws.
…variously lawful treatments of different men depend on which men get to write the laws.

…and the absence conflicts of interest having to do with the creation of money.
…and the absence of conflicts of interest having to do with the creation of money.


January 31st, 2011
12:03 pm

You know what…………..if the TRS money managers are worth twice as much in the private sector, why haven’t they left yet?

If they’re worth 1.2 million dollars a year at another pension fund or money management firm, why haven’t they taken it?

If I was worth twice as much in the private sector, you would see skid marks and some smoke as I left the building.

David Sims

January 31st, 2011
12:13 pm

@In the system. It is disingenuous to overpay administrators and managers to ensure that they are competent and that they eschew corruption. The money required to do that can spiral upward far beyond what an economy can sustain. Rather, you should secure good work from these people in the same way that you do with most anyone else. Put the carrot away. Pick up the stick. If you find an incompetent money-manager, fire him and stick him with the obligation to repay what his mistakes have cost others. Take from him his money, his car, his house, his land, and strip him of his titles. If a money-manager is found to have engaged in corruption, then in addition to the aforesaid penalties, put him into prison and let him serve as many years as any criminal off the street would serve for stealing the same amount of money, or for causing the same amount of mischief. If, someday, it becomes the law again that a thief should suffer the loss of a hand, then make sure that corrupt money-managers are first in line to get the chop.

Such penalties don’t prevent the “little guy” away from working. They don’t scare farmers so that they do no farming. So it is reasonable to suppose that they won’t scare honest people away from becoming honest money-managers, either.

Inman Park Boy

January 31st, 2011
12:20 pm

You have to pay quality salaries for quality work. Just look at what we pay teachers!


January 31st, 2011
12:41 pm

What irritates me is when I read complaints from non-teachers on this blog that teachers are being paid too much (especially teachers that make $60,000 or more).

The salaries combined of these two TRS managers could pay for 200 (+/-) teachers.


one second

January 31st, 2011
12:52 pm

really, I mean how hard is it to make money using other peoples money. we are talking about billions here. when we are talking about that much money almost any reasonable person can invest it and get 10% returns. heck, it could take a portion and create a credit union for state employees to give car, home, and other loans and get a return of 5-11%. remember just a 5%return off of one billion is 50,000,000.

its just so funny when they say they have to pay these insane bonuses to people;


January 31st, 2011
12:54 pm

As a contributor to TRS and a one-day-to-be recipient of retirement checks, I for one am delighted that we are paying the fund managers well and that our fund is one of the best in the nation. It irritates me greatly that my fellow educators refuse to recognize the importance of keeping these high performing people on the staff. Yes, to me the salaries and bonuses are higher than mine, but I do not do that kind of work.

Please, keep my retirement fund in good health and pay the people who manage that fund well.


January 31st, 2011
12:57 pm


For the same type of responsibility they have here, in the private sector they would earn at least double,” said Jeffrey Ezell, executive director of the Teacher Retirement System

…is all that need be said on the subject.

move along, nothing to see here …next.


January 31st, 2011
12:57 pm

Teachers in Georgia DO NOT have tenure. They have what is called “fair dismissal”. This is a process that entitles the teacher to a hearing before the board if wrongful termination might be a problem. I do not believe it is unfair for teachers to have this protection. Also, I have never had any dificulty firing someone who needed firing.


January 31st, 2011
1:02 pm

One more thing -

What all you educators need to watch out for is not the paying of bonuses to TRS money managers. What we must be on our toes about is a take-over of TRS by the governors office through legislative action.

TRS is run by a board that still functions relatively independent of the governor’s office. This was shown a couple of years ago when Mr. Purdue tried to push through some rules changes. At that time, the board rebuffed his efforts.

It would be very easy to take the emotions generated by articles like this and get people riled up for change. Be very careful!


January 31st, 2011
1:13 pm

To get the kind of financial returns they have during a down economy is amazing. Not just anyone can do this. As Tony pointed out, their efforts justify what they make.

This compensation envy gets old. It would be interesting to hear what some think the fund managers should be paid given the amount of money they invest and number of people that are impacted by their efforts.

Dr. Craig Spinks/ Augusta

January 31st, 2011
1:20 pm

“Greed is good.”

“More is better.”

Prudence is best. Huh?

Hey, wait a minute!

Prudence is old-fashioned.


January 31st, 2011
1:25 pm

Want to see something interesting? Check out who is the chairman of the TRS board. Interesting…


January 31st, 2011
1:44 pm

“To get the kind of financial returns they have during a down economy is amazing. Not just anyone can do this. As Tony pointed out, their efforts justify what they make.”

You do realize their 2010 returns didn’t even outpace the S&P, right?

Dr. Craig Spinks/ Augusta

January 31st, 2011
2:01 pm

Is a long-term “running average” of the annual gains/losses of the TRS portfolio used in computing executive bonuses?

HS Public Teacher

January 31st, 2011
2:06 pm

Not a penny of this money comes from tax payers. Why should anyone care except for the teachers that contribute to this fund?

As a teacher with money in this fund, I am very satisfied with the returns. As long as I do well, I don’t give a rats behind what bonuses they get!

one second

January 31st, 2011
2:24 pm

got to love other peoples money

do the math

January 31st, 2011
2:43 pm

“What irritates me is when I read complaints from non-teachers on this blog that teachers are being paid too much (especially teachers that make $60,000 or more).

The salaries combined of these two TRS managers could pay for 200 (+/-) teachers.”

I think you need to recheck that math. The average teacher may not make a lot, but it is a bit better than $3045 per year.


January 31st, 2011
2:51 pm

J.M., I’m sure you realize that the fund managers ‘probably’ invested more conservatively this past year, given the economic conditions both here and around the world.

And to FormerChipmunk, who cares if Alvin Wilbanks is the chair of the TRS Board? And the end of the day, most teachers will only care that their investments have not lost money and that funds will be available when they retire.

I will say, the next term will be interesting as I believe employee contributions will be slightly lower due to the unpaid furlough days along with little to no salary increases.


January 31st, 2011
2:54 pm

One of the reasons the TRS looks so good on paper is that is it not fully funded by TRS participants-to-be. In the University System, everyone EXCEPT administrators hired in the last 10 to 12 years has had no option except the ORP (Optional Retirement System) program. It works like a 401K, except that, for the privilege of having this portable option (so that if you leave a University System school before 30 years of service), the universities dun the ORP participants 2%. This 2% goes into TRS to “compensate” for ORP participants “opting out” of the defined benefits program. Except there is no “opting out” since there is no choice. The contribution the universities make to the ORP system has been 2% to 2.5% LESS for ORP, which ran about 4% to TRS contributions’ 6% for many years. In 2008, at the beginning of the recession, the University System decide that ORP returns were so high that they could take an additional 0.5% more from ORP and put it in TRS.

Bottom line, about 1.5% to 2.5% of money that should be going to ORP faculty and staff retirement goes to fund TRS faculty and staff retirement. ORP faculty and staff have the same job description, the same hours, the same everything, EXCEPT they have to pay for older faculty and staff and administrators who are in the TRS system.

Don’t break your arm patting the TRS managers on the back…

bootney farnsworth

January 31st, 2011
4:45 pm

I wouldn’t mind the bonuses IF we were seeing a similiar return on our investments.

bootney farnsworth

January 31st, 2011
4:46 pm

and yes, once again, outraged faculty forget they are the minority of employees in higher education.


January 31st, 2011
5:07 pm

I agree with Tony!