Colorado's Public Employees' Retirement Association (PERA) is facing renewed scrutiny after awarding $11.7 million in bonuses to its investment team in 2022, a year the pension fund lost $9.8 billion. The bonuses come as retirees—including teachers, bus drivers, and other state workers—have seen their pension purchasing power drop 21% since 2010, with benefit cuts and higher contributions implemented to address a $29 billion funding gap.
Bonus Structure Under Fire
According to a report from the Colorado Sun, PERA's bonus pool has grown significantly, from $4.6 million in 2018 to $11.7 million in 2022, with plans to increase it to $13.1 million this year. The average bonus for investment staff in 2022 was $299,000, or 124% of base salary, with nine employees receiving over $400,000 each. Two staff members saw their compensation triple due to incentive payouts.
Critics argue that rewarding staff after a year of steep losses is out of step with the sacrifices required of retirees and taxpayers. Hilary Glasgow, head of Colorado WINS, called the payouts “insane,” while PERA trustee Eunice Botchway questioned what message this sends to teachers and janitors struggling without additional compensation.
Performance Metrics in Question
PERA's bonus system is tied to performance against benchmarks, even when the overall fund posts a loss. In 2022, PERA's overall return was down 13.4%, but that still beat its benchmark loss of 13.7%. Global equities fell 20.6%, trailing their benchmark, yet equities staff still received $4.9 million in incentives due to longer-term benchmarks. This has led to debate over how performance should be judged.
PERA executives defend the pay structure as necessary to retain skilled talent. Executive Director Andrew Roth noted that outsourcing investments would cost the system about $80 million more annually, calling current pay levels “a financial safeguard” for retirees. In 2024, PERA's in-house staff managed 61% of the fund, saving $70 million compared to external managers.
Comparisons with Peers
Other public pension systems have imposed stricter limits on incentive pay. Arizona caps bonuses at 30% of salary, Washington State skips annual incentives, and CalPERS, the largest U.S. public pension, excludes incentive pay from staff retirement benefits. PERA's chief investment officer, Amy McGarrity, earned $1.2 million last year, including a $660,000 bonus—well above the $638,000 median for large public pension CIOs in a 2025 survey.
Hank Kim, executive director of the National Conference on Public Employee Retirement Systems, noted that compensation for public pension staff has been rising as fund complexity increases. However, the risk remains that political pressure could drive up costs elsewhere, particularly if key staff depart and the fund must hire expensive external managers.
Nationwide Building Society Parallel
Meanwhile, the UK's Nationwide Building Society faces its own pay controversy. CEO Debbie Crosbie's compensation rose to £4.7 million for the year to March 2026, up from £2.5 million, following the £2.9 billion Virgin Money acquisition. Members will have an advisory vote on the pay at the July 15 AGM. Andrew Speke of the High Pay Centre criticized the deal as out of step with the fairness expected from building societies.
PERA's final 2025 investment numbers are due later this month, while Nationwide heads into its AGM. Both organizations face questions from those who fund them—workers, retirees, and members—about whether the pay structures are justified. The legality of the bonuses is not in question, but the broader debate over fairness and fiscal responsibility continues.
