(June 4, 2014) – The Employees Retirement System of Texas (ERS) overpaid some of its staff during 2013 due to errors in its bonus programme, the state’s auditor has found.
In a report published last month Texas State Auditor John Keel wrote that the $25 billion pension paid $22,563 more to 10 staff than it should have in the last fiscal year, due to calculation errors.
ERS awarded a total of $3,077,301 in incentives to its 61 employees after the fund outperformed its benchmark in the one, three and five year periods to the end of its fiscal year in August 2013. This included a $157,953 bonus payment to CIO Tom Tull and $134,063 to executive director Ann Bishop.
But Keel said ERS’ bonus payments did not always align with its “incentive compensation plan”. ERS also “did not always maintain documentation to support the calculation of incentive compensation for some personnel”, Keel said.
In addition, ERS—along with Texas’ Permanent School Fund and General Land Office—was told to strengthen other elements of its processes as the board had failed to formally agree its bonus structure before the start of the 2012-13 fiscal year. The other Texas funds in the report made all bonus payments in accordance with their policies, Keel said.
ERS’ managers accepted Keel’s report, saying it was “currently evaluating factors that led to errors to ensure proper implementation of corrective action”.
A spokeswoman for ERS told Bloomberg that officials from Keel’s office had been invited to present the report formally to the scheme’s audit committee on August 19.
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