'Gold Mine' CA Pension Chief Quits | Chief Investment Officer

Tim Thonis, pension administrator of the Ventura County Retirement Board in California, resigned unexpectedly, and while speculators blame years of failed promises over pay raises, he cites governance as the reason.

(January 12, 2011) — In an unexpected move, pension administrator Tim Thonis resigned earlier this month.

Media reports have tied Thonis’ departure to a salary deadlock, but the pension administrator confirmed in a phone interview with aiCIO that previous reports have “got it all wrong.” “It’s not about salary,” Thonis told aiCIO. “My reason to leave was because of a governance issue,” he said, indicating that he has chosen not to comment further to the media.

Speculation persists that Thonis’ regulation is a direct result of years of deadlock over his salary base of about $170,000 a year. Retirement board member Robert Hansen told a local newspaper that the reason for the departure is simply a “timing issue.” “It’s unfortunate,” board Chairman Tracy Towner, a senior district attorney investigator, told the Ventura County Star. “Here’s a guy who’s a gold mine who we’ve lost.”

In a 6-3 vote, the Ventura County Retirement Board had declined to make changes that could have resulted in higher salaries for top officials at the more than $3 billion fund. Over the past two years, the Retirement Board has recommended raising Thonis’ salary, but action had been put off by County Executive Officer Marty Robinson and the Board of Supervisors. Thonis identified the attempt to raise his salary as one of fairness, as he was promised certain assurances about compensation when he was hired four years ago.

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Industry experts note that in comparison to other funds across the state and around the country, Ventura County’s fund is run inexpensively. The departure of Thonis, who ran a roughly $3 billion fund skillfully and singlehandedly, may mark the tension at public pension funds over pay, as schemes struggle to retain their best talent. Thonis, responsible for managing 20 employees and for tracking investments for the retirement fund, which serves the county’s 5,200 retired workers and more than 15,000 active employees, informed the board that his last day would be January 21, three days prior to the next board meeting.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

The survey by the Insurance Asset Outsourcing Exchange has suggested that insurance companies should provide a better description of investment needs up front in the RFP, among other recommendations, and created a list of best practices.

(January 12, 2011) — A recent survey of insurance asset managers has noted the top mistakes insurance companies make, providing recommendations on how to avoid them.

The most frequently cited suggestion for insurance companies: Provide a better description up front in the request for proposal (RFP).

David Homes, a partner at strategic consulting firm Eager, Davis & Holmes and Research Director for the Insurance Asset Outsourcing Exchange, has been tracking insurance companies and their relationships with investment managers since the early 1990s. “An important part of the RFP document is the description of the insurance company’s investment needs and expectations associated with the mandate being outsourced,” he noted in a statement. “Getting a good understanding at the beginning of the RFP process helps focus investment managers’ response toward specific needs and can improve the likelihood that an insurance company will identify the best investment manager for a specific situation. Unfortunately, this part of the RFP document is often underdeveloped.”

Survey respondents added that insurance firms could better communicate a clear timeline for the RFP process, and they identified a minimum of thirty days as reasonable.

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Additional findings showed insurance companies are increasing their use of investment consultants. “Because investment consultants typically use RFPs in the search process, they are contributing to the trend (of increased RFP use),” explains Holmes. “The manager selection process is evolving to meet insurance companies’ investment needs, which are more complex than just a few years ago.”

The survey was conducted by the Insurance Asset Outsourcing Exchange and is based upon the responses of 14 leading insurance asset managers.

A report last month by the same firm showed investment managers are also seeing an increase in the number of requests for proposals (RFPs) from insurance companies seeking third party services as the manager selection process evolves to meet increasingly complex investment needs. Holmes noted that he has seen that the insurance selection process has become more structured yet also more complex as investment needs have grown, adding that the increase in the activity of RFPs reflects the heightened proclivity among insurance firms to outsource management.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742