State Loses Top Pension Fund Manager

State Loses Top Pension Fund Manager
Stan Mavromates

JUNE 11, 2012: The resignation of Stan Mavromates, the longtime chief investment officer of the Commonwealth’s $50 billion pension fund, has caused some concern among the retirement systems of the Commonwealth holding membership in the fund.

Although the bulk of the Fund is the State and Teachers’ Pension fund, the majority of our 103 city, town and county boards have placed their pension funds within PRIT and depend on PRIT’s investment earnings to increase the growth and value of their own funds.

Ron D’Onofrio, an Everett retiree, is chairman of the $57 million Everett Retirement Board. The Everett Retirement System, with its entire pension fund invested by PRIT is known as a participating system. Boards that allocate a portion of their fund to PRIT are known as purchasing systems.

“I do have some concern over PRIT losing Stan Mavromates,” said D’Onofrio. “The investment chief is the key officer at PRIT and Stan is tops in his field. The search committee will have a tough time replacing him.”

In Plymouth, a purchasing system, Retirement Board Chairman Tom Kelly says his board invested in certain asset classes to take advantage of PRIM’s expertise and top-level managers.

“However, we (Board) have put PRIM on our ‘watch list’ because of its loss of three senior managers and its inability to attract experienced replacements,” Kelly pointed out.

“Salaries have been an ongoing problem at the Pension Reserves Investment Management (PRIM) Board which oversees the PRIT Fund and is impossible to resolve,” says Association President Ralph White a former 24-year member of the PRIM Board. “Stan was making about $240k and worth twice that amount. He’ll easily double that in his new job, but how can we explain increasing the salary to other state employees.”

“I know that they’re state employees at PRIM,” said Paul Shanley, an elected member of the PRIM Board and a vice-president of our Association. “But we’ve lost three senior investment personnel over the past year. We have a responsibility to our retirement systems, our employees and retirees to invest and earn top dollars on their behalf.”

Shanley said that the bonus arrangement that a compensation study committee suggested was put into effect several year ago hoping to retain key investment managers. “We still have a compensation package based on the fund’s performance, but it’s been cut by more than 60 percent. Again, it just doesn’t play well with rank and file state workers.”

Stan Mavromates has amassed a track record of some of the best public funds in his dozen years at the PRIM Board.

“Stan has been a major defining characteristic for PRIM over the course of the past 12 years,” said PRIM’s executive director Michael Trotsky. “He has hired, trained , supervised and mentored many of PRIM’s best performers and most valued colleagues, and has himself been extraordinarily dedicated and skillful.”

Mavromates, an ex-Marine and Quincy resident, will join Mercer Investment as chief investment officer for the Americas, working in Boston for the New York based firm. Mercer has $58 billion in global assets under management.