Shades of the banks at the height of the financial crisis: An underperforming state pension fund awards its employees with more than $800,000 in bonuses.
But that's the rule with the $48.8 billion Pension Reserves Investment Management system of Massachussets, where the Boston Globe discovered that the past few years' worth of better returns for the fund have triggered a slightly hard-to-justify $810,000 bonus for the fund's 25-person staff.
The fund lost approximately $300 million last year.
That's in addition to more than a quarter-million dollars in extra pay made last fall, when the fund also showed a slight loss.
The Globe found that the fund's executive director, Michael Trotsky, will get almost $100,000 alone, boosting his salary to $343,000.
It sounds like a great place to work. Employees at the fund qualify for bonuses representing 30 to 40 percent of their annual salary if they hit their performance targets over a three-year period.
Trotsky - yes, that's his real name - defended the bonuses to a Globe reporter, saying that, essentially, two out of three ain't bad. Or, maybe, one out of three, given the last two years' flat results.
"We are paid on a three-year basis, and our three years are strong ... it shows we generated $2.6 billion in excess returns," he told the newspaper.
Trotsky says that last year's results were actually quite positive, given the amount of damage done recently to the fund's international markets and emerging equity investments.
Still, even the lawyer associated with the pension fund racked up a $66,000 bonus as part of the deal.
The Massachusetts system is not the only one in the country to include a bonus system as part of its pay - said to be an incentive to keep the staff for bolting to the private sector - but most other major systems do not operate in that fashion.
Particularly livid is the pension board's own chairman, Steve Grossman, who told the Globe he doesn't agree with bonuses during a period of losses.
"I think the citizens of Massachusetts would think it inappropriate, and it lacks common sense for any company for public organization to pay bonuses when it lost money," he said.
And you wonder why the defined benefit world gets the bad rap it does.