It was business as usual for the trustees of the Employees’ Retirement System (ERS), who met for the first time yesterday after a probe by the Inspector General led to four senior staff resignations.
The board met in executive session to select city Finance Director Henry Raymond as chair of the quasi-public agency responsible for the retirement benefits of 18,000 current and retired employees.
Raymond replaces Jerome L. Sanders, a businessman who resigned shortly before Inspector General Isabel Mercedes Cumming released a report disclosing that “a member of the board” had recruited a close friend to a no-show job at the agency.
ERS vice chair Joan Pratt confirmed that Sanders had arranged for Eliot Powell to be named chief investment officer, a newly created post with a salary of $153,000 a year.
Pratt, who is also the City Comptroller, said the board was never informed that Sanders and Powell were 50-50 partners in LVI Power, a Delaware-incorporated energy sales company.
Powell, who lives in Estero, Fla., failed to show up for work on 157 workdays between December 2017 and August 2018, according to Cumming.
Despite his repeated absences, The Brew reported that he was paid more than $100,000 in salary (plus an undisclosed amount of travel expenses) before he was fired in late August.
New Office Digs
During this same period, the IG found that the agency’s longtime executive director, Roselyn H. Spencer, had improperly diverted $218,213 to refurbish ERS offices on East Redwood Street.
Yesterday, the trustees met in the conference room where Spencer had ordered two 48-inch wide-screen TVs without approval.
Spencer was allowed to quietly resign last month, along with ERS General Counsel Ian Berger. The matter was referred to State’s Attorney Marilyn Mosby, “who declined the case for prosecution,” according to the IG report.
The TV was not used during yesterday’s meeting.
Pratt and acting director David A. Randall said the agency expects to advertise the position of executive director in November.
In addition to the vacant positions of director and general counsel, the retirement system is without a deputy director, deputy general counsel and a director of communications.
Pratt said the board has yet to decide whether to hire another chief investment officer, whose job was to review the internal workings of fund managers, who are spread in cities around the country, and report back to the trustees.
None of the departed senior staff was mentioned by name at yesterday’s meeting, which instead concentrated on the system’s investment returns.
According to Nichole Roman-Bhatty of Marquette Associates, the retirement system ended the third quarter of 2018 with a balance of $1.81 billion. A quarterly rate of return of 7.7%, ahead of the target rate of 7%, reflected the then-booming stock market.
The board yesterday approved a recommendation by Helen Holton, the former City Councilwoman, to place a cap on hotel and travel expenses by ERS personnel attending domestic and international conferences.
“I will take responsibility for determination of the rates,” Raymond said, based on the city’s policy for government travel expenses.
The board also approved “organizational diversity of staff” as a criteria for selecting fund managers hired to invest retirement savings.
Finally, the board agreed to inform the City Council that, following a directive from the Trump administration, Sudan will no longer be considered a place where American investments are banned.
In addition to Pratt, Raymond and Holton, the ERS board includes a retired city nurse, a phlebotomist and a nonprofit housing official.