'Bureaucracy gone wild,' Della calls pension staff trips abroad

February 26, 2010|By Annie Linskey | annie.linskey@baltsun.com

A Baltimore state senator critcized the state's retirement agency Thursday for spending $173,000 on travel in the past year, calling it a "bureaucracy gone wild" because it sent staff members on 61 trips last year to such far-flung destinations as Hong Kong, Paris, Tokyo, Zurich, Athens, Frankfurt and Toronto.

"Here we are in this terrible situation with the state's budget," said Sen. George Della, a Democrat. "In my mind, it is indicative of the mind-set that some people just don't get it."

Della showed colleagues a copy of a report of trips taken by the State Retirement and Pension System staff members that reveals they spent 137 days on the road in fiscal 2009.

"This has been eating away at me," Della said. "You read something like this, and you are outraged." A hearing on the agency's travel is set for 9 a.m. today before the Senate's budget and tax panel.

Della's concern comes on the heels of a report by the Pew Center on the States ranking Maryland as having one of the nation's worst-funded pension systems.

Michael Golden, a spokesman for the retirement system, denied that the travel is lavish, saying it is critical for members of the 11-person investment office to check on funds in which the state has money.

The state's $30 billion pension system invests with 180 managers, he said.

"We would be irresponsible not to be sure those large investments are being looked over very carefully by our investments staff," Golden said.

The trips included 29 meetings with prospective money managers, 27 meetings with current managers and 24 conferences, according to legislative analysts.

Pension experts said the trips are not unusual, and serve a critical role.

"You can not just sit in your office. You need to confirm that the [money] manager is who and what they say they are," said Keith Brainard, the research director for the National Association of State Retirement Administrators. "The fact that somebody is making an overseas trip does not by itself suggest imprudent activity."

Golden said that each trip is approved by R. Dean Kenderline, the executive director of the state's system.

The six foreign trips, he said, were taken primarily so investment staff could attend advisory board meetings held by investment firms in which the pension holds a large stake.

Employees traveled to Hong Kong for six days in October 2008 to attend an advisory board meeting hosted by the private equity firm MGPA. Six months later MGPA held another board meeting in Zurich that state employees also attended.

The retirement system invests $100 million with MGPA, Golden said. Staff then traveled to Athens and Frankfurt to meet potential new managers.

Other trips included a six-day stay in Tokyo and a four-day stint in Paris. Both trips, Golden said, were for meetings with companies in which the state has hundreds of millions of dollars invested.

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