The executive director of the Baltimore Employees? Retirement Systems, Roselyn Spencer, in these pages yesterday responded to Examiner reports showing that board trustees received travel discounts and gifts.
She says that the use of education money ? much for overseas travel at heavily discounted rates ? is OK, writing that these trips are in line with all city ethics codes and that it is important for helping trustees make good money management decisions.
Who would deny that education is important? But couldn?t that money be put to better use by attending investment conferences closer to home or classes at one of our local universities?
ERS annual reports show that education expenses have increased since the board quit requiring approval for individual travel in fiscal 2003.
ERS education spending per board member:
» 2001-02: $4,476
» 2002-03: $3,712
» 2003-04: $7,016
» 2004-05: $8,332
A comparison of educational costs per board member at ERS and the Fire and Police Employee?s Retirement System ? which has achieved better returns since 2003 and somehow does so without foreign travel ? makes the point.
Fire and Police Fund spending per board member:
» 2001-02: $2,884
» 2002-03: $2,002
» 2003-04: $2,026
» 2004-05: $2,425
Board members of the Fire and Police Fund did not need to go to Paris or Monte Carlo to figure out that their fund managers were doing a poor job. Since 2003, when the two boards changed chief investment advisers, the Fire and Police Fund achieved returns 1.3 percent above its benchmark in 2003-04 and 1.9 percent above its benchmark in 2004-05.
Meanwhile, ERS returns lagged its benchmark by 1 percent in 2003-04 and 0.7 percent in 2004-05. Had ERS met its benchmarks in 2003-05, the city employee retirement fund would be $33 million richer than it was on June 30, 2005.
We also disagree with Spencer, who in January took an educational expedition to India, that it?s OK for companies seeking to do business with the City of Baltimore or those that already have it to subsidize overseas trips for trustees. Ethics rules state thatcity employees may not accept direct or indirect gifts from businesses that either want to do business with the city or are doing business with the city. So does common sense.
We are not alone.
City Council Member Ken Harris, D-District 4, called for an official investigation of ERS board members? overseas travel Wednesday .
