A Little Pension Fund Love
Morning Monkeys,
I've come to notice very little love for pension fund jobs here on WSO. Do they pay as much as PE or IBD? Nope. But there some real highlights to jobs at pension funds, especially public employee pension funds, namely that they tend to be 9-5 jobs, and many really love CFA charterholders (see, they're good for more than just ER and AM!). Also, I hear that many offer these peculiar, seldom heard of benefits called "pensions" where, after a period of time working, they pay you to not work. Crazy!
How good/bad is the pay specifically you might wonder. Since it can be tricky to find NYC pension fund salaries, I'll give you some insight into what employees at VRS (Virginia Retirement System) here in Richmond make (since all Virginia state employee salaries are online and easily searchable). You can adjust for cost living as necessary for your location.
Some quick background, VRS is the Virginia State Employee's pension fund and as of June 30, 2012 the fair value of the fund's total investments was $53.5 billion. They invest in many different asset classes including private equity and hedge funds, with private equity making up 11% of their total fair value (roughly $5.9 billion).
Their investments division - the area that would interest those on this site - appears to be divided into 5 positions below the CIO, which from bottom to top are, Investment Analysts, Investment Officers, Senior Investment Officers, Portfolio Managers, and Program Directors. Sadly, the data I have is from 2011, but this should be a pretty good representation of pay:
Investment Analyst - This looks to be the entry level position for VRS and from the salary database, it looks like the starting salary is $71,400 base. I don't know what the bonus structure looks like for this position, but as you'll see in the remaining positions, one certainly exists.
Investment Officer - What appears to be the next level up, the salaries for investment officers range from $108,200 (which includes a $20,000 bonus) up to $125,250 (which includes a $15,000 bonus).
Senior Investment Officer - Salary range for senior investment officers appears to be $126,000 (no bonus) to $171,500 (which includes a $35,000 bonus). It should be noted, the largest bonus (which they're calling an "incentive payment") that I saw was $40,000 for this position.
Portfolio Manager - Salary range for the portfolio managers appears to be $184,600 (which includes a $25,000 bonus) to $300,000 (which includes a $100,000 bonus).
Program Director - Salary range for program directors, who sit just below the CIO appears to be $360,777 (which includes a $120,000 bonus) to $420,519 (which includes a $180,000 bonus).
CIO - Granted, there's only the one, but he made $733,500 which includes a $340,800 bonus.
Source: http://datacenter.timesdispatch.com/databases/sala...
Take off of this with a grain of salt since I'm getting this data from a salary survey and not an official pay scale. But, all in all it seems like pension funds (well, VRS at least) are a pretty good gig, especially for future CFA charterholders. Any pension fund guys on WSO? What did you think? Have any of the younger guys considered working at a pension fund? If not, why not?
Comments
I work for one and I'm a bit
I work for one and I'm a bit on the younger side, sorta. It's a good gig. That pay seems in line with my experience (with a slightly larger fund). And yes, they most certainly love the Charter because it provides a sense of reassurance. Nobody wants a large pension fund to disappear overnight, so it's important that it be run by ethical people.
I would have thought working
I would have thought working for a large pension fund would be similar to a large endowment or family office. As you point out, work/life balance should be pretty good relative to the crazy hours you might see in IB or PE. The CFA charter is for sure the way to go if you are considering a move to asset management.
If anyone who works for a
If anyone who works for a pension fund or is an LP reading this and is interested in free alt. asset data (performance metrics, GP profiles and track records, and a list of all funds currently being raised for PE, Infra, and private real estate) PM me and I will set you up with an account
"I'm a historian, and that freaks me out."- Mike Tyson
I have some exposure to this
I have some exposure to this field and, although I'm in consulting now, have been thinking about going down this road post-bschool (or a family office, FoF, investment consulting firm, etc.) They look like good gigs--a decent work/life balance along with the chance to take a big picture, macro look at a really large portfolio.
Go work for CalPERS, then
Go work for CalPERS, then come back and tell me how much you love dealing with the State of California, their bureaucrats, and their politicians. From the people that I know at a different pension fund, the worst part about it is dealing with all the BS that comes with working for the government.
BigSwingingDave: Go work for
Go work for CalPERS, then come back and tell me how much you love dealing with the State of California, their bureaucrats, and their politicians. From the people that I know at a different pension fund, the worst part about it is dealing with all the BS that comes with working for the government.
Assuming this is true, I'd find it difficult to believe that your average 20-something analyst would ever have to deal with any of the parties you mentioned. That being said, assuming what you say is true, that could definitely be a pain. Although, from what I understand, it seems more likely that CalPERS is the one who calls the shots. Not the politicians or bureaucrats.
"My caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested."
If that's not your cup of
If that's not your cup of tea, you can try the sophisticated endowments like Duke or Northwestern, or any of the spin off asst managers that peddle "the endowment model." Sexiest gig in the world? No, but these roles are not as difficult to get, pay decently, get your feet wet in the industry/exposure to industry veterans, and you can move on with CFA/grad school. As previously mentioned, great gigs if you're mid career and looking to slow down while still doing work that requires original thinking and pays well. Seconded.
If that's not your cup of
If that's not your cup of tea, you can try the sophisticated endowments like Duke or Northwestern, or any of the spin off asst managers that peddle "the endowment model." Sexiest gig in the world? No, but these roles are not as difficult to get, pay decently, get your feet wet in the industry/exposure to industry veterans, and you can move on with CFA/grad school. As previously mentioned, great gigs if you're mid career and looking to slow down while still doing work that requires original thinking and pays well. Seconded.
mikesswimn: BigSwingingDave
Go work for CalPERS, then come back and tell me how much you love dealing with the State of California, their bureaucrats, and their politicians. From the people that I know at a different pension fund, the worst part about it is dealing with all the BS that comes with working for the government.
Assuming this is true, I'd find it difficult to believe that your average 20-something analyst would ever have to deal with any of the parties you mentioned. That being said, assuming what you say is true, that could definitely be a pain. Although, from what I understand, it seems more likely that CalPERS is the one who calls the shots. Not the politicians or bureaucrats.
I can't speak for CalPERS, but nobody in our office deals heavily with external politics by design (except perhaps the CIO). Pensions are usually separated from direct political influence by an independent politically-appointed Board of Directors (composed of Bentley-driving corporate executives) in order to protect pensions from political influence. Politicians, like some corporate directors, love raiding pension funds to fund public giveaways.
If you can get into a pension
If you can get into a pension fund, chances are you can make it into a FoF, which usually gives equal or better pay with less bureaucracy. Especially if you try for a secondaries platform, the pay is usually better and you still have a chill life.
See my WSO Blog
I'm assuming the analyst
I'm assuming the analyst roles require 3+ years xp with that base salary.
inkybinky: mikesswimn: Bi
Go work for CalPERS, then come back and tell me how much you love dealing with the State of California, their bureaucrats, and their politicians. From the people that I know at a different pension fund, the worst part about it is dealing with all the BS that comes with working for the government.
Assuming this is true, I'd find it difficult to believe that your average 20-something analyst would ever have to deal with any of the parties you mentioned. That being said, assuming what you say is true, that could definitely be a pain. Although, from what I understand, it seems more likely that CalPERS is the one who calls the shots. Not the politicians or bureaucrats.
I can't speak for CalPERS, but nobody in our office deals heavily with external politics by design (except perhaps the CIO). Pensions are usually separated from direct political influence by an independent politically-appointed Board of Directors (composed of Bentley-driving corporate executives) in order to protect pensions from political influence. Politicians, like some corporate directors, love raiding pension funds to fund public giveaways.
I have always wondered about working for CalPERS. It looks really interesting, but I honest wonder if it is wise to attach myself to the state of California...And you have to live in Sacramento.
So is the work most similar to a fund-of-funds? And is advancement / job security closer to the private sector or government i.e. does it take you 5 years to get one promotion?
If "sexiness" ranks any
If "sexiness" ranks any higher than about 8th in characteristics you look for in a job, I can say at a 99% confidence interval that you are a douche bag
West Coast
Go work for CalPERS, then come back and tell me how much you love dealing with the State of California, their bureaucrats, and their politicians. From the people that I know at a different pension fund, the worst part about it is dealing with all the BS that comes with working for the government.
Assuming this is true, I'd find it difficult to believe that your average 20-something analyst would ever have to deal with any of the parties you mentioned. That being said, assuming what you say is true, that could definitely be a pain. Although, from what I understand, it seems more likely that CalPERS is the one who calls the shots. Not the politicians or bureaucrats.
I can't speak for CalPERS, but nobody in our office deals heavily with external politics by design (except perhaps the CIO). Pensions are usually separated from direct political influence by an independent politically-appointed Board of Directors (composed of Bentley-driving corporate executives) in order to protect pensions from political influence. Politicians, like some corporate directors, love raiding pension funds to fund public giveaways.
I have always wondered about working for CalPERS. It looks really interesting, but I honest wonder if it is wise to attach myself to the state of California...And you have to live in Sacramento.
So is the work most similar to a fund-of-funds? And is advancement / job security closer to the private sector or government i.e. does it take you 5 years to get one promotion?
CalPERS is a much larger organization than ours with nearly three times the funds under management and about ten times as many employees, because California government is really efficient. I don't know how many people they have in their investment division, so I'm sure the career dynamics are quite different than where I work.
Job security is pretty high. So is the pay. That means very few people move on to other pastures and promotions are a rarity.
SRRubio123: I'm assuming the
I'm assuming the analyst roles require 3+ years xp with that base salary.
I think they like 2+ years at VRS with some progress towards the charter, but remember, your bonus is highly unlikely to look like the "50%-100% of salary" like I've heard Wall St. firms pitching. Probably not a bad guess though.
"My caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested."
West Coast
"My caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested."