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State pension fund head gets a $35,000 pay raise — again

Michael Trotsky.

The board of the Massachusetts state pension fund on Tuesday approved a second straight $35,000 pay increase for its executive director, increasing his salary to $430,000.

The board also approved a full 40 percent bonus for Michael Trotsky, who serves as both executive director and chief investment officer of the $62 billion fund.

Including his bonus, Trotsky’s total compensation for the fiscal year ended June 30 was $539,625, according to the pension board.

By comparison, he earned a total of $499,000 in the year ended June 30, 2015.

Bob Brousseau, a board member speaking on behalf of the compensation committee, said Trotsky exceeded his performance goals, both in delivering investment returns and through his management of the pension staff and operation.


For the fiscal year ended last June, the pension fund posted a 2.3 percent investment return.

The median return for institutional funds tracked by the Wilshire Trust Universe Comparison Service was 0.9 percent.

The state fund’s two-year performance places it in the top 2 percent of public pensions, Trotsky said. Five years ago, it ranked in the bottom 10 percent in the country, he said, after suffering steep losses during the financial crisis.

On a rolling five-year basis reported Tuesday, the pension fund had a 10 percent annualized return through Sept. 30, against an internal benchmark of 8.8 percent.

Trotsky took the job as head of the pension fund in 2010. A former investment executive, he assumed the additional role of investment chief in 2012. That move has saved the fund $300,000 a year, Brousseau said.

The fund’s performance is slightly behind its benchmark for the 12 months ended in September: It has shown a 10.8 percent return, versus 11.1 percent for its internal target.

Trotsky said the staff is carefully monitoring the impact on the fund of President-elect Donald Trump’s proposed policies, from potential trade tariffs to curbing immigration.


For example, with interest rates on the rise, a type of Treasury bond investment that’s been a huge performer for the fund for several quarters has recently declined.

Trotsky is one of the highest-paid officials in Massachusetts. The pension staff is not paid out of the state budget.

His latest base pay increase was effective Dec. 1. It was the second part of a larger raise recommended last year.

Beth Healy can be reached at beth.healy@globe.com. Follow her on Twitter @HealyBeth.