Vermont Pension Investment Commission asks for $250,000 to start pay adjustments to retain investment staff

The Vermont Pension Investment Commission asked the Senate Appropriations Committee on April 8 for a $250,000 one‑time appropriation and a 3 percent base increase as part of its fiscal‑year 2026 budget request to begin implementing a compensation plan intended to retain investment staff.

The request accompanies VPIC’s regular budget request and reflects recommendations from a 2022 Mercer commercial compensation study that the commission provided to the Legislature under Act 75 when VPIC was spun off from the treasurer’s office. Tom, a senior VPIC official who briefed the committee, said the $250,000 would cover roughly a quarter of the near‑term gap between current pay and the commission’s target for certain positions. “That $250,000 would be about a fourth of the gap in compensation between where staff currently is and moving us toward median,” he told members.

Why it matters: VPIC manages the state’s pension investments, which Tom said currently total “a little less than $7,000,000,000.” The commission reported investment returns of 10.29 percent for the last fiscal year and multi‑year performance above assumed benchmarks; the commission argued that retaining experienced investment staff is a material risk to future returns.

Details of the plan and committee questions VPIC’s request is twofold: the standard 3 percent increase in operating funds and a supplemental $250,000 to begin implementing a phased pay plan that would, over several years, move key investment positions closer to the 50th percentile of market compensation. The Mercer study recommended a multi‑year approach; VPIC officials told the committee they plan to produce an implementation plan rather than commission another full market study. The commission also said it intends to reclassify two positions to exempt status to enable a market‑based executive pay plan.

Tom said the deputy chief investment officer is being actively recruited by peer pension plans and that the position’s current pay is “just over a hundred thousand dollars.” Committee discussion included VPIC’s estimate for bringing the deputy CIO nearer the median: an agency speaker estimated reaching roughly the mid‑$200,000s for that role over a multi‑year period if the plan proceeds.

Eric Henry, identified in testimony as VPIC’s chief investment officer, told the committee the commission’s recent returns compare favorably to peers. “The return numbers that Tom mentioned are all well above median,” Henry said, summarizing the commission’s investment performance since professional staffing was increased.

Committee members pressed on policy and optics. One member who said they work in academia voiced skepticism about raising public salaries to private‑market levels and asked whether performance‑based incentives had been considered. VPIC responded that Mercer had recommended consideration of pay‑at‑risk features but that the commission’s first step this year is to create an executive pay plan and begin closing the gap to market median without implementing incentive pay immediately.

Next steps The committee did not take a vote during the hearing. Members asked for additional detail in a formal implementation plan and for updated benchmarking in the plan to reflect market moves since 2022. Staff and the commission agreed to follow up with the implementation plan and additional documentation for the committee’s further consideration.