Vermont Pension Investment Commission asks Appropriations committee for $250,000 to begin staff pay adjustments and seeks exempt status for two positions

Tom Golonka, chair of the Vermont Pension Investment Commission, and Eric Henry, the commission’s chief investment officer, told the House Appropriations Committee on Feb. 13 that VPIC manages the assets of Vermont’s state teachers, state employees and municipal employee pension plans in a single trust and is requesting a small budget increase to begin addressing staff pay and classification.

Golonka said the pooled assets are “currently 6 and a half, 7,000,000,000, somewhere in that range,” and that the commission’s FY2026 request includes a $250,000 line item to start implementing recommendations from a compensation study. “For that $250,000 our proposed budget for fiscal 26 looks a lot like fiscal 25,” Eric Henry said, adding that the governor did not approve the $250,000 in his proposed budget.

The request is intended to begin a multi‑year “glide path” to raise staff pay from the commission’s current percentile among peers and to convert two positions from classified to exempt, Golonka said. The commission identified “key person risk” because its investment staff is small — Golonka described the office as four people — and told lawmakers that losing specialized staff could compromise the commission’s work on investment performance and engagement programs.

Nut graf: VPIC framed the request as a modest, non‑general‑fund cost that would protect the state’s retirement system by reducing staff turnover, preserve in‑house investment expertise that the commission says has delivered above‑benchmark returns, and maintain unusually low fees for a public pension program.

Committee members and VPIC staff discussed three related themes: (1) pay and classification for VPIC staff; (2) the commission’s investment performance, fee structure and risk controls; and (3) the potential consolidation of OPEB assets into the VPIC pool.

On staffing and compensation, Golonka said a Mercer compensation study (the commission cited an October 2022 Mercer study) showed VPIC staff pay at the 10th–14th percentile of peers and recommended phased increases. Golonka described a plan to work with the governor’s office on exempt classifications and an executive pay plan to implement increases over roughly five years. The commission asked lawmakers to fund the initial $250,000 in its FY26 budget to start that glide path.

On fees and performance, VPIC emphasized low all‑in costs and strong returns. Henry said VPIC’s private equity program ranked first nationally among public pension funds for a 10‑year returns look‑back and pointed to the commission’s decarbonization and engagement work. On fees, Henry said the commission’s reported management fee “would still remain about 4 basis points,” and that an all‑in historic fee figure has fallen from the high‑sixties basis points a decade ago to roughly the low‑40s all‑in at one point as the commission brought work in‑house. VPIC representatives said those figures are approximate and that the incremental $250,000 would be immaterial to the fee rate.

Henry described a past decision to terminate a highly leveraged strategy before the COVID‑era market shock and quantified the avoided loss: “We avoided an $80,000,000 loss by doing that,” he told the committee, saying that underwriting clarity and limiting complexity are guiding principles for VPIC’s investment program.

The commission also discussed the potential administrative or investment benefits of consolidating OPEB (other post‑employment benefits) assets with the VPIC pool. Golonka and Henry said consolidation could lower fees, improve access to private market investments and allow OPEB assets to participate in the commission’s private equity allocation. They cautioned that custodial, accounting and unitization work would be required, and said any consolidation decision would rest with the treasurer and the legislature.

Committee members asked for the commission to provide written language on the exempt‑status request and links to the Mercer study and the commission’s executive summary. Henry said the budget book’s last page shows the $250,000 base initiative and that the executive summary and study links are included in VPIC’s materials. Golonka identified Becky Wasserman in the treasurer’s office as the staff contact who has worked with the commission on classification language.

The discussion did not include a committee vote or formal action on the budget request during the portion of the hearing recorded in the transcript.