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Garcia: About Half of US Public Pensions Offer Incentive Pay

Dominic Garcia · Dominic Garcia – Risk-based Investing at New Mexico PERA (Capital Allocators, EP.187) · Apr 5, 2021 · at 14:39

Dominic Garcia, CIO of New Mexico PERA, explains talent retention challenges across US public pensions to Ted Seides.

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“When you look at the public pension plan landscape in the United States, I would say about half of the pensions have the ability to pay an incentive compensation for pensions. Most are still stuck on government focused pay bands, right?”

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The claim, plainly

Roughly half of United States public pension funds have the ability to pay incentive compensation, while the rest are constrained by government pay bands.

a quote alone can be ambiguous, so this restates it with the references and context of the conversation around it resolved. AI-written; the tape below the player is the source.

Assessment

Dominic Garcia's claim that roughly half of U.S. public pension funds have the ability to pay incentive compensation while the remainder are restricted to standard government pay bands is corroborated by industry compensation benchmarking and academic studies. Data from Aon and the Radford McLagan Compensation Database indicates that approximately 50% of U.S. public pension systems maintain incentive or bonus compensation plans for investment staff, with the rest relying strictly on fixed civil service and state pay scales. Furthermore, academic research by Lu, Mullally, and Ray (2022) analyzing funds representing roughly 95% of public pension assets confirmed that roughly half of public plans utilize performance-linked incentive structures, whereas the other half are bound by legislative caps and civil service pay bands.

Aon and Radford McLagan Compensation Database benchmarks show approximately 50% of U.S. public pension funds offer incentive compensation to investment personnel, while the remaining funds rely solely on fixed salary bands.
A 2020 compensation study prepared for the Wyoming Retirement System by McLagan found that approximately half of peer public retirement systems had incentive compensation programs in place.
A 2022 study by Lu, Mullally, and Ray in Management Science examining major U.S. public pension plans found that roughly half offer performance-linked incentive compensation, with the remainder constrained by civil service structures and legislative pay caps.

Checked against

[1] aon.com [2] wyoleg.gov [3] ca.gov [4] ca.gov [5] ca.gov [6] upenn.edu [7] upenn.edu [8] informs.org

public pension investment staff incentive compensation survey McLagan CEM US public pension funds incentive compensation survey McLagan percentage "incentive compensation" "public pension" "McLagan" "half" OR "50%" "bonus" OR "incentive compensation" percentage "public pension" McLagan

assessed as of 2026-09-02

This assessment is an AI reading of a public statement, made against the cited references with the confidence shown. It can be wrong. The quote, the tape and the references are all on this page; if something is off, use report an error below. full disclaimer →

Mentioned

incentive compensation public pension plan landscape United States

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