By Erich Wagner
The state retirement agency defended its foreign travel expenses from criticism by state lawmakers Friday, saying the spending is a necessary part of their duties.
Baltimore City Democratic Sen. George Della’s remarks Thursday on the floor of the Maryland Senate about the state retirement agency’s travel expenses caused a stir. Speaking on “personal privilege”– on a topic not on the agenda — Della called the $170,123 spent in fiscal year 2009 on travel to Hong Kong, Tokyo, Frankfurt and Paris “a waste,” and an example of “bureaucracy gone wild.”
But officials with the retirement system said the trips were not lavish junkets, as Della suggested, but necessary work trips to vet prospective investments and check up on current ones.
“We don’t send more than two staff on a trip, and in some instances we only send one,” said Dean Kenderdine, the agency’s executive director. “We also combine traveling as much as possible. If there are three companies in the Los Angeles area, we don’t make three trips, we combine them to be as efficient as we can.”
Kenderdine spoke during a Senate budget hearing for the retirement system. He said the agency does as much as it can electronically, but officials need to have an on-site visit with investment managers each year. The retirement system must also send representatives to meetings of investment advisory boards they serve on.
The staff members try to time these meetings with other investigations, so as not to waste money on unnecessary trips, said Kenderdine.
“These are not conferences or vacation-related travels,” Kenderdine said.
Sen. Edward Kasemeyer, vice chair of the budget committee, said the agency should have taken other officials’ leads regarding making at least symbolic efforts to reduce costs.
“You could have shown a little restraint,” Kasemeyer said. “But you spent to the limit of your [appropriation].”
Della said he didn’t buy the agency’s argument.
“If they want our investment, they will come to us, rather than one individual traveling to Europe,” Della said. “In this electronic age, all of this is readily available at your fingertips.”
But Sen. J. Lowell Stoltzfus, R-Lower Shore, saw the retirement system’s travel spending as a non-issue.
“From my perspective, when you’re managing investments of this size, you’ve got to spend some money” to check on them, Stoltzfus said. “You didn’t spend over budget, and it’s your fiduciary responsibility to be good managers. We should be focusing our time and energy on something more important.”
Senate Budget and Taxation Committee Chairman Ulysses Currie agreed, and said the General Assembly should wait until the agency submits a report on travel expenses for pension systems in other states.
“The agency raised up to $31 billion, and did not go over budget spending on travel,” Currie said. “It was a good discussion…We depend on that agency to fund all of our pensions, so until we know more we should hold off on acting.”