Detroit Police and Fire pension official sued over 70% pay raise
DETROIT – When the city of Detroit emerged from bankruptcy five years ago, there was a big question: Could the city move forward knowing there was new and tough oversight in place?
A lawsuit has been filed about infighting over pay with the Detroit Police and Fire Pension Board. The board is battling with the investment committee set up by the bankruptcy deal. They’re arguing over how much to pay the investment advisers.
Detroit homicide detective and pension board chair Matt Gnatek is furious with Robert Smith, the investment committee chairman. It’s because of Kevin Kenneally, an investment adviser to the city and the money he’s been making.
“A 75 percent raise and there’d be a $60,000 signing bonus,” Gnatek said.
He was the deputy chief investment officer up until a few months ago, but he quit his quarter of a million dollar a year job working for all the Detroit pension systems and Smith hired him as a consultant instead. Gnatek believes that’s against IRS rules.
“He would only be working on police and fire, so, yes, essentially be doing a lot less work for a substantial amount more,” Gnatek said.
Gnatek is also angry about how the pension board is paying its chief investment counsel, Ryan Bigelow, who’s received recent raises, putting his pay at more than $300,000 a year.
Local 4 spoke with Smith from his Cleveland office on the phone and he said he’s glad to be going to bankruptcy court. He said they tried to settle, but decided to follow the guidance of the bankruptcy court.
Smith relied on a study of large pension investment advisers and the raises we spoke of are in line with the study.
Copyright 2020 by WDIV ClickOnDetroit - All rights reserved.