The chief executive at California’s largest public pension fund will earn more than $1 million for the first time since she joined the agency — after its administrative board awarded her a bonus that was more than triple the size of her last performance incentive. 

Marcie Frost will receive a $667,320 bonus on top of her base pay of $578,000, the pension board announced today. That will bring her total pay above $1.2 million.

She earned $752,000 in total compensation last year, according to records released by the state controller. That included a bonus of $192,682. 

The California Public Employees’ Retirement System is coming off a solid year on its most important benchmark. It earned a 9.3% return on its investments, which exceeded its target of 6.8%. That’s good news for the $528 billion pension fund, which charges California government agencies extra money when it misses the target.

Frost joined the agency in 2016 after leading a Washington state pension fund for public employees. At the time of her arrival, CalPERS made major changes to how it funds public employee pensions. That’s when it conceded that it expected to earn less money over time from its investment portfolio and began charging government agencies more money up front to pay for their employees’ pensions.

She also led the fund through the COVID-19 pandemic and she has participated in its efforts to address climate change.

The chief executive typically is not the highest-earning position at CalPERS. That role is the fund’s chief investment officer, who sets the strategy for CalPERS to hit its annual earnings target. 

CalPERS has struggled to keep executives in that position. Chief Investment Officer Stephen Gilmore joined the fund in July and is the fourth person to hold that job since Frost came to CalPERS.

California’s second-largest pension fund, the California State Teachers’ Retirement System, is scheduled to award bonuses next week to its top executives. CalSTRS Chief Executive Cassandra Lichnock earned $984,000 in total compensation last year, which included a bonus of $574,000. That fund holds about $341 billion in assets.

Both major public pension funds are considered to be underfunded because they owe more in benefits over time than their assets are worth today. As of their most recent public disclosures, both funds have assets worth about 75% of what they owe to current employees and retirees.

Their deficits date to a policy change in 1999 that increased retirement benefits for public employees at a time when the pension plans were considered overfunded, as well as to their investment losses in the Great Recession. Public employees hired after Jan. 1, 2013 receive less generous pensions, and both funds have long-term plans to return to full funding. 

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics. ​​

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