Sunday, October 3, 2010 – 12:25 p.m.

Sources are telling that the head of San Bernardino County’s pension fund has tendered his resignation.

Timothy Barrett, executive director and chief investment officer for the San Bernardino County Employees Retirement Association (SBCERA) reportedly resigned Friday to take a higher paying position with an undisclosed employer in New York State.

Barrett’s departure comes as SBCERA has fallen under scrutiny from county supervisors regarding the award of hundreds of thousands of dollars of no-bid contracts to politically-connected consultants and revelations surrounding a performance-based bonus system.

Consultant arrangements reportedly under scrutiny involve Sacramento-based Platinum Advisors, Irvine-based Delta Partners LLC, and The David Ellis Group.

David Ellis, owner of Delta Partner’s LLC, and The David Ellis Group is an advisor to San Bernardino County District Attorney Mike Ramos.

Sources say SBCERA trustees put in place a system that would make various high-level employees eligible for lucrative bonuses based on the funds investment performance.

Barrett was reportedly made eligible for a maximum annual bonus equal to 100% of his annual salary of $325,000. is also being told Barrett was still eligible for a 22% bonus based on last years performance. Even though the pension fund “didn’t meet the mimimum threshold of 8% to meet actuarial requirements for pension and expsnes obligations”.

The fund whichm amde a profit last year is still trying to recover from losses incurred as a result of the market collapse two years ago.

Similar scrutiny has fallen on executives of the California Public Employees Retirement System (CalPERS) for a similar practice during a time when that fund has lost billions.

All employees of SBCERA are active participants in the county defined benefit pension system and accrue a lifetime pension benefit.

A few years ago SBCERA trustees successfully ushered through legislation in Sacramento giving them the power to become an independent special district.

Making SBCERA an independent special district removed the pension fund out from underneath the oversight of the county board of supervisors.

County taxpayers are ultimately responsible for making up any unfunded liability or shortage in SBCERA.

Currently, county supervisors are on the hook to make a payment of more than $90 million to SBCERA in it’s 2012-13 fiscal year. An increase of approximately 200% over this year.

SBCERA managers had been demanding compensation competitive with Wall Street and other pension systems, even though private fund managers don’t receive defined benefit pension benefits such as SBCERA employees.

Sources also say SBCERA trustees surveyed larger pension systems to use as a comparison in setting SBCERA compensation structure.

Now it appears the change may have opened the door to abuse.

Such heavy performance-based bonus structures led to serious risk taking on Wall Street in years past.

The SBCERA board of trustees is comprised of nine members and two alternates. County supervisors appoint four trustees, general members elect two members, safety members elect one member and an alternate, and retired members elect one member and an alternate.

The county treasurer is a permanent member by statute.

Board of Supervisors chairman Gary C. Ovitt, who recently joined the pension fund as a trustee has reportedly put the board on notice that their actions are under scrutiny.