Massachusetts pension officials said they are alarmed by the growing number of vacancies in key positions at the office that oversees $50 billion in government employee retirement savings.
The agency's executive director, Michael Trotsky, recently told its board of directors that the vacancies have created an "unacceptable level of risk" because the remaining employees have had to do double duty until those positions are filled.
One pension board member said the empty slots will be difficult to fill unless the office, called Pension Reserves Investment Management, or PRIM, can offer job candidates more money, as well as bonuses and pay increases to retain them if they perform well.
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The pension fund's longtime investment chief, Stanley P. Mavromates Jr., is leaving, adding to three other positions that have been vacant: two in the group that oversees private equity investment, and an open job to oversee the state's new program investing directly in hedge funds. The office has a total of 28 positions.
Trotsky said in his report to board members that the office did not have as much trouble during the financial crisis in 2008 and 2009, when financial firms were struggling and laying off workers. But in a sign the economy is coming back, so is the competition for talent.
Katherine O'Neil, the pension fund's director of finance, resigned on June 1 to join a venture capital firm at significantly higher pay.
A hire the board had made to fill one of the private equity jobs backed out when the person learned that Mavromates was leaving.
Trotsky said the board gave him authority to hire a search firm as soon as possible to start looking for Mavromates's replacement.
"The idea is to give me the tools to get started quickly,'' Trotsky said in an e-mail.
For Trotsky, who joined as executive director in 2010 with a mandate to improve performance and curtail risk after steep losses in the financial crisis, the job vacancies present a challenge. He said he hopes the board's compensation committee will meet several times over the summer and present some solutions by October, "before things get worse."
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It's not that the pension fund staff is underpaid by the standards of average workers; Mavromates, for instance, earns $245,000 annually, with the possibility of a 40 percent bonus. But in a city such as Boston, with a vibrant investment sector, talented people can earn far more in the private sector than working for the state. Compensation accounts for about 2 percent of PRIM's $313 million budget.
Pension board member Alexander Aikens said he had no doubt the vacancies were the result of compensation issues.
"PRIM has yet to define what it compensates people for. I think you pay people for their performance."
The pension fund was up 7.1 percent for the year through the end of April; the Standard & Poor's 500 Index was up 11 percent in that period. The markets fared poorly in May; PRIM has said it did better than the market.
Beth Healy can be reached at bhealy@globe.com.