After a year-long search, Oregon’s Treasury named John Skjervem as the chief investment officer for the state’s main pension funds, which collectively manage $74 billion in assets. Skjervem replaces Ronald Schmitz, who announced last September that he was leaving…

Ronald Schmitz recently acknowledged to sister magazine Buyouts that the $900,000 in potential annual compensation offered by Virginia Retirement System factored in his decision to become its next chief investment officer this month. Schmitz had been CIO of Oregon Public Employees Retirement System since 2003.

Schmitz joins a parade of investment officers that have stepped down this year from positions at retirement funds in California, Massachusetts, New Mexico and New York. Some, like Schmitz, are staying in the public sector. Others, like Raudline Etienne, former chief executive of the New York State Common Retirement Fund, are heading into the private sector, in her case to join consulting firm Albright Stonebridge Group.

Just how big a role compensation plays in any individual departure is almost always impossible to say. Still, the latest edition of the 2011-2012 Holt-Thomson Reuters Private Equity and Venture Capital Compensation Report (North American edition) sheds light on what public pension funds are up against in competing with the private sector for talent–click through for infographic.

When a large public pension fund dangles $900,000 in potential compensation in front of applicants, it gets a lot easier to lure top talent.

That is exactly what the $51 billion Virginia Retirement System did when it announced it hired Ronald Schmitz (pictured) as its chief investment officer, replacing Charles Grant, whose contract expired in August. Schmitz is scheduled to start at the end of October.

Schmitz was hired away from the $60 billion Oregon Public Employees Retirement System, where he has been chief investment officer since 2003. Prior to Oregon, Schmitz had a similar role at the Illinois State Board of Investment.

The Virginia Retirement System reported a 14.1% return on its investment portfolio for the fiscal year 2010, ending the year with $47.7 billion in assets. The three-year annualized return was -4.9% and the five-year annualized return was 3.1%. Private equity returned 17.3%.