9-3-406. Retirement board; employment and compensation of director, consulting actuary and assistants; director designated secretary; compensation of members; quorum; seal.

(a) The board shall employ a director and a consulting actuary and other professional and clerical assistants necessary for the administration of the retirement system and the Wyoming deferred compensation program established under W.S. 9-3-501 through 9-3-508. The compensation of employees shall be fixed by the board, subject to confirmation and approval by the human resources division and together with all other necessary expenses of the board shall be paid by vouchers drawn on the state treasurer of Wyoming. The director shall also serve, without additional compensation, as secretary of the board. The board shall have the authority to obtain the financial and criminal background history of an employee or employment applicant of the Wyoming retirement system in accordance with W.S. 7-19-106 and 7-19-201. In fixing compensation of employees the board may implement and administer a performance compensation plan in accordance with this subsection. The plan shall:

(i) Be limited to those at-will employees of the board listed in paragraph (ii) of this subsection who are directly engaged in investing assets of the retirement system;

(ii) Be limited to the following participating employees:

(A) Chief investment officer;

(B) Senior investment officer;

(C) Investment officer;

(D) Senior analyst;

(E) Analyst.

(iii) Seek to maximize total returns net of fees on investments authorized by law and in the best interest of the retirement system;

(iv) Be based solely on investment performance exceeding investment benchmarks established pursuant to this paragraph. The board shall establish investment benchmarks, which shall be approved by the investment funds committee created by W.S. 9-4-720, for each fund and account for an investment period. No performance compensation shall be paid under the plan unless the board determines, subject to review by the investment funds committee, that the established benchmarks have been exceeded;

(v) Measure investment performance during an investment period based one hundred percent (100%) on total fund performance. For purposes of this subsection, "total fund" means the total or overall investment portfolio of the retirement system;

(vi) Provide that payments for investment performance for any one (1) investment period shall be as follows:

(A) For payments earned in fiscal year 2020 - the investment performance beginning July 1, 2019 and ending June 30, 2020;

(B) For payments earned in fiscal year 2021 - the arithmetic average of the investment performance beginning July 1, 2019 and ending June 30, 2020 and the investment performance beginning July 1, 2020 and ending June 30, 2021;

(C) For payments earned in fiscal year 2022 and each fiscal year thereafter - the arithmetic average of the annual investment performance beginning that fiscal year and the two (2) immediately preceding fiscal years.

(vii) Be funded from investment returns, with each invested fund's share calculated in proportion to the magnitude of aggregate investment earnings of each fund invested, including interest and dividends, which shall be continuously appropriated for payment of performance compensation as authorized by this subsection;

(viii) Include a limit for total payments to all participating employees for performance compensation earned in any one (1) investment period in an amount not to exceed two percent (2%) of net investment returns above the established benchmark of the total fund for that investment period;

(ix) Include a limit for total payments to an individual employee for performance compensation earned in any one (1) investment period in an amount not to exceed the following:

(A) One hundred percent (100%) of a chief investment officer's base salary;

(B) Seventy-five percent (75%) of a senior investment officer's base salary;

(C) Fifty percent (50%) of an investment officer's base salary;

(D) Twenty-five percent (25%) of a senior analyst's or analyst's base salary.

(x) Provide that performance compensation earned in any one (1) investment period will be paid over a three (3) year period as follows:

(A) Twenty-five percent (25%) during the fiscal year immediately following the fiscal year in which the performance compensation was earned;

(B) Twenty-five percent (25%) during the second fiscal year following the fiscal year in which the performance compensation was earned;

(C) Fifty percent (50%) during the third fiscal year following the fiscal year in which the performance compensation was earned.

(xi) Provide that performance compensation shall be forfeited by an employee upon termination of employment subject to an anti-compete agreement for future employment related to asset management. This paragraph shall not apply to termination based on death, disability or retirement;

(xii) Provide that performance compensation shall not be included as compensation for the purpose of computing retirement or pension benefits earned by the employee;

(xiii) Subject participating employees to the following terms and conditions related to leave time:

(A) Chief investment officers, senior investment officers and investment officers shall receive leave time in the same manner and amount as department directors under W.S. 9-2-1706(b);

(B) Senior analysts and analysts shall receive leave time in accordance with standards and rules established or promulgated in accordance with W.S. 9-2-1022(a).

(xiv) Provide that performance compensation shall only be based on performance criteria occurring on or after the execution of an employment contract in accordance with this subsection. No performance compensation shall be paid other than as provided in the employment contract;

(xv) Be submitted to the joint appropriations committee and the select committee on capital financing and investments for comment, and approved by the human resources division, prior to implementation. The human resources division shall not disapprove a performance compensation plan which complies with the requirements of this subsection;

(xvi) Be submitted and administered by the board as a separately designated and appropriated budget unit.

(b) The members of the board, other than the five (5) elector members shall serve without compensation but shall suffer no loss of wages for the time devoted to the duties of the board. The elector members of the board shall receive fifty dollars ($50.00) per day for the time actually and necessarily devoted to the duties of the board. All members and employees of the board shall be reimbursed for their expenses incurred through service on the board at rates applicable to other state employees.

(c) A majority of the members of the board constitutes a quorum for the transaction of its business. The board may adopt and use a common seal and alter it at the board's direction.

(d) The board shall report to the joint appropriations committee and the select committee on capital financing and investments by November 1 of each year on the plan authorized by subsection (a) of this section. The report shall include:

(i) Payments and methodology of calculating payments under the plan;

(ii) A measurement quantifying the risk resulting from the variation between the prior year's investment benchmarks and the prior year's actual investments;

(iii) An estimate of future payments under the plan and future expected investment benchmarks.