JAC Agency Hearings JAC Index 12-13-17am1 Wednesday December 13, 2017 Agenda: AM 072 – Wyoming Retirement System 12/13/2017 8:02:26 AM Chairman of the Day: Senator Burns Roll Call: Richards, quorum established 12/13/2017 8:03:00 AM 072 – Ruth Rierson, Director, Davis Swindell, Deputy Director Rierson, Overview of program and responsibilities, fewer active members within system, 30 year funding went from rolling 30 years to 30 year closed, pg. 14 Sommers: deferred vested, worked for 4 years for the state and left the money in the fund, potential to come back, non-vested and active – less than 4 years contributed to fund, can claim a refund later on in years, can take a refund anytime Larsen: non-vested and active, money earned, employer match, can claim what was put in Wilson: employer contribution for new employees, take back part, employee, 8 ¼% Sommers: chart breakdown of discussion Rierson: spreadsheet - will copy and send Larsen: employer contribution discussion Rierson: interest earnings discussion, non-vested non active account small amount, pg. 14 ER’s listed, pg. 18 table for revenue, questions, pg. 20 ER #1, rain and on base software enhancements, spent $10M of $14M, $729K one time in contractor support, changes in legislation effects software, no ability to send a return e-mail, pg. 22 ER#2, zero-based IT software accounting software, etc. - $86K, 4 year computer replacement cycle Sommers: maintenance agreements trending up? Do you negotiate maintenance agreement prior to purchase? Swindell: have seen increases, 3% increase, above current inflation Larsen: justify increase or pay bill? Swindell: negotiations on increase most will not go past 3 year life span of computer Rierson: ER#3, website maintenance, $60K Burns: 0234 more than doubles Swindell: increased amounts, meeting expenses Rierson: pg. 29, AWEC positions, convert contract positions to permanent positions potentially later date, no salary increases for investment team, no performance dollars Larsen: AWEC positions, promising young folks, University students, cooperate with Treasurers office in finding jobs Rierson: want flexibility in moving folks up; doesn’t exist yet, contracts, flexibility retitle positions Dockstader: good news in keeping young folks in state Rierson: quality of UW students wonderful 12/13/2017 8:35:52 AM Schwartz: increase funding. Performance funding Rierson: spending conscientiousness practice, 3 basis points would cover performance funding Wilson: footnote discussion Burns/Richards: 6years ago, limitation on highest paid individuals, salary increases Rierson: basis points change, handout 045 outlined Larsen: org chart requested Reierson: will provide, no changes in investment analyst positions Sommers: pg. 6 of handout 045, increase wages, provide an example for performance compensation Rierson: will provide, pay under median for investment team, can come up with minimums and maximums, incentive compensation Burns: why does WRS have their own investors vs. state investment team? Rierson: 5 years small groups, small staffs, different mandates, structured for long term growth Burns: 0222 increased Rierson: taking 2 to train junior member, 0207 licenses registration went up, more licenses, admin section Swindell: investment team, 900 series, less consultants Rierson: Highway patrol and G and F wardens. July 1987, legal approval to be paid Hibbert: special revenue captured for HP and G &F Rierson: numbers go down every year, pg. 38, deferred compensation, plan grows-fees reduced, 457 plan, self-funded plan, 8 equity options for members to select, life path funds, admin fee – 30 basis points going down to 27, auto enrollment for state hires, 95% stay rate, state matches, separate fund from pension, no penalty for early withdrawal, 100% taxable income, advertising, handouts Swindell: trying to reach all employees Rierson: no co-mingling of funds, defined benefit plan, professional fees for RAIN system maintenance, space rental Nicholas: performance of team, pg. 18, annual rate of return, goes into 5 year plan, more investment in house, fee savings, complete breakdown of all fees, increasing contribution rates, actuaries recommendation, how long to get there, Fire A and B, rate of return, why/impact, raise 2 ½%, modify plans, history, can we repeat split Rierson: peer comparison, 5 year plan, one specialist in each class, 4 major asset classes, analysts, build the staff out, switch analysts around, finding strong point, 1983, diversified portfolio, 3 year performance – peer comparison, middle of the pack, professional fees annual payment for all funds - $36M, grow over time, building out private equity portfolio, change actuaries, scenarios, phasing in contributions, bring comprehensive study in cost savings, etc., ½% increase, 40 years to be 100% funded in the fund, actuaries trying to get 50% above plan, no COLA, statements for Fireman B, bring a comprehensive solution, other plans complete review, Fire A has COLA, dropped inflation, increased real return by a ¼, 7% rate of return achievable, impact funding and need for contributions Landen: employees and employer’s contributions/noncontributory Rierson: consistency, employers picking up 100% of employees contributions, different tiers take a long time, tier 1 – a different multiplier, tier 2 – flat multiplier, compensation rates identical 12/13/2017 9:30:38 AM Rierson: fully fund plan without constantly asking for increase in contributions, 2 plans saving costs, refund provision, deferred compensation plan – allows for legislators to join, reasons public pension plans lost was in 2008, 70% investment earnings, digging out of hole took time, professional team helped, in better shape than other state pension plans, COLA’s, 30 years make up $1.8B, stopgap measures in place, substantial change, new CIO, 1/3 of portfolio has changed, team stability key, investment timeframe, 2/3 liquid in public market, Fire B, part of comprehensive study 12/13/2017 9:45:49 AM Break