Senate panel reviews Retirement and Investment Office budget; debate over in-house investing, bonuses and $35,000 teacher outreach

The Senate Appropriations Human Resources Division on Monday heard testimony on Senate Bill 1022, the appropriation for the Retirement and Investment Office, with agency leaders describing a planned move to bring some investment management in-house, an incentive compensation program for investment staff, and a request to restore $35,000 the House removed for teacher outreach.

Why it matters: RIO manages roughly $23 billion across 31 client funds, including the Legacy Fund and the Teachers Fund for Retirement. Lawmakers and RIO officials debated whether the office's plan will produce cost savings, how independent benchmarks and incentive pay are set, and whether the committee should restore a small education grant the Teachers Fund board approved but the House left out of its version of the budget.

Jody Smith, interim executive director for the Retirement and Investment Office, told the committee RIO expects efficiency gains from recent technology and from creating an internal investment team. "Right now, that's averaging 2 to 3 days because everything is automated in the system," Smith said when describing improvements in pension administration after a recent IT go-live. She said a separate internal investment team is scheduled for a go/no-go decision this week, with trades planned to begin April 1 if the team proceeds.

Smith said the office hired most of the internal team and is asking the Legislature…