House Revenue Committee advances SF38 to switch investment pay calculation from arithmetic to geometric mean

The House Revenue Committee on a 9-0 roll call on Senate File 38 voted to advance a bill that changes how multi‑period investment returns are calculated for performance compensation at the State Treasurer’s Office and the Wyoming Retirement System (WRS), moving from an arithmetic mean to a geometric mean beginning in fiscal 2026 with a two‑year lookback.

Supporters told the committee the geometric mean is the industry standard for measuring compounded investment returns and better captures volatility over multiple periods, while officials said the change would be marginal in fiscal impact. The committee vote was taken after public comments and presentations from WRS and the treasurer’s office.

Representative Larson, who presented the bill’s history, said the performance compensation program began after the state shifted more investment management in‑house around 2015–2016 and that the program allowed investment teams to share up to 2% of excess returns subject to caps. "When we set up both plans, they were both set up with arithmetic. But now you can see in the bill ... we finish out the arithmetic through the end of 2025 and then we switch over to the geometric,"…