§ 9-4-716 — State investment policy; investment consultant

(a) The board, in consultation with the investment funds
committee, shall adopt investment policy statements for state
funds and shall review those policy statements at least
annually. These policy statements shall be subject to the
following:
(i) The board may specify groupings of state funds
for which separate investment policy statements are appropriate.
At a minimum, those groupings shall include state funds for
which there is a trust obligation, short term funds for
operations and all other funds. The board may determine criteria
under which certain funds shall be separately managed;
(ii) Nothing in this section shall be construed to
prevent the state treasurer from pooling any state funds for
investment purposes, including meeting cash flow requirements in
accordance with approved investment policy statements;
(iii) The state treasurer shall vote the shares of
investments of state funds or use proxy voting in accordance
with W.S. 9-4-722;
(iv) Investment policy statements shall include the
requirements for investments to be made based on only pecuniary
factors in accordance with W.S. 9-4-722.
(b) The investment policy statements shall include the
following:
(i) Nominal return benchmarks;
(ii) Definition of risk and of return;
(iii) Risk tolerance;
(iv) Permissible investments and quality standards;
(v) Liquidity requirements;
(vi) Cash flow projections for the grouping of funds;
(vii) Procedures for selecting and dismissing
investment managers when utilized;
(viii) Indices or benchmarks against which the
returns will be measured;
(ix) Two (2) risk mitigation metrics for managing and
mitigating the risks of investments consistent with the strategy
specified in W.S. 9-4-715(d)(ii):
(A) One (1) metric shall specify the maximum
percentage of monies in the state fund or state funds that may
be invested in securities in consideration of all the factors
developed for the fund's investment policy statement under this
subsection; and
(B) One (1) metric shall measure risk in the
state fund or state funds using a value at risk measurement
technique or other similar risk measurement technique.
(c) The state treasurer, in consultation with the
investment funds committee, shall develop and submit proposed
investment policy statements for each grouping of state funds
specified in subsection (a) of this section and may contract for
assistance in developing proposals or in making suggestions for
modifications to existing investment policy statements. The
state treasurer shall report quarterly to the board and the
investment funds committee regarding the performance of
investments with respect to each grouping of state funds
specified by the board under subsection (a) of this section and
such other information as may be required by the board.
(d) The board:
(i) Shall procure the services of a qualified entity
to evaluate:
(A) At least annually, the reasonableness and
comprehensiveness of the investment policy statements required
under this section;
(B) At least quarterly, the performance of the
investments for each grouping based upon recognized indices and
the reasonableness of the mix of assets in light of anticipated
cash flow requirements and the investment policy statements;
(C) At least annually or when market conditions
warrant a change or reallocation of investments, the risks of
investing state funds using the metrics specified in the
investment policy statements pursuant to paragraph (b)(ix) of
this section and the risk profile under subsection (e) of this
section.
(ii) Shall require competition to procure those
services required under paragraph (i) of this subsection at
least every four (4) years;
(iii) Shall receive an appropriation directed to the
office of state lands and investments to be used to compensate
the entity retained under paragraph (i) of this subsection for
its services.
(e) In investing monies of a fund or account which may be
invested in stock of a corporation or other equities, the
overall risk profile of the investments, excluding any specific
public purpose investment authorized or directed by the
legislature, shall not materially exceed the risk profile of a
reference portfolio that consists of seventy percent (70%)
global equities and thirty percent (30%) domestic fixed income
investments. The state treasurer after consultation with the
investment funds committee shall submit to the board the
committee's recommendations of specific benchmarks for the
measurement of the portfolio risk characteristics. The specific
benchmarks shall be determined by the board. Any provision of
law which restricts the investment of a specific fund or account
to a greater degree than the provisions of this subsection shall
control over this subsection.
(f) Investments made in accordance with this section and
W.S. 9-4-715 and policies adopted pursuant to this section shall
be deemed to satisfy provisions of law which require funds to be
invested in a manner to obtain the highest net return consistent
with preservation of principal or the corpus of a fund.