North Dakota Emergency Commission takes no action on RIO bonuses

North Dakota’s Retirement and Investment Office rescinded its request for an emergency appropriation of roughly $1.3 million to pay for bonuses to 12 of its staff members during Tuesday’s Emergency Commission meeting, after concluding the group’s approval isn’t necessary.

The Emergency Commission reviews funding requests outside of the legislative session. The request was brought to the Commission following a State Investment Board (SIB) meeting where the 2025 fiscal year bonus payout was set to be approved but was tabled when questions were raised about the legal authority of RIO paying the bonuses without a specific line item appropriating money for them.

The RIO rescinded its request after Executive Director Jodi Smith told the Commission she spoke with an attorney in the Attorney General’s Office and was told the RIO had the authority to pay for the bonuses without a specific line item.

Smith clarified on Tuesday that the RIO did not receive a formal attorney general opinion on the matter but was verbally informed of the Attorney General’s Office’s perspective.

The Attorney General’s Office did not immediately respond to a Tribune request for comment.

Gov. Kelly Armstrong during the meeting said he encouraged the RIO to bring the request to the Emergency Commission. During the meeting Armstrong reiterated his displeasure with the structure of the investment plan but also his belief that it would be unfair to pull the bonuses from staff after promising them.

The bonus payout will likely go back to the SIB for approval at its next scheduled meeting in January.

Smith again said that the RIO investments that the incentive compensation plan is based on outperformed the benchmark by $191 million, which triggered a full payout of the bonuses — something Emergency Commission members said is important to highlight.

“That’s important for the public to know that you’re doing so well,” said Rep. Mike Lefor, R-Dickinson. “The thing is, we’re successful. That’s why this discussion is here right now, and that’s very important to know. $191 million more than the benchmark … That’s a big deal. That deserves a pat on the back.”

During the last SIB meeting, board member Adam Miller raised a concern that the calculation used to get the $191 million in excess returns cited by RIO did not align with state law.

Statute says the provisions of the incentive compensation plan must ensure that the payouts do not happen unless the “performance of the investments that are internally managed” exceed the policy benchmarks.

Smith said the $191 million in excess funds is based on the total performance of the top four funds managed by RIO. She clarified that only a portion of the top four funds are managed by the office’s in-house program and during Tuesday’s Emergency Commission meeting, she revealed that the in-house program manages just 15% of the office’s total portfolio. This accounts for roughly $3.75 billion of the roughly $26 billion RIO manages, according to Smith.

An RIO spokesperson on Wednesday told the Tribune, “the statute does not define ‘internally managed.’ The Retirement and Investment Office is still seeking legal guidance on the definition.”

The top four funds managed by RIO based on its 2024 annual comprehensive financial report are: the Legacy Fund, accounting for roughly $10.9 billion; the Public Employee Retirement System fund, accounting for roughly $4.3 billion; the Teachers’ Fund for Retirement, accounting for roughly $3.3 billion; and the Workforce Safety and Insurance Fund, accounting for roughly $2.1 billion.