A legislative panel on Wednesday endorsed the Arkansas Public Employees Retirement System's request to create two deputy director posts as part of what its executive director described as a reorganization of the agency.
Under the proposal, which will go to the Legislative Council on Friday, the system would surrender three administrative specialist positions in return for creating the deputy director positions -- one for investments and finance and one for operations.
The annual salary for the posts would range from $108,110 to $147,200.
The cost for the two positions is nearly $260,000, and the system says it has sufficient funding for them, the state's personnel administrator, Kay Barnhill, said in a letter dated Wednesday to the the personnel subcommittee's co-chairs, Sen. David Wallace, R-Leachville, and Rep. David Hillman, R-Almyra.
System Executive Director Amy Fecher said the current chief investment officer, Carlos Borromeo, would fill the deputy director of investments and finance position.
For the deputy director of operations post, "We will search to find the best qualified person to assist the daily operations and statewide outreach to members and retirees," she said.
Fecher said in an Oct. 28 letter to Barnhill that the system has operated with 6o to 70 positions for decades, while it has experienced significant growth, with investments now totaling $10 billion to $11 billion. The system also has more than 80,000 working and retired members.
"When first created, the agency did not have the sophisticated and technical systems that are in use today," Fecher said.
The system formerly needed lower-grade positions that were used for clerical and data entry needs, but different skill sets and levels of education are now required for most of the positions, she said.
"We are surrendering all of the unfilled lower-graded positions, and are undergoing a reorganization of the agency to better align and reflect the current needs," Fecher said in the letter.
The system's chief investment officer salary is not competitive with those of other public pension systems, Fecher said. Many other systems offer a more generous base salary, in addition to incentives based on the performance of the fund, she said.
Borromeo's annual salary is $117,512, according to the Arkansas transparency website. Fecher's is $170,352.
Fecher said the deputy director of operations post would focus on internal operations such as human resources, communications and information technology and also help with a marketing plan to provide statewide outreach to members, including city and county governments.
On June 1, the system's trustees voted to hire Fecher, then secretary of the Department of Transformation and Shared Services, as the system's executive director starting July 1 without a vote to spare. Seven trustees voted for Fecher's appointment, while four trustees voted against it and two abstained, according to system records.
Fecher was selected over state treasurer's office Senior Investment Manager Steve Pulley; retired Fredericksburg, Texas, City Manager Kent Myers, who is a former Hot Springs city manager; and Borromeo.
In January 2019, the system's trustees voted to hire then-state budget administrator and former Republican state Rep. Duncan Baird of Lowell as the executive director over actuary Jody Carreiro and Borromeo.
Baird departed the system in April to begin work as senior manager of benefit services at Walmart, where he is responsible for administering the company's 401(k) plan.