The Employees Retirement System (ERS) generally calculated and paid incentive compensation for its plan year ended August 31, 2015, in accordance with its policies and procedures. However:
ERS incorrectly calculated the proration for one employee, which resulted in an overpayment of $176.77. For incentive calculations, ERS employee promotions are prorated effective as of the date of the promotion. The overpayment occurred because ERS used the wrong promotion date for the proration calculation, and subsequent reviews did not identify the error.
ERS does not have written policies and procedures regarding the incentive compensation calculation and review process. That increases the risk of inaccurate award payouts due to mistakes in the calculation and review process.
ERS awarded a total of $4,764,067 in incentive compensation to 63 employees. ERS awarded the most incentive compensation to its chief investment officer, who was awarded $382,777 payable over a three-year period.
That $382,777 represented 8 percent of the $4,764,067 in total incentive compensation that ERS awarded. The ERS executive director, who was appointed on June 1, 2015, did not receive any incentive compensation for
the 2015 performance period.
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