RALEIGH – The market is having a day, as in, a bad day. That may be an understatement with US indices down nearly eight percent Monday afternoon, having already been halted once already during the trading session. Whenever days like these come, those with 401(k) and pension plans are understandably concerned.When it comes to the N.C. state pensioners, though; they should rest easy.
State Treasurer Dale Folwell, elected in 2016, has helped steer North Carolina’s state employee pension fund out of less predictable waters and into safe harbors that expose it less to the roughest waters of Wall Street. Folwell released the following statement to put pensioners mind at ease on Monday.
“We want to assure the nearly 950,000 members who are paying into or receiving pension payments from the North Carolina Retirement Systems that the stock market’s recent downturn will have no impact on their pension payments. As of today, the state pension plans are down less than 1%. This is because the plans have been conservatively managed under the Folwell administration and other administrations for the past 50 years.
In fact, Moody’s Investors Service recently reported that North Carolina’s Retirement Systems is the best funded in the nation when looking at its Adjusted Net Pension Liability. Additionally, a recent “stress test” by The Pew Charitable Trusts concluded that North Carolina’s state pension fund is well-positioned to maintain solvency during tough economic times.
We are in the check delivery business. We pay out over $6.5 billion a year in pension payments to those that teach, protect and serve the people of North Carolina. “
Again, indices like the Dow Jones Industrial Average and S&P 500 are down more than seven percent on Monday as of publication. The N.C. pension plan, less than one percent. This is prudence in action, and something all North Carolina taxpayers should be thankful for. The urge to chase high-flying investment vehicles that offer big returns always comes with a risk of large losses. Yet any shortfalls in the pension are ultimately made up for by taxpayers. That’s why conservative investment approaches over the long term end up saving the day during the bad times, even when their annual returns may not be quite as alluring during the good times.