State Treasurer Folwell Reports Benchmark-Beating Pension Returns

RALEIGH –  Republican State Treasurer Dale Folwell keeps racking up positive achievements through little more than a year at the helm of the Old North State’s retirement systems and state health plan.

Folwell announced Tuesday that the state pension plan reported gains of 13.5 percent for calendar year 2017, outperforming its benchmark of 12.8 percent. The total pension fund assets were valued at $98.3 billion, up from $89.1 billion at the end of 2016. And the state treasurer posted the benchmark-beating returns while also exposing the State to lower risk.

“We are very pleased to see these gains at a time when the pension fund as a whole had less exposure to risk,” said Treasurer Folwell. “Our investment management team, including interim Chief Investment Officers Chris Morris and Jeff Smith, has done an outstanding job of protecting and sustaining the pension plan on behalf of the public workers who rely on it during their retirement.”

It is not only the public workers who should be grateful for the laudable management of the state pension funds; taxpayers should be appreciative, too. If pensions were to drop below a level necessary to pay out pension contracts with state retirees, there would be a clamor for the taxpayers to pitch in (again), so lower risk and higher returns is exactly what North Carolinians want to hear.

The numbers break down as follows:

  • Public equity, which makes up almost 40 percent of the total fund, gained 24.4 percent
  • Private equity rose 12.0 percent
  • Non-Core Real Estate and Opportunistic Fixed Income returned 12.4 percent and 7.1 percent respectively
  • The multi-strategy portfolio rose 13.6 percent for the twelve-month period
  • Inflation-sensitive and diversifier investments increased by 8.6 percent
  • Investment-Grade Fixed Income earned 4.4 percent

Treasurer Folwell and the investment management team also cut costs significantly in 2017 to provide more value to members of the pension plan. During the first year of Folwell’s administration, fees paid to Wall Street investment managers were reduced by more than $60 million for a projected savings of $240 million over four years. That figure exceeds Folwell’s pledge to cut fees by $100 million over four years.

Expect more good news stemming from the prudent management of the State Treasurer in months to come. The people of North Carolina certainly made a good choice in electing a conservative, forensic accountant with a history of taking care of business to helm to this important, yet often overlooked, department.

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