Contact: Schorr Johnson (919) 807-3132

Contact: Schorr Johnson (919) 807-3132 

Treasurer Cowell Warns of Low Bond Returns in Nationally Broadcast CNBC Interview

Raleigh—In a nationally-broadcast interview on CNBC’s “Fast Money” Tuesday evening, State Treasurer Janet Cowell warned that low returns for bonds and fixed income pose a challenge to North Carolina’s $80 billion pension fund and individuals trying to accumulate retirement savings.

“Fixed income is one of the highest risk places you can have your money and that means you're not going to have the money you need for retirement if you are putting your money in bonds,” Cowell said on the show. “Alternatives look increasingly attractive given the volatility of the stock market.”

Cowell also acknowledged the challenge of the outdated notion that bonds are a safe investment.

“I’m still fighting the thought that a lot of people have, particularly politicians, people that aren't in the investment class, that bonds are low risk,” Cowell told “Fast Money” host Scott Wapner.

“The ultimate definition of risk is not being able to have enough money to retire comfortably. Using that definition, bonds are a very risky investment right now. As interest rates rise, the price of bonds  will go down,” Cowell said in a statement after the interview.

Cowell continued her call for investment flexibility legislation to protect and grow the state’s pension fund. The state legislature sets the fund’s allocations and Cowell is pushing for the ability to diversify the portfolio to protect and grow the fund in the long term.

In May, the investment flexibility legislation (Senate Bill 558) passed 48-1 in the Senate. It also passed the House State Personnel committee by a vote of 12-1 before being held up in the House Rules Committee.

In the First Quarter of 2013, fixed income lost 0.5%, while the entire fund grew by 3.53%. Five-year projections for fixed income are 2-4% according to investment experts, which poses a challenge to reaching the pension funds 7.25% rate of return.

“The math does not work to hit the target rate of return. As a result, taxpayers would have to provide greater support of our pension system. That’s why we need the House to act immediately so that we can diversify our portfolio and protect the retirement security of thousands of North Carolinians,” Cowell concluded her statement.

Watch the entire interview here:


The North Carolina Retirement Systems, the formal name for the pension fund, is now the tenth largest public pension fund in the country. It provides retirement benefits and savings for more than 875,000 North Carolinians, including teachers, state employees, firefighters, police officers and other public workers. For more information, visit​.