RALEIGH, N.C. –State Treasurer Dale R. Folwell, CPA, today
reported state pension fund (the Fund) returns for the first quarter of 2017
ending March 31, 2017. The fund, comprised of the retirement plans the
Department of State Treasurer manages, reported gains of 4.1 percent for the
quarter. Pension fund assets were valued at $92.2 billion, up from $89.1 billion at the end of the fourth quarter
of 2016. This report reflects the first earnings statement during the
“Our public equity portfolio did especially well during the
first quarter of this year, but fixed-income continues to lag due to
historically low interest rates,” said Treasurer Folwell. “We are focused on
reducing complexity and fees in the state pension plans. We also want to
gradually lower the expected rate of return to more accurately reflect
For the last 12 months ending March 31st, the Fund
earned 9.6 percent. Public equity (stocks), which makes up more than 40 percent
of the total fund, gained 14.9 percent. Private equity rose 6.6 percent while
Non-Core Real Estate and Opportunistic Fixed Income returned 12.1 percent and
12.9 percent respectively. The Multi-strategy portfolio rose 11.8 percent for
the twelve month period. Inflation-sensitive and Diversifier investments also
increased by 10.9 percent. Finally, Investment-Grade Fixed Income returned 0.9
percent for the same period.
Since entering office in January of this year, Treasurer Folwell
has contacted more than 150 money managers representing 99 percent of the
pension plans’ assets and asked them “who they are, how much money they manage,
how well they perform, and how much they charge in fees.” As a result of this
process, he has been able to cut $25 million in fees making substantial inroads
to his pledge to cut $100 million before the end of his first term.
“The fees cut so far are the floor, not the ceiling,” added
Treasurer Folwell also pledged to gradually reduce the pension
plans’ expected rate of return. Just last month, he announced that the Teachers’ and State
Employees’ Retirement System (TSERS) and Local Government Employees’ Retirement
System (LGERS) Boards of Directors, under his leadership, voted to lower the
investment return assumption for the Fund from 7.25 percent to 7.20 percent
beginning with the December 31, 2016 valuations.
All of the reported performance figures are reported net of all
fees and expenses.
full reporting of all asset classes is available for download here.
The North Carolina Retirement Systems, the formal name for the
pension fund, is the tenth largest public pension fund in the country. It
provides retirement benefits and savings for more than 950,000 North
Carolinians, including teachers, state employees, firefighters, police officers
and other public workers. For more information, visit www.nctreasurer.com.