Fund Increased 6.3 Percent Over 12 Months, Fell 0.1 Percent for Quarter
RALEIGH, N.C. –State Treasurer Dale R. Folwell, CPA, today
reported state pension fund returns for the fourth quarter of 2016 ending
December 31, 2016. The fund, comprised of the retirement plans the Department
of State Treasurer manages, reported a loss of 0.1 percent for the quarter.
Pension fund assets were valued at $89.1 billion.
A downturn in investment grade fixed income for the fourth
quarter offset positive gains in public equity and all other asset classes
leading to slightly negative returns for the quarter. However, over the last 12
months, the fund gained 6.3 percent.
This report reflects the final earnings statement of former Treasurer
Janet Cowell’s administration.
“When I applied for this job, I told the people of North
Carolina that I am committed to preserving and protecting the state pension
fund,” said Treasurer Folwell. “Because
the North Carolina General Assembly has fully funded the plan, as well as
adding tens of millions of dollars over the last several years, the pension is
solid. However, these returns are another indication that the fund, on average,
has not achieved its 7.25 percent expected rate of return over the last 15
years. At the same time, fees paid to external managers exceeded $500 million
in the last fiscal year. In this low interest rate environment, being more
realistic about returns going forward will help North Carolina maintain its
‘AAA’ bond rating."
For calendar year 2016, public equity (stocks), which makes
up more than 40 percent of the total fund, gained 7.3 percent.
Inflation-sensitive investments rose 7.2 percent, multi-strategy was up 6.0
percent, opportunistic fixed income rose 7.1 percent, and private equity increased
by 6.0 percent. Investment grade fixed income (bonds), which is slightly more
than one quarter of the total fund, rose 3.2 percent.
All of the reported performance figures are reported net of
all fees and expenses.
A 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.