RALEIGH – State Treasurer Dale R. Folwell, CPA, announced today that the North Carolina Retirement Systems have reached a new milestone with the total number of retirees and other beneficiaries exceeding 300,000 individuals receiving benefit-payments totaling almost $500,000,000 for the month of February.
The Department of State Treasurer administers the statutory retirement and benefit plans of the NC Retirement Systems, supporting more than 950,000 current and former public employees in North Carolina.
With a pension fund valued at just under $90 billion, the North Carolina pension system is the 12th largest public pension fund in the country. Ninety-five percent of retirement-benefit recipients live within the state, meaning their pension dollars are reintroduced into the state’s economy, strengthening local communities. In 2014, pension dollars generated a $3.6 billion direct impact in goods and services purchased by retirees and other beneficiaries from businesses across the state.
“The Department of State Treasurer touches the lives of so many North Carolinians,” said Treasurer Folwell. “One in ten people in this state are impacted in some way every month by this department. That’s why it is so important that we preserve and strengthen the state’s pension and health care plans.”
While North Carolina remains one of the best-funded public pensions in the nation, the plan has not met its projected rate-of-return of 7.25%, on average, over the last 15 years. At the same time, fees paid to external managers exceeded $500 million in the last fiscal year.
“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 plan is on a solid footing,” said Folwell. “However, because the projected rate-of-return has not been met and, at the same time, fees paid to external managers have increased by more than 1000 percent. Fees for just last year will exceed $600 million.”
Folwell adds that the pension liability, when combined with the unfunded long-term liabilities of the State Health Plan, exceeds $38 billion. He notes that new accounting standards could add an additional $3 billion to that liability this year.
“The financial strength of the state presents us with a unique opportunity to lead the nation in addressing these liabilities,” said Folwell. “It is not only about what we need to do today, but about the future. We have the opportunity to make a generational difference for North Carolinians.”
The North Carolina Retirement Systems, the formal name for the pension fund, is the 12th largest public pension fund in the country and is currently valued at almost $90 billion. It provides retirement benefits and savings for more than 950,000 North Carolinians, including teachers, state employees, local governments, firefighters, police officers and other public workers. For more information, visit www.nctreasurer.com.