Treasurer Folwell Reports Fourth Quarter Pension Fund Returns Fund Increased 6.3 Percent Over 12 Months, Fell 0.1 Percent for Quarter

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.