Treasurer Folwell Reports First Quarter Pension Fund Returns Fund Earned 4.1 Percent for 1st Quarter of 2017

​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 Folwell administration.

“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 historical gains.”

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 Folwell.

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.

A full reporting of all asset classes is available for download here.