Thursday, May 3, 2018

Treasurer Folwell Reports First Quarter Pension Fund Returns Fund Earned .2 Percent for 1st Quarter of 2018

May 3, 2018


Contact: Frank Lester (919) 814-3811


Treasurer Folwell Reports First Quarter Pension Fund Returns

Fund Earned .2 Percent for 1st Quarter of 2018

(Raleigh, N.C.) –State Treasurer Dale R. Folwell, CPA reported that state pension fund returns for the first quarter of 2018 were flat amid volatility in the stock market. The nearly $100 billion fund, known as the North Carolina Retirement Systems, is managed by the N.C. Department of State Treasurer.

“Our investment team has done a great job during a difficult first quarter," said Treasurer Folwell. “However, the fact remains that we spent more than $1.5 billion gross in benefits payments while producing little in investment gains. Those types of outflows without earnings are unsustainable in the long term."

For the three months ending March 31st, the pension returned .2 percent. The following first quarter 2018 returns are reported net of all fees and expenses:

• Public equity, which makes up nearly 40 percent of the total fund, was flat at 0 percent

• Private equity rose 4.3 percent

• Non-Core Real Estate and Opportunistic Fixed Income gained 5.6 percent and 2.4 percent respectively

• The multi-strategy portfolio returned -.7 percent for the three-month period

• Inflation-sensitive and diversifier investments increased by 1.8 percent

• Investment-Grade Fixed Income was down - 1.7 percent

While the North Carolina pension plan is one of the top five best funded in the country, Treasurer Folwell is making reforms to maximize its long-term sustainability. The Boards of Trustees for the Teachers' and State Employees' Retirement Systems (TSERS) and the Local Governmental Employees' Retirement Systems (LGERS) recently lowered the plan's assumed rate of return from 7.2 percent to 7.0 percent. The lower rate allows for more realistic assumptions about the plan's ability to achieve expected returns in the future.

“Despite strong returns in 2017, the pension plan hasn't met its assumed rate of return on average for twenty years," said Folwell. “We owe it to the General Assembly, taxpayers, public employees and future generations to be transparent and realistic about the true valuation of the pension plans." 

Treasurer Folwell and the investment management team continued to reduce costs significantly during the first quarter of 2018 to provide more value to members of the pension plan. Fees paid to Wall Street investment managers have been cut by $76 million since January 2017, for a projected savings of more than $300 million over four years. That figure is three times Folwell's original pledge to cut fees.

Click here for a full listing of asset classes.

The North Carolina Retirement Systems provides retirement benefits and savings for more than 900,000 members, including teachers, firefighters, police officers, state and local government employees and other public workers. For more information, visit .