(The Center Square) – In the first six months of this fiscal year, the North Carolina state pension plan investments made $8 billion and outperformed the stock market, the state’s treasurer said Tuesday.
“That number is we think the largest profit in the six-month history of our state pension system,” first-term Republican Brad Briner said at a meeting of state leaders. “But moreover, it is $2.5 billion more than we expected.”
North Carolina’s $127 billion pension plan has “underperformed for years,” according to Briner.
The plan has been running a $16 billion annual deficit based on the gains it needed to sustain pension payments without raising state contributions to the plan, Briner said.
Gains in the pension plan investments can reduce the need to increase the state contribution which has grown from zero 25 years ago to the current 17% of employee salary, Briner said.
“We can’t keep letting it go up.” Briner said told other state leaders Tuesday.
The North Carolina Retirement System serves more than 1 million people, from teachers to state employees, local governments, firefighters, police officers and other public workers. It operates at a deficit similar to Social Security, with fewer people paying in than are eligible for benefits.
Estimated market value was $89 billion when former Treasurer Dale Folwell took office in January 2017 and $127 billion on Dec. 27, 2024, in his final days of office.
This fall, the treasurer’s office will conduct studies to determine how to possibly reduce the employer match.
“All of that is getting to what we can do on the employer match side to relieve some of the pressure on our agencies and on the state budget,” the treasurer said.
Also, the Legislature this year passed and the governor signed the Investment Modernization Act which according to Briner “fundamentally” changes the way the state manages pension fund investments.
It creates a five-member North Carolina Investment Authority, chaired by the treasurer, which includes financial professionals appointed by the governor, treasure and leaders of the legislature.
The state has been one of only three in the country to give one person – the treasurer- sole power for administering pension plan investments, Briner said.
