Treasurer Folwell announces NC's State Pension Plan hits a record $121 billion
NC Treasurer Dale Folwell in an exclusive interview with Neuse News announced the North Carolina State Pension Plan has hit a record $121 billion. It’s one of the largest pools of public money in the world and covers more than 950,000 members.
“Every state employee puts in 6% of their salary and the employer they work for puts in about 16% of the salary,” said Folwell. “This is a pension plan. The employee and the employer have to put in money.”
When the treasurer took office at the start of 2017, the pension plan was valued at $89.1 billion. This week reached an estimated value of $121 billion. That is $31.9 billion in growth during Folwell’s time in office.
“Not only is it one of the best-funded pension plans in the country but it’s also one of the most conservatively managed,” said Folwell. “We’ve focused on cutting wall street fees. When I was sworn in, the plan was paying more than 700 million a year in wall street fees. We’ve been able to cut over 350 million in wall street fees.”
People are living longer, and an increasing number of public servants are receiving more checks in retirement than they did paychecks while working. Some researchers predict half of all people born today will live to be 100 and beyond.
“The concerns are not political or emotional they’re mathematical,” said Folwell. “Interest rates have never been this low, people have never lived this long, and people have never retired this early. Those are the three big drivers of a pension plan.”
That creates challenges to the plan because it wasn’t structured to account for that longer life expectancy. Further complicating the situation is the lack of minimum retirement age for pension plan members. The number of pension plan members paying into the system is now lower than the number of members who do not contribute financially to the plan because they have retired or are no longer working in government.
The Pew Charitable Trusts determined North Carolina was among the top tier pension plans well-positioned to weather an economic downturn, which proved true during the 2020 COVID pandemic.
