RALEIGH, N.C. (WRAL)— Nearly 1 million state employees count on North Carolina’s $96 billion pension fund for their retirements. But paying state retirees what they’re owed means facing the long-term challenges of keeping the fund solvent.
State Treasurer Dale Folwell, whose agency manages the fund, has followed through on his campaign promise to slash millions in outside management fees. His decision to cash out and transfer funds to low-earning, short-term accounts, however, drew heat from some pension observers.
“Some of the critics of what we’ve done this year are the very people who’ve put us in some of these investments,” Folwell said.
CPA and financial advisor Ron Elmer, a former Democratic candidate for treasurer, said he actually supports the Republican’s fee-cutting mission.
“I liked what he was doing. I liked what he was trying to do,” Elmer said. “Could that have been done a little more efficiently? Probably.”
Elmer and others argue parking transfer funds in a savings account, while safe, cost the pension serious earnings as the market rose.
“Tens of millions at least,” Elmer said.
With aging retirees, a mounting problemStill, Elmer said he appreciates the mounting challenge Folwell faces.
The North Carolina pension is commonly branded one of the best funded in the country. But it still must pay out $500 million a month – $6 billion a year.
“It’s one of those things you can’t really brag about, because it’s basically saying the fire in my house is smaller than yours,” Elmer said.
State government and employees only pay in about half what the fund pays out, so investment earnings are crucial.
In the mid 1970s, about 250 people drawing state pensions were aged 90 and above. Today, there are close to 7,000. On the other end of the spectrum, there’s no minimum retirement age.
The latest statistics as of December 2016 show nearly 100,000 pensioners are under 65. That accounts for nearly one-third of state retirees who earn pension checks.
“Fees have gone up, payouts have gone up, life expectancy has gone up and interest rates have gone down,” Folwell said. “That’s what I inherited.”
Folwell also inherited and managed a fund that performed at 10.8 percent in the last fiscal year, nearly 2 percentage points less than the national public pension average. He’s also handcuffed by $10 billion in contracts that managers haven’t even invested yet.
Raise the age?
In addition to trimming the more than $600 million in outside annual fees, some feel it’s time to consider raising the retirement age.
“As age goes up, the working life should go up as well, I would think,” Elmer said.
Ardis Watkins, director of government relations for the State Employees Association of North Carolina, isn’t so sure. She said public workers sacrificed enough – while outside money managers cashed in.
“It might sound good. It might even be well intentioned, but it’s not going to solve any problems,” Watkins said. “The only thing that solves problems is to stop giving huge amounts of money away in multiple levels of fees to investment managers.”
That’s Folwell’s philosophy. But he says his ongoing challenge is bigger.
“At the end of the day, our job is to preserve, strengthen and sustain the state pension plan as keepers of the public purse,” Folwell said.
Voters are casting away
As of 2 p.m., 4,169 people in Onslow County have voted.
The only Democratic ballot with the highest voter turnout is in Richlands with 380 ballots cast so far. Four other precincts with a Democratic race are Catherine Lake (147), Gum Branch (221), Haws Run (138), and Nine Mile (122).
New River precinct has only seen eight voters so far-because they have Democratic ballots.
Precincts with just Republican ballots have reached higher number than those with ballots for two political parties.
Northwoods is in 2nd with the highest turnout of voters (273), followed by Brynn Marr and East Northwoods, both of which have seen (249) voters.
Vote Count For Each Precinct:
- Bear Creek: 241
- Brynn Marr: 249
- Catherine Lake: 147
- Cross Roads: 225
- East Northwoods: 249
- Folkstone: 166
- Gum Branch: 221
- Half Moon: 172
- Haws Run: 138
- Holly Ridge: 86
- Hubert: 155
- Jacksonville: 81
- Mills: 62
- Morton’s: 100
- New River: 8
- Nine Mile: 122
- Northeast A: 83
- Northeast B: 193
- Richlands: 380
- Snead’s Ferry: 223
- Swansboro: 314
- Tar Landing: 169
- Verona: 112
- West Northwoods: 273
Voters to choose party nominees in Primary Election Day
North Carolina voters are choosing their parties’ nominees in dozens of legislative and congressional primary races congested with contestants.
More than 35 current General Assembly members and eight congressional incumbents are trying to advance through Tuesday’s primary elections.
Sitting members of Congress seeking re-election include House Freedom Caucus Chairman Mark Meadows and Rep. Patrick McHenry, the chief deputy whip in the House. The most threatened GOP incumbents may be Reps. Robert Pittenger of Charlotte and Walter Jones of Farmville.
A little over 4 percent of the state’s 6.9 million registered voters cast ballots before Tuesday through early in-person or traditional absentee voting. Some registrants had no primaries in which to vote because there are no statewide races on Tuesday’s ballot.
You can find voter information including your registered polling precinct and a sample ballot for your area at the North Carolina State Board of Elections & Ethics Enforcement website. The polls are open from 6:30am-7:30 pm.
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