Protecting Retirement
The Results
North Carolina’s pension is 95% funded (national average is 80%) and ranks as the 5th-best funded pension in the country (Pensions & Investments)
The National Institute for Retirement Systems held North Carolina and five other states up as national models for how to design and operate a pension system. (NIRS Report, June 2011)
In her first term, Treasurer Cowell established a new model for the Investment Advisory Committee and took the following steps to strengthen investment oversight and ensure a strong pension:
Proactively Established the Future of Retirement Study Commission
In her first year of office, Treasurer Cowell established the FORSC to evaluate retirement benefits for North Carolina state and local government employees.
Conducted a comprehensive one-year review of the Investment Management Division
In April 2010, Cowell released a 188-page review conducted by an outside consulting firm that recommended hiring an internal auditor along with more investment staff.
Suspended Bonuses for Pension Managers
In June 2009, Cowell announced that her office would not award bonuses to pension fund managers because of a tight state budget. “I will not defend paying out bonuses in a year like this,” said Cowell. “Treasurer Suspends Bonuses for Pension Managers” WRAL, June 1, 2009.
Expanded the Investment Advisory Committee from 5 to 7 Members
In 2009, through legislation, Cowell added members to the Investment Advisory Committee, increasing the financial expertise available for investment decisions.
She also established a new charter and code of ethics for the Committee to preserve integrity and maintain high ethical standards in conducting business.
Reduced Fees for Investment Managers
Cowell negotiated a reduction of investment fees, expected to result in savings of more than $2.4 million annually for the pension fund.
Criticized the General Assembly for Shortchanging the Retirement System in 2010, and Obtained Full Funding in 2011
Succeeded in Obtaining Full Funding of the Required Actuarial Cost of Pension Funds in 2011
The National Institute for Retirement Systems held North Carolina and five other states up as national models for how to design and operate a pension system. NIRS Report, June 2011
Protected the Pension Fund through Greater Diversification
Cowell sought and gained investment flexibility, allowing the plan to improve its risk and return profile while continuing to diversify assets, while the ability to manage global equity internally has the potential to provide cost savings.
“Cowell’s office said further diversification in the pension fund would not only balance the investment risks: it would prepare for years of inflation to come as the billions of federal dollars pumped into the economy to keep banks solvent and generate business activity threatens to eat away the values of some assets.” [Associated Press, “NC House broadens pension fund investment options,” May 29, 2009]
“The bill had the support of finance professions such as the N.C. Bankers Association and Neal Triplett, the president and CEO of DUMAC, which manages Duke University’s endowment.” [“Pension fund to get new options,” News & Observer, June 4, 2009]
Advocated for the Future of Retirement
Cowell accepted the report from the Future of Retirement Commission that included several recommendations including offering a 401(k) style option for teachers and setting the minimum age to receive full retirement benefits at 55.
Cowell convinced the General Assembly to create a new retirement plan to help attract and retain qualified teachers to serve in public schools across the state.
