RALEIGH, N.C. (AP) - A panel selected by state Treasurer Janet Cowell recommended Thursday that an appointed board of trustees take over investment decisions for the state’s $86 billion pension system for teachers and state workers rather than keeping it in the treasurer’s hands alone.
North Carolina is one of just four states where the state treasurer is solely responsible for how pension funds are invested. But a divided panel named by Cowell earlier this year voted to recommend that the General Assembly change that long-held practice in favor of a board of trustees whose members boast investment experience.
“Although the model has worked well to date here in North Carolina,” said Michael Kennedy, the panel’s chairman, “my primary concern is that job is becoming a lot more complex and investments in a general sense are becoming a lot more complex.”
“You reach a point in time where the job of the treasurer becomes so overwhelming and potentially unwieldy that something could fall through the crack,” said Kennedy, who works in Atlanta for an executive search firm and formerly served on the board of trustees for Georgia’s employee pension fund.
Four members, including state legislators from both major political parties, of Cowell’s 11-member commission dissented. They said changing administration of a pension fund that repeatedly produced among the best investment returns in the country would be a bad idea because once a group is making decisions, no individual is accountable for bad choices. Creating a trustees board filled with political appointees is no substitute for beefing up the professional staff that already advises state treasurers.
“Under our current system, one supported by the unique history and culture of our state, the buck stops at one desk,” wrote the dissidents, who included Sen. Ralph Hise, R-Mitchell, and Rep. Rick Glazier, D-Cumberland. “No one can doubt who is accountable. A board, of course, is fundamentally designed to dilute that singular accountability.”
The State Employees Association of North Carolina, the union representing state workers, has long wanted an investment board to manage the money.
Cowell will review her panel’s recommendations and propose any changes to lawmakers starting their annual legislative session next month.
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Emery Dalesio can be reached at https://twitter.com/emerydalesio
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