North Carolina Pension Fund: A Success Story

North Carolina hosts the financial capital of the South. With sprawling beaches and vast mountain ranges spanning the two borders, few would doubt that North Carolina is one of the most naturally picturesque places in the United States. The Tar Heel State also boasts something else that puts the mind in a tranquil place- the third strongest pension plan in the United States. At a little over 93 per cent funded, the North Carolina Retirement Systems Pension Fund services 875,000 North Carolinians including firemen, policemen, and first responders.

Investments contained in the NC Retirement Systems account are well diversified, with assets spread through equity, fixed income and alternative investments. Equity takes nearly half of all investments, accounting for over forty per cent of the fund’s holdings. Fixed income clocks in at a close second with 37 per cent and then alternatives at 20 per cent. This spread of holdings creates a stable return rate for the fund while also mitigating risk, therefore ensuring a stable retirement for hundreds of thousands of NC residents. Thanks to this strategy the fund was able to attain a 13.5 per cent over all return in 2017- with a 24.4 per cent return from public equity holdings that make up over 40 per cent of the account.

With the median rate of funding for state pensions sitting at 68.4 per cent, there is no doubt that the 93 per cent rate boasted by the North Carolina retirement systems plan is nothing short of extraordinary. For a state with a median income that is 7,000 lower than the national average, one may ask how the NC Retirement Systems account has been able to find such solid ground in its investment holdings? The answer is simple. The North Carolina retirement systems account prides itself on adherence to fiduciary responsibility and to the health of the account. There are no political games played with the retirement accounts of North Carolinians; a fact that is supported by the overwhelming success of the retirement system’s pension account.