Raleigh, N.C. — State Treasurer Janet Cowell on Monday asked legislative leaders to pass a handful of reforms to upgrade oversight of North Carolina's $86 billion public pension fund.
The governance of the pension fund hasn't changed since 1979, while investments have become more complex in recent years, Cowell said in a letter to House Speaker Thom Tillis and Senate President Pro Tem Phil Berger.
The following changes were backed by the North Carolina Investment Fiduciary Governance Commission, an 11-member panel Cowell set up in January to review pension fund operations:
- Requiring financial statements to be audited by a commercial independent third-party firm, in addition to state audits.
- Mandating an independent performance review of the state's investment practices every four years, a practice Cowell initiated in 2009.
- Expanding and modernizing reporting for each external investment and clarifying how they are subject to public records laws.
- Providing additional flexibility, including greater ability to determine the size of the state's investment staff.
“North Carolina has one of the strongest pension funds in the country, and the reforms I am proposing today will ensure it continues to serve retirees well into the future,” Cowell said in a statement. “The commission had several unanimous recommendations that, when enacted into law, will codify many of my previous policy changes and be a significant step forward for the governance of our retirement investments.”
One measure long called for by the State Employees Association of North Carolina – shifting control of the pension from Cowell's hands to a board of trustees – will likely have to wait until at least 2015. Cowell said the commission was split on that idea.
SEANC said its review of the pension fund shows Cowell is paying huge fees to fund managers that aren't reflecting in the pension's annual reports.