Local Politics

Cowell: State pension funds begin to stabilize

Posted August 5, 2009 11:05 a.m. EDT
Updated August 5, 2009 11:39 a.m. EDT

— State Treasurer Janet Cowell said Wednesday that North Carolina's public pension funds lost about $12 billion during the 2008-09 fiscal year but noted that the funds started bouncing back in recent months.

The funds lost 14.2 percent during the 12-month period but were up 8.6 percent in the most recent quarter, she said.

The losses left the pension funds, which support more than 820,000 retired state workers and teachers, with assets of $60.2 billion at the end of June, she said. They reached a low of $54.6 billion in March, she said.

“This decline was anticipated by our investment experts,” Cowell said in a statement. “We appreciate the state legislature recently granting us additional flexibility so we can better navigate these downturns and position ourselves for strong returns when markets improve.”

Cowell has urged lawmakers repeatedly in recent months to boost funding for the pension system to make up for market losses and years of small state contributions.

North Carolina's pension funds performed better than the Standard & Poor's stock index, which lost 28.2 percent during the 12-month period ended in June. California's pension system, one of the largest public funds in the U.S., lost 23.4 percent during the fiscal year.

Cowell said North Carolina's conservative investments helped protect it from heavy losses in the stock market. Forty-two percent of the pension funds is in bonds, which gained 7.6 percent during the year. That offset some of the the 27.7 percent loss on the funds' stock portfolio, which accounts for 47 percent of the funds' holdings.