North Carolina State Treasurer Dale Folwell announced that Jeff Smith and Christopher Morris have been appointed as interim directors for the Investment Management Division within the Treasurer’s Office.
The division manages the investments for the North Carolina Retirement Systems, which at the end of the last fiscal year had total assets of $123.2 billion.
The state pension fund is the tenth largest public pension fund in the nation and provides retirement benefits and savings for more than 900,000 North Carolina state employees, teachers, and emergency service retirees.
Of the appointments Folwell said, “We are lucky to have Jeff, Chris and the rest of the Investment Division’s staff working to preserve and strengthen the state pension plan. They both bring decades of experience to the role and have the integrity, ability and passion to continue building value and reducing complexity in our investment portfolio.”
The two are replacing former Chief Investment Officer Kevin SigRist, who left last month.
Smith has been with the Treasurer’s Office for more than 25 years, most recently serving as Director of Fixed Income overseeing $47 billion in internally managed fixed income assets.
Morris has been with the state since 2005 and serves as Director of Risk Management and Asset Allocation and is responsible for the oversight and direction of the overall risk management program within the Investment Management Division.
In that capacity, he manages assets exceeding $100 billion.
The two assumed their new roles immediately, Folwell said, but they will still also maintain oversight of their respective roles in fixed income and risk management.
The Investment Management Division serves as the investment arm for the Department of State Treasurer and employs more than 20 investment professionals that provide expertise for state government investing.
Folwell has had the chance to announce several money-saving efforts for the state in recent weeks including renegotiating the state health plan premium to avoid a large rate increase and also the recent sale of state bond debt to save on debt service costs.
At the end of July Folwell held a press conference announcing the renegotiation of the contract between the State Health Plan and UnitedHealthcare, resulting in the stabilization of the premium rate for the state’s Medicare Advantage plan in 2018.
Folwell said that the rate for the basic plan was going to decrease to $120 a month for 2018, down from $120.65 a month in 2017.
While the figure remains essentially the same the state was able to avoid a possible 25 percent cost increase through the negotiation, and the figure includes a previously un-assessed fee.
The average national increase in premiums bought in an exchange or private market from 2017 to 2018 is 25 percent, Folwell said.
The renegotiated rate includes the assessment of the Health Insurance Providers Fee assessed as part of the Affordable Care Act, which was put on hold by Congress for 2017 last year.
The fee is charged to “each covered entity engaged in the business of providing health insurance” such as the state.
Folwell and representatives of State Employees Association of North Carolina and North Carolina Retired Governmental Employees Association have called on the North Carolina Congressional delegation to take the lead on extending the moratorium, or repealing the tax altogether, which would result in an additional savings for the state in 2018 of $45 million.
Nationwide the assessed costs for the fee are expected to top $14 billion.
Here in the state a continued moratorium or repeal of the fee could mean a further reduction of 30 percent for the state’s cost in 2018.
The state has also saved almost $100 million, so far, from the sale of its bond debt in two batch sales in July.
The first sale saved the state $15 million and the second an additional $83.55 million in debt service costs.
The state was able to get a better interest rate by selling the bonds at a reduced interest rate.
There will be one more bond sale this month.
Folwell said that the bonds were issued and sold to take advantage of lower interest rates, which will reduce the cost to taxpayers as the debt is repaid.
The first set of bonds were purchased by Citigroup Global Markets, Inc. at an interest rate of 1.39 percent, saving taxpayers $15 million in debt service costs and the second set of bonds sold went to Goldman Sachs at an interest rate of 2.27 percent, saving North Carolina taxpayers $83.55 million in debt service costs.