A recent American Legislative Exchange Council (ALEC) report named North Carolina’s retirement plans among the top four state-administered public pension plans for the year in terms of transparency.
ALEC recognized the state, along with Kentucky, Nebraska and Montana, for transparency in the administration and reporting on the ongoing status of the North Carolina Total Retirement Plans. The report, Unaffordable and Unaccountable 2017, highlights the importance of transparency in public pension plans, noting that transparency in financial reporting enables the public to access the information needed to make informed decisions.
Of the report State Treasurer Dale Folwell said, “I’m proud of the work our team is doing to ensure the health and integrity of the funds we’re responsible for managing. Part of that good work is being open and transparent about what we’re doing to keep the pension promise made by our state to the public servants in North Carolina.”
The report said that North Carolina and its companions provide examples for every pension system to emulate in order to improve transparency.
On the other end of the spectrum was Louisiana and Georgia, which fail to provide financial reports in an acceptable manner, as judged by ALEC.
In reference to North Carolina the report stated, “the strength of their pension reporting comes from the location, ease-of-access to the documents, along with the informational organization. Unlike most states, which make pension fund financial documents available only through the pension organization itself (often distinct from any governmental agency), all pension fund financials are easily available from North Carolina’s Department of State Treasurer.”
The report wasn’t all good news for the state though as the state fell from 32nd to 33rd in terms of unfunded liabilities, increasing from $96.4 billion in the 2016 report to $111 billion in the 2017 report.
This change was not significant enough to push the state down in the rankings looking at unfunded liabilities per capita, where the state held the number five slot increasing from $9,606 per person in 2016 to $10,944 per capita in the most recent report.
The state however did lose ground in its funding ratio of the pension plan, dropping from 47.9 percent in 2016 to funding 45 percent of its plans in 2017.
This caused the state to drop from second in the nation to fifth.
While the state dropped three slots it is still just 3 percentage points behind second in the nation, South Dakota.
Wisconsin lead the nation again, funding 61.5 percent of its plan, though it did drop by nearly 2 percentage points from 2016.
The Department of State Treasurer’s Investment Management and Financial Operations divisions are responsible for managing more than $100 billion in pension and other funds.
The department produces dozens of reports each year that outline the investment fees and performance, as well as the financial health, of the state’s pension plans and
other investments. The department publishes each of these reports online to make them accessible to any interested parties.
The Department of State Treasurer manages the North Carolina Total Retirement Plans, which provide retirement benefits for more than 900,000 of North Carolina’s state and local government, law enforcement, judicial and legislative employees, as well as teachers and fire and rescue workers.