5
and sustaining it for the next generation of public service
workers.
-
bution plan. There are other, better ways to make our
pension plan even stronger than it is now. I would like
to create enough funding to do a small employer match
to the 401/403/457 plans to increase the participation
levels of state employees.
I have never thought of increasing employee contribution
rates and have been advocating/receiving massive
employer contribution rates for the last three years.
Fully funding the pension plan does not just help
retired governmental employees. It also helps us maintain
the state’s coveted triple AAA bond rating.
Ronnie Chatterji: I will use my expertise as an economist
to estimate the impact of COVID-19 on the North Carolina
Retirement Systems. Once we understand the extent of
the damage, we need to be innovative in crafting solu-
contribution plan. Our state employees and retirees have
worked too hard for our leaders to break this promise to
them. I will also not undertake steps that put disproportionate
burdens on our state employees and retirees, who
are not responsible for this economic downturn or the
inadequate response from Washington D.C.
People as a Priority
What steps are you willing to take to insure not only that
local and state government retirees can receive regular cost
of living adjustments, but atone for nearly 18 percent in lost
pension value since 2008?
Dale Folwell: The Treasurer is not able to make COLA
recommendations absent statutory investment gains. The
plan has not earned its assumed rate of return on average
in 22 years. This isn’t political, it’s mathematical.
This is the reason for the lack of COLAs. Any answer
to the contrary is emotional pandering to those that teach,
protect or otherwise serve our state and communities.
to the plan’s investment portfolio making gains beyond
assumed returns, any COLA will have to come from an act
of the General Assembly which provides funding for it.
Ronnie Chatterji: We need a fresh start at the Department
of State Treasurer to make up these losses. We lack
following a coherent investment policy. Without the right
team and the right strategy, our pension fund will not live
up to the promise we make to our retirees and current
employees.
and set an investment strategy that is aligned with international
best practices. That is what North Carolina’s
employees and retirees deserve. Once in place, we can
create the value to make up the billions of dollars in lost
value over the previous few years and provide the COLAs
that our retirees deserve. In the next response, I discuss
I will also set an example by providing the employees of
the Department of State Treasurer paid family leave. I hope
this will inspire our General Assembly to take up this issue
isn’t a slogan. The State Treasurer has the power to deliver
Relief for Local Retirees
North Carolina has assumed a 7 percent return on investments
for many years, and this goal has rarely been met,
resulting in the pension fund declining from 111 percent
capitalized to about 90 percent, over the last 19 years. How
will you reverse this trend?
Dale Folwell: It is commonly known that this plan is
facing tremendous headwinds. The plan has spent the
last 20 years trying to recover from the economic fallout
of 9/11 and the Great Recession. The plan was never
higher Wall St. fees and longer life expectancies.
Of course, we are glad people are living longer and
feel they can retire at a younger age, even if that creates
a challenge for us. We are taking every lawful and ethical
step to preserve the value of your pensions against the
effects of investment fees; as I previously mentioned, we
have eliminated $350 million of such fees that would have
otherwise gone to someone other than our retirees. An
increase in interest rates will require that the national
economy be stronger, but we are always vigilant in looking
for risk-minimal investment opportunities that can
increase the value of our pension fund.
What I am not willing to do is take any steps that vio-
this or the next generation of public service workers.
Local government retirees have only seen a less than 1
percent adjustment in the past decade. What have or will
you do to provide relief for local government retirees? How
do you propose to have local and state government retirees
retain pension value equitably?
Ronnie Chatterji: I will be a strong advocate for cost of
living adjustments to our General Assembly. It has been
too long since our retirees have received a COLA and I
believe that a strong ally in the Department of State Treasurer
can make a difference. I plan to make my case using
data from other states and evidence on the impact that a
cost of living increase could have on our state economy. I
plan to make this presentation to not only our legislators,
but to leaders all across the state to create strong support
for this step. We need evidence, energy and engagement
to get this done for our retirees.