MFA Blog

Bill in North Carolina Legislature Could Double State Pension’s Alternatives Allocation

Posted on May 2, 2013

A bill now in the state Legislature of North Carolina could double the allocation to alternatives, to 40%, if it is approved.  Janet Cowell, state Treasurer of North Carolina, supports the bill and is the sole trustee of the public pension.

North Carolina Retirement Systems, the $78.1 billion pension fund for the state, is seeking to shift allocations to alternatives to reach its 7.25% long-term assumed rate of return.  Cowell said the pension needs to shift more assets from equities and fixed income.  Noting predictions of a decade of poor returns, Cowell said at the Milken Institute Global Conference, “We can’t hedge out 10 years of slow growth.”

Cowell also said that she aims to cut the $18 million in fees the pension pays to fund of funds.  She hopes to expand investment staff and move to more direct investments with alternatives.

Learn more about this story online from Pensions & Investments.