RALEIGH — The N.C. pension plan set a record $108.1 billion in estimated market value last week, per State Treasurer Dale Folwell.
According to a statement released by Folwell’s office, “the investment returns have shown sharp gains since the pension plan tumbled to an estimated $93.6 billion at the height of market volatility due to the COVID-19 pandemic and associated economic lockdowns in March.”
The statement additionally says that the current market value of North Carolina’s plan is more than $14.5 billion higher than the March figure and is $1.2 billion more than February 2020’s all-time high of $106.9 billion.
As the ninth-largest public pension fund in the country, the North Carolina Retirement System is currently valued at more than $107 billion. The system serves over 950,000 North Carolinians, including teachers, state employees, local governments, firefighters and police officers.
According to a report by Equable.org, pension plans may be negatively impacted by COVID-19 in two ways: The first is through financial losses keeping funds from earning their assumed rates of return and that will add unfunded liabilities; the other is the economic recession caused by lockdowns, which cause a reduction in tax revenue for state and local governments, putting pressure on their budgets while public health costs are increasing.
Equable is a bipartisan nonprofit organization, based in Long Island City, New York, that monitors public pensions and helps educate policymakers and taxpayers about retirement stability.
Moody’s Investors Service has estimated that U.S. Public Pension investment losses are climbing close to $1 trillion, but North Carolina’s retirement system has not suffered the same issues as other state plans. North Carolina is one of seven states with estimated funding ratios over 80%. North Carolina’s funded ratio stands at around 88%.
Over the calendar year, the pension plan has increased 4% in value and, despite market volatility, increased 6.38% for the 2nd Quarter. Nationally, the report by Equable says that the average investment return for statewide retirement plans was negative 0.44% as of June 30.