Investment rate cut is the third made by the state in the past four years.
The $116 billion North Carolina Retirement Systems has lowered its assumed rate of investment return for the third time in four years, cutting it by 50 basis points (bps) to 6.5% from 7% annually.
The target return had already been reduced to 7.2% from 7.25% in 2017 and again in 2018 to 7%. Prior to then, the rates had been left unchanged for nearly six decades even though the two main state pension funds the Teachers’ and State Employees’ Retirement System and the Local Government Employees’ Retirement System have, on average, underperformed their assumed rates of return over the past 20 years. In fact, the new target rate of 6.5% is still higher than the fund’s estimated 20-year return of 6.28%.
DBusiness Magazine
Steven Gibson // Photo courtesy of Rehmann
The National Association of Plan Advisors (NAPA) named Troy-based Rehmannâs Steven Gibson among the Top 100 Young Retirement Plan Advisors.
âSteven serves all his clients with integrity, creating strategies that help them meet or exceed their financial goals,â says Ryan Sullivan, managing director of wealth management at Rehmann. âIn addition to tremendous client work, Steven lends his creative thinking to the work we do across Rehmann and in the local community.â
Since joining Rehmann as a principal in 2020, Gibsonâs service areas include investment analysis and portfolio design, fiduciary due diligence support, retirement plan consulting, plan participant education and communication, plan design, and implementation.
Investment earnings generate 71 of public pension revenue opalesque.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from opalesque.com Daily Mail and Mail on Sunday newspapers.
State and local pension funds with ‘infinite’ amortization periods increased 50% from last year.
While the majority of the 99 state and local pension funds reporting to the Texas Pension Review Board (PRB) have held their ground during the pandemic, there was a sharp rise in the number of troubled funds from last year, according a report from the Texas Association of Public Employee Retirement Systems (TexPERS).
The PRB, which oversees all public retirement systems in the state, considers any pension fund with an amortization period of 25 years or less to be healthy and those with amortization periods of 40 years or more to be less healthy. And the most troubled, or least healthy, funds have so-called “infinite” amortization periods, which means they will never have enough money to pay the current and future benefits they owe. The PRB defines the amortization period as the length of time needed to pay for the unfunded actuarial accrued liability.