State Treasurer Janet Cowell announced Thursday the creation of an independent, bipartisan commission to review the state’s governance structure for investment management.
The commission, which is expected to makes its recommendations to Cowell and the General Assembly by April 30, will look the state’s current sole investment trustee structure and whether it should be replaced with an investment advisory committee model.
North Carolina is currently one of just four states with a sole fiduciary – the state treasurer – who makes all investment decisions in consultation with staff.
I’ve written before on the political pitfalls that are invited when one person wields so much decision-making power over such a large pot of money.
Of course, the best state pension reform option would be to transition from the current defined-benefit structure in which taxpayers are on the hook for rapidly growing unfunded liabilities, to a 401(k) style defined-contribution plan in which the workers own and control their own retirement funds. This would effectively take the politics – and all the potential corruption that comes with it – out of the pension system.