Imagine if the key goal on your performance report at work was this: “try hard.”
Yes, you read that right. Not accomplish anything in particular, just try. It seems outlandish, doesn’t it?
Yet this is the standard for Dale Folwell, the State Treasurer – and a former Winston-Salem/Forsyth County School Board Member. Folwell invests the roughly $118 billion pension fund for educators, civil servants, and first responders, and his most basic accountability is not for any outcome, just that he “try” to do well.
It’s a standard he’s failing by intentionally leaving at least $17 billion uninvested. He’s not even trying to earn a meaningful return on this money. Instead, he keeps lowering the bar for his own performance, most recently reducing the return objective from 7 percent to 6.5 percent.
Toward the very end of an August 25th, 2021 meeting of his Investment Advisory Committee, Folwell admitted how he expects the state to make up the money that he hasn’t earned. His thoughts are about raising the retirement age for educators, civil servants, and first responders, as well as demanding more from the state budget every year. This approach almost guarantees that local governments will have to increase local taxes. Simply look up the recording of the August Investment Advisory Committee. It is a little over two hours long,
Remember that Folwell is aligned with political powers in Raleigh who are not only sitting on billions in surplus money, but are pushing to abolish corporate taxes. To suggest that getting more money from local governments while lowering what corporations would pay in taxes is literally telling each citizen in North Carolina who most likely is a non-pension member that he will be paying more taxes.
For anyone who struggles to imagine an NC GOP stalwart with a spending appetite, Folwell put part of this in writing within a technical report earlier this year. He told state and local governments to expect a $500 million bill every year starting in 2022-23 to cover his decision to lower the bar for investment performance.
Raising the retirement age on state employees like me, a Forsyth County educator, is another form of tax increase, one in which we have to work longer and contribute more out of our own paychecks to earn the same monthly benefit. And, again, it’s for no reason – Folwell is neglecting his end of the deal.
Angie Scioli, a retired Wake County educator, put that question to Folwell during the public comment section of that same August meeting (at about 1:38:06). The state treasurer benefits from the service of professional, nonpolitical investment staff, and she asked whether these experts had recommended that he pull all of this money out of the market. Folwell gave her no direct answer.
Scioli did not stop there, though. Folwell’s first priority investing my pension – and that of roughly a million additional North Carolinians – is saving money on fees paid to external money managers. Scioli’s last question in her remarks was how much of his total fee savings comes from not investing our retirement savings, as opposed to getting a better deal on investments.
This question should have an easy answer: zero. No fees are required on no investments, but no investment return is no good. That return is what finances the pension for our educators, civil servants, and first responders. Giving away a competitive investment return to just save fees ought to embarrass any fiscal conservative.
Again, Folwell offered no direct response.
He actually did not answer any of Scioli’s questions. And he did not offer any other reason why he’s not even “trying hard” to earn a return on $17 billion of our retirement savings. Few people could be given the goal merely of “trying hard” and still fail. Folwell apparently is one of them.
Educators like me don’t have (and don’t want) that luxury. We are accountable to the schoolchildren of North Carolina every day for their futures. It is an accountability that we take that seriously and, in return, we don’t ask to get rich. More than anything, we ask that our leaders support us fully.
Raising our retirement age for nothing is the very opposite. Folwell can either make things right now, get our money back into the market, and perform, or he can learn the hard way how much fight we have in us.