Candidate Answers:
1) What are your top priorities if you are elected?
My top priorities are to improve the performance of the state pension plan so that we will be able to provide COLAs for our retirees, help manage the transition from Blue Cross to Aetna as the administrator of the State Health Plan, work with hospitals, healthcare providers, and pharmaceutical companies to reach an agreement on prices so that we can expand benefits without raising premiums, and de-politicize the Local Government Commission so our local governments are able to make the investments their communities want and need. Additionally, new hires need to have health insurance when they retire. I will work with legislative leaders so that we can do what we have to so that any state employee can have great healthcare benefits their entire career and when they retire.
2) What do you intend to do to make possible a COLA or bonus for members of TSERS and LGERS on a regular basis?
We have to have a better performing pension fund. The solution luckily is not that difficult, we just have to invest more of our pension fund along the lines that other pension funds do. Our pension fund has a cash balance of around 13% where most others around the county have that number around 2%. With a total fund over $100 Billion dollars, that is over $10 billion dollars that could be invested that in a decent year would yield an extra billion dollars in returns that could be either reinvested or go towards a regular COLA. Additionally, we have to get serious about recruitment and retention. With nearly a 25% vacancy rate across state employment, those are positions that if filled would be paying into the retirement system, helping to make it more solvent, sustainable, and able to provide COLAs from the attentional returns that could be achieved. We need younger folks to join state employment and work their entire careers buying into the system so that our current retirees can benefit, but also the new hires. As the only candidate in this race with state government and legislative experience, I will use my relationships with legislative leaders to find a solution so we can increase pay and benefits to attract more people to join the state government so we can achieve these goals.
3) What will you do to make the TSERS and LGERS pension plans more sustainable?
Almost exactly the same as the previous question. We need to boost the returns on the pension plan by investing a good portion of our cash that is sitting in the fund losing value, and we need to have a concerted effort to increase recruitment and retention in state employment so that we get younger people to buy into the system and current employees to stay in the system. Additionally, I’d like to work with legislative leaders to try to get a larger contribution from the General Assembly to help bolster the plan’s solvency and sustainability. Finally, we have to do whatever we can to prevent situations like what is arising from UNC and ECU Health, where groups choose to leave the Pension Plan for their own system. This sets a dangerous precedent that makes the entire system unstable, and given that the largest employer in 61 of our 100 counties is a state government agency, we need everyone who is impacted by this to hold their elected officials accountable to reverse this statute that allows this from UNC and ECU Health and prevent it in the future.
4) How would you ensure employee and employer contribution rates are maintained at a level to effectively attract and retain the public service workforce in a way that strengthens the pension system?
We have to provide political pressure to ensure that the pension system is as strong as possible. We all benefit from having our public sector employees have a great retirement, because that attracts the best folks which mean we have a better government that works for all of us. Public sector employees are the largest employee group in 61 of our 100 counties, so it also improves our economy if they are all able to have a certain and comfortable retirement. If we do not invest in our public employees, we all suffer, and that gives us an ability to hold our legislative elected officials accountable so that people will demand we increase pay, increase benefits, and invest more in our pension system so that we recruit and retain the best so we all can have the government we need and deserve. My experience in the legislature has taught me that a vast majority of legislators feel this way, on both sides of the aisle. We just need leadership to focus our energy, so that Legislators know what’s at stake, and we invest more on the front end, thus improving the entire system. Finally, as mentioned before, if we improve the investment performance of the pension fund, by not keeping such a large portion of the fund in cash, that will be able to alleviate some of the difficulties and create a system that is much stronger and able to fully fund all our liabilities.
5) What would you do to ensure investment returns benchmark strongly with peer group pension systems?
We need to make sure we are investing our fund at a reasonable level that is similar to our peer pension systems. Currently we have a pension fund that has the largest holding of cash in the country which is preventing our ability to gain the returns we need to keep pace with not only the market, but other systems. In Fiscal Year 2023, the S&P had a return of a bit over 11% where our pension fund had a return of 5.3%. We cannot allow our fund to lag that far behind the market. By investing more of our cash to make us more in line with other systems we can improve that performance drastically. Additionally, we need to take the politicization out of investing. Instead of addressing our poor returns, our current Treasurer issued press release after press release criticizing CEOs for “woke investing” and other political buzz words instead of focusing on getting the returns our retirees need. We need to invest more of our fund, and focus on a true diversified portfolio that reflects our values as a state and get the returns our retirees need to provide them with the retirement they deserve and were promised.
6) Describe your understanding of the long-term costs of removing UNC and ECU Health Care employees from the State Retirement System.
My understanding of removing UNC and ECU Health Care employees is that it would be a critical blow to the State Retirement System and set a dangerous precedent. To begin with, allowing select employees to withdraw from the system, though it takes away some future liabilities that the system no longer needs to fund, also removes a considerable amount of investment funds that could have been used to bolster the entire system. This also places market risk solely on the UNC and ECU health employees who choose this path. But most importantly, it sets a dangerous precedent that other groups in the State Retirement System are allowed to follow similar paths. Additionally, it could threaten the preferred tax status of the entire pension plan and the solvency of the system as a whole, as laid out in the letter from the Executive Director of the Retirement Systems Division Thomas Causey to the heads of UNC and ECU, dated Oct. 11, 2023 . For the retirement system to work, we need current employees to continue to pay into the system to generate returns, and finance current retirees. Having groups leave the plan drastically hinders the ability of the plan to fulfill the current liabilities of the system which could speed up the process of other groups wanting to leave. During the short session this year, we have to work together to find a solution to this, because if we do not, it’ll make it increasingly difficult to make the current system that so many retirees and current employees depend on.
7) Do you support repeal of the 2023 budget provision removing UNC and ECU Health Care employees from the State Retirement System?
Yes, as stated above it would be a critical blow to the State Retirement System and set a dangerous precedent. We need to make the pension stronger to remove the incentive for groups to want to leave the plan to the detriment of others.
8) Will you pledge to oppose the removal of more employees from the State Retirement System?
Yes. The system only works if we all buy in. And if we all buy in we all benefit. We cannot allow the retirement system to be sabotaged from the inside. We need to fulfill our promises to our public employees and retirees, and make the current system stronger, not break it down brick by brick.