North Carolina State Treasurer Brad Briner is hopeful that recent changes made to how the North Carolina Retirement Systems’ (NCRS) makes investment decisions will bring benefits to retirees and the state budget at the same time.
On Wednesday, the North Carolina Investment Authority (NCIA) Board of Directors voted on those changes.
“These were the final steps in the construction of North Carolina’s newest state agency, the North Carolina Investment Authority,” Briner said in a press release. “We now have approved the Investment Policy Statement and the incentive compensation plan.”
The board approved a new strategic asset allocation, a long-term plan that sets a mix of investment asset classes and risk controls. According to the press release, it is supposed to add flexibility and include new performance benchmarks. The board also updated other components of the NCRS Investment Policy Statement, which lists investment guidelines and required processes.
The board also voted to establish a long-term strategy for investing assets of the Ancillary Governmental Participants Investment Program (AGPIP). Various government entities that are not part of the NCRS voluntarily participate in AGPIP or are directed by statute to be included in the program. There are 78 participating entities in AGPIP, and NCIA manages their investments in a fiduciary capacity. The types of investments under the program are limited by statute.
“NCIA’s sole purpose is to deliver superior, risk-adjusted investment returns on the over $200 billion of taxpayer, employee, and retiree assets we manage on behalf of all North Carolinians,” the treasurer continued. “These two important actions will allow the team to do just that. If the team increases historical returns by just 1% a year, the state will soon be able to increase retiree payouts through COLAs while at the same time reducing the annual pension contribution cost to the state budget.”
Briner said in June that the 1% increase in returns could add $2 billion to the state budget each year.
HB 506, 2025 State Investment Modernization Act, was signed into law, creating the NCIA, a new independent state agency that would have a board of directors instead of a sole fiduciary model with the treasurer overseeing the state’s $139 billion pension fund, along with other public funds dedicated to retirement, education, and transportation.
A report highlighting investment performance and recent investment transactions was also presented during the meeting.
NCIA had $208.23 billion in assets under management as of Dec. 31, 2025, including $141.5 billion in the state pension plan.
Ortec Finance, a risk management consultant, presented findings from its stress tests indicating that the NCRS fund, under its new strategic asset allocation, should show healthy growth leading to full funding. The study found that the pension fund is “very strong” and should perform at or better than a peer-group average portfolio, with manageable future risks.
Board members also voted to approve an incentive compensation plan for NCIA staff. The vote was based on a recommendation from Mercer, a global workforce strategy and human resources consulting group. Awards under the approved plan are contingent on significantly exceeding the 6.5% return assumption and meeting other requirements.
