NC Treasurer Brad Briner talks to legislators Tuesday, Oct. 7, 2025. (Photo: NCGA screenshot)
Year after year, retired state workers hope the North Carolina legislature will agree to adjust their pensions to reflect the higher cost of living.
The legislature decides in some years to grant one-time bonuses with money most often coming from the general fund. But legislators have not been able to turn to the pension fund to pay cost of living adjustments, or COLAs, because the fund has repeatedly missed its growth targets.
That could change in a few years. A new board overseeing state pension investments will consider the balance between pension investment risks and returns with an eye toward being able to provide COLAs.
Tim O’Connell, executive director of the NC Retired Government Employees Association, said it’s good to have more than one person responsible for pension investments. North Carolina was one of the few states that put the legal authority for pension fund management in one person’s hands.
“There is better news ahead for retirees, and quite honestly, for active employees and for taxpayers,” O’Connell said. Vetted and balanced investment decisions will be good for the state, he said.
“A lot of things that needed to happen with the pension are happening,” O’Connell said.
State Treasurer Brad Briner, who was elected last year, pushed for the new law creating the board. The new investment authority had its introductory meeting in August, but Briner started making changes to the pension fund months earlier – notably, investing money that was being held in cash.
Briner announced in July that the pension fund posted record returns in the first six months of 2025.
“We don’t take the responsibility of protecting and growing taxpayer dollars lightly,” Briner told legislators at a Tuesday oversight committee meeting. “We know you expect us to alleviate the strain pension deficits cause on the budget. We know retirees expect us to move into a position where cost of living adjustments can be considered. We know taxpayers expect us to make sound and reasonable decisions with their money, particularly in mitigating how much of the annual budget is funded into the pension system.”
The pension fund, valued at more than $133.8 billion, has more than enough to pay retirees each month. But in actuarial terms, it’s running a deficit. As investment returns improve and the deficit closes, it will be time to consider cost of living increases, Briner said in an interview this week.
The state could reach that point in 2027, he said.
“The market is running really hot right now,” he said in the interview. “It’s been good for us, but it won’t always be this good.”
State employees don’t often receive genuine cost of living adjustments that mean permanent increases. The last time state employees received a cost of living increase was in 2016, when they received 1%, according to the Treasurer’s office. Local government retirees, whose COLAs are determined by a board of trustees, received a 0.1% increase in 2015.
The pension plan for teachers and state employees and the plan for local government employees are the two largest of the state’s seven pension plans.
Under former Treasurer Dale Folwell, who took pride in his conservative approach, the pension fund had the worst investment performance of any state, according to a 2023 Yale University analysis. Folwell tended to hold a greater proportion of the pension fund in cash than other public pensions.
Folwell never liked the idea of spreading responsibility for pension investments to an investment board and still doesn’t.
He said in an email that market downturns after 9/11, in the 2008 financial crisis, and during the COVID-19 pandemic affected the ability to pay COLAs over the last 25 years.
O’Connell said the pension fund shouldn’t take on too much risk, but it shouldn’t take on too little, either.
“We’re aspiring to be average,” he said.
The State Employees Association of North Carolina once supported widening responsibility for pension investments. Now, SEANC Executive Director Ardis Watkins said, they don’t think it matters.
“Governance doesn’t matter,” she said. “Transparency does.”
SEANC is approaching the new investment authority with “hesitant optimism” that Briner “will steer this board toward appropriate decisions,” Watkins said.
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