The following editorial appeared in the Fayetteville Observer:
When a large amount of money on which many people rely is at stake, it makes sense to take important decisions out of the hands of a single individual.
That’s what a panel is advising State Treasurer Janet Cowell to do with state retiree pension funds. With $86 billion on the line, we think it makes good sense.
While the decision will be made in Raleigh, it’s sure to resonate statewide. Those whose pensions are affected include state workers and teachers. Wise investment of these dollars will matter a great deal to each of them, creating a ripple effect on the state’s economy.
State employee organizations have long sought this change, though not always for the right reasons. Whenever there’s been a downturn in the fortunes of investments, the state treasurer receives blame. That won’t change under the proposed board of trustees; they’ll just share in anger over moves that backfire, while receiving little credit for actions that prove shrewd.
Despite periodic griping when those inevitable downturns occur, most observers say the existing model has worked well in North Carolina. But change is still overdue. We’re one of only four states that still place these decisions in one person’s hands.
“Although the model has worked well to date here in North Carolina,” said Michael Kennedy, the chairman of the advisory panel, “my primary concern is that job is becoming a lot more complex and investments in a general sense are becoming a lot more complex.”
Support for the change is bipartisan, but so is opposition. Four of the 11 panel members, including Rep. Rick Glazier, D-Cumberland, issued a statement explaining their dissent. Noting that “the buck stops at one desk” under the current system, these panel members warn that appointing trustees “is fundamentally designed to dilute that singular accountability.” They called instead for increasing the staff that assists and advises state treasurers.
We agree that giving the treasurer more staff may be in order.
But it’s much better to prevent serious errors – the types of mistakes that individuals make – rather than holding someone accountable after the fact. This is why we dilute governmental power, with many members making up legislatures, appellate courts and executive cabinets. Someone may cast a tie-breaking vote or be expected to call the final shot, but we are better off without autocratic rule, no matter how effective the autocrat.
Trustees should better avoid pitfalls while safeguarding those billions in funds.
MCT Information Services