Coronavirus: State pension fund tested, highly regarded for handling pandemic

ELIZABETHTOWN — Markets have nosedived, and local economies have crashed under the strain of the coronavirus.

For retired educators and other state workers, concern has risen for their pensions and health care.

“It’s ironic that we had this plan stress-tested seven months ago,” Dale Folwell, the state treasurer, said in a one-on-one interview with the Bladen Journal earlier this week.

The stress test was performed by Pew Charitable Trusts. The state’s plan has also been reviewed by Moody’s Investor Services.

“Moody’s said we were No. 1 in the country in terms of our ability to fund the plan in an economic downturn,” Folwell said.

Rest assured, most analysts say the current economic situation is as bad or worse than the Great Depression that began 91 years ago and lasted a decade. The analyses documents, Folwell said, that the state has one of the safest plans in the country and even in the world.

“Our performance reflects the fact we don’t have a crystal ball, and we don’t gamble,” he said. “The plan, for this entire year with all the volatility, is down 2.7 percent.”

Folwell said another $530 million in state pension checks will go out on time this week.

As state treasurer his job, in layman’s terms, is keeper of the public purse. More than 900,000 teachers, law enforcement officers and other public workers look to his office to manage a $100 billion state pension fund.

COVID-19 has been a killer of people and the economy.

Folwell himself has recovered from the coronavirus. It sent him to the intensive care unit at Wake Forest Baptist Medical Center in Winston-Salem for five days. His description to other media outlets is one of an intense battle, at one point his doctor telling him he needed to focus on breathing and nothing else.

It’s given him a unique perspective as the state essentially shut down and has slowly started to reopen. He says it bothers him that any challenge to a position is immediately cast into a political spectrum.

“I appreciate more than anyone the focus on the sick,” he said. “But we can’t punish the healthy.”

Assistance has come through the federal CARES Act, but even that has strings attached he calls “bizarre.” Bladen County’s portion is $782,398. The money is namely to be used for COVID-19 expenses but not necessarily to fill in budget gaps.

“When someone says is it COVID-19 related, what in the world today is not?” Folwell said.

He believes municipalities and counties should be able to use the money to maintain the level of assistance they’ve always provided. He praised Elizabethtown as a good steward, with 32 percent in reserves. He also acknowledged Bladen County, which County Manager Greg Martin says is at 39 percent.

“I don’t think Elizabethtown could have predicted this downturn in the budget,” Folwell said. “You have to run your business so that if perfection doesn’t occur, you can still run your business. I applaud Elizabethtown, because they’ve been watching the pennies and paperclips. They’ve shown they’re good at it.”

Folwell said the state’s 80 rural counties will survive the economic struggles by working together. That won’t always mean they are “in the same boat,” but there should be consistencies for each.

“For those that have the economic means, do everything possible to consume within Bladen County,” he said by way of encouragement to residents. “Every time they buy a Pepsi-Cola or a pack of nabs, it not only helps sales tax but it helps their cities and county. The money in their pocket doesn’t know where the border is; it goes where it can be spent. I’m trying, as a member of the Council of State, to push the power away from Raleigh and back to North Carolinians and their communities.”

Should a second wave of the virus come this flu season, North Carolina will be in better shape than most, Folwell said. He bases his opinion on CARES Act funding, unspent resesrves, the state’s rainy day fund and the unemployment trust fund.

“But, with all that said, mathematically, we have to have transparency and data to create the right policies to move our state forward,” he said. “My fear is that we have many communities across North Carolina that had barely gotten out of the last recession and now they’re going to be in an economic virus that is far worse.

“What I’m trying to do is flatten the curve on the economic virus. And the reason that is important, if you’re locked in your house, you’re not mobile. If you’re not mobile, you’re not consuming. And if you’re not consuming, you’re not generating gas tax, sales tax, occupany tax and the like. And, it just seems in my lifetime, anytime a crisis like this hits, it’s usually the lower income and fixed income people that get hit the worst.”

That touches a lot of people in a county like Bladen, where nearly half the working population is tied to agriculture and the median household income is just over $32,000 — about $20,000 below the state average.

“There’s been a lot of talk about flattening the virus curve, I’m working to flatten the economic curve,” he said. “The insecurity of our citizens has never been greater.”