The North Carolina Investment Authority (NCIA) Board of Directors met today and voted to make changes to how the North Carolina Retirement Systems’ (NCRS) makes investment decisions.
“These were the final steps in the construction of North Carolina’s newest state agency, the North Carolina Investment Authority,” State Treasurer Brad Briner said. “We now have approved the Investment Policy Statement and the incentive compensation plan.
“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. These two important actions will allow the team to do just that,” Treasurer Briner said. “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.”
The board approved a new strategic asset allocation, which is a long-term plan that sets a mix of investment asset classes and risk controls. The update adds flexibility and includes new performance benchmarks. The board also updated other components of the NCRS Investment Policy Statement, which spell out investment guidelines and required processes.
The NCIA Board of Directors 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.
A report highlighting investment performance and recent investment transactions (see attachment) was presented during the meeting. Those included technology-focused and Europe-focused private equity, real estate and hedge fund investments. A number of other transactions, including some large co-investments in commercial real estate debt and private equity, are in various stages of diligence and negotiations. NCIA had $208.23 billion of assets under management as of Dec. 31, 2025, which included $141.5 billion in the state pension plan.
Ortec Finance, a risk management consultant, presented findings of its stress tests that projected the NCRS fund, under its new strategic asset allocation, should show healthy growth leading to full funding. Among other aspects, the study assessed five economic scenarios over a five-year period. The analysis determined outcomes in each scenario such as expected investment returns, what that might mean for employer contributions to the fund and the NCRS’s funding ratio. The study found the pension fund is “very strong” and should perform similar to 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.
About NCIA:
The North Carolina Investment Authority was created by the General Assembly under the 2025 State Investment Modernization Act. It is governed by a Board of Directors and chaired by the elected State Treasurer.