Sunday, September 22, 2013

North Carolina Retirement System Returns Lag Median Pension Returns BADLY

The North Carolina Retirement System (NCRS) return of just 9.5% for the fiscal year ending June 30, 2013 lagged the median pension plan very badly according to an analysis by Pensions & Investments Magazine and Wilshire's Trust Universe Comparison Service (TUCS).  The median large public pension earned returns of 12.6% for the year ending June 30, 2013, or 3.1% higher than NCRS.  Considering the NCRS plan is approximately $81 billion, the 3.1% of under-performance translates into $2.5 billion in lost returns for 2013.  

Median Pension Return = 12.6%
NCRS 2013 Return = 9.5%
Difference = -3.1%
NC Tax Payer Cost = $2.5 Billion 

Friday, September 13, 2013

Fido Bites The Hand That Feeds Him

Fidelity Investments EMPLOYEES are suing FIDELITY for breach of fiduciary duty by repeatedly adding "high-fee, actively-managed Fidelity mutual funds" with "little or no track record" to the Fidelity 401(k) plan.  Do I really need to explain how funny this is?  

The lead plaintiff and former employee, Lori Bilewicz, invested in the Fidelity Freedom 2040 fund within the Fidelity 401(k).  The class-action complaint by 26 current and former employees relates closely to my most popular blog post of all time from 2/15/2012: Fidelity Freedom Funds Aren't "Free" But Are "Dumb".  I would suppose any 401(k) plan using the Fidelity Freedom Funds will be interested in the outcome of this lawsuit. 

You can find more information about the lawsuit by clicking here.  
You can read the actual lawsuit complaint by clicking here