The North Carolina Investment Authority (NCIA) is gearing up for a major governance shift as it held a consequential meeting to approve its founding documents and budget in anticipation of assuming control of the state's investment duties on January 1, 2026. In a move away from decades of tradition, the NCIA will take the reins from the North Carolina Department of State Treasurer (DST), marking a significant alteration in how the Tar Heel State manages its finances.
After a year of changes, the NCIA reported at the meeting that assets under management in the North Carolina Retirement Systems (NCRS) saw an impressive growth, reaching $139.1 billion as of September 30. This number represents a significant increase from the $126.5 billion recorded at the end of 2024, according to a report by NC Treasurer's Office. The investment returns for the calendar year to date sit at approximately 11%, surpassing the 6.5% assumed rate of return, a testament to both a robust market and strategic investment choices.
The seeds of this financial governance transformation were planted by State Treasurer Brad Briner, who advocated for the dissolution of the sole fiduciary status afforded to his office. His efforts culminated in legislative action that resulted in the creation of the NCIA, now chaired by Treasurer Briner himself. "Today is a big day in North Carolina’s financial history," Briner expressed in a revelation by the NC Treasurer's Office, signaling the significance of the transition.
As part of its preparatory moves, the authority has approved a budget for the fiscal year 2025-26 pegged at $26.1 million, with notable increases in personnel services costs, 65% of which is attributed to a swelling headcount and 35% to the implementation of a market compensation study conducted by consulting firm Mercer. The study showed that most Investment Management Division salaries were below the 25th percentile in the market. As a result, the authority plans to incorporate a pay-for-performance model aimed at positioning base salaries at median market levels augmented by an incentive bonus structure, set to be designed in 2026.
Established under the 2025 State Investment Modernization Act, the NCIA is on the cusp of a new era, looking to set high expectations and rigorously meet them. "It’s a watershed event in terms of governance," said DST Chief Investment Officer and Deputy Treasurer Kevin SigRist, serving as the Interim CIO of NCIA, in a quote obtained by the NC Treasurer's Office.
