The local ABC channel (11) reported last night that the NC Treasurer's office has uncovered wide spread fraud among retirees. Examples include retirees boosting their income in their last year of work and double dipping by retiring and then returning to work too quickly.
An officer for the Treasurer's office claims that in the later case alone, they've uncovered $1 million of fraudulent payments. While this is good news, lets get things in perspective. The state of NC Pension Fund pays over $300 million in fees to Wall Street and still underperforms its peers. The average management fee for the fund is around 50 basis points (0.5%), which might seem low, but for a fund of this size, this is ridiculously large. The state should be paying well under 10 basis points. Remember that 1 basis point of $70 Billion is $7 million!
While stamping out fraud is good, the place to look for real savings is in the fee structure of the fund. It is for this reason that I'll be voting for Ron Elmer in the May 8 primary for NC Treasurer. He's pledged to cut management fees by $50 million in his first year or he'll work for free. You can read more about his plan here.
You can also check out Ron's website here. You can also visit him on Facebook.
Disclosure: This blog is my personal blog, posts on it reflect my own personal opinions and do not reflect the views of my employer. I wrote and posted this on my own computer on my own time.