NC Pension Fund Returns - what is the benchmark?

Ron Elmer has an excellent blog posting showing that although the NC pension fund outperforms its own "custom" benchmark, it has lagged the median return for all public pension funds over 1,2, 5, and 10 years.  

In the past year, the fund underperformed by over 2%.

A couple of observations:

1. The NC Pension Fund benchmark is largely worthless because it changes from year to year and is created by the office that is running the money.   As Ron points out, a simple median of all state pension funds makes a lot more sense unless you believe that NC's pension fund is somehow special.

2. The 10 year underperformance is about -0.38%.   That gap could be eliminated by just reducing fees.  As I've pointed out before, the NC Pension Fund pays way too much in management fees, and lowering those fees by about 1/3 of a percent wouldn't be too hard.   

And in case you're wondering, a very back of the envelope computation of 1/3 of a percent over 10 years is about $2 Billion in fees (assuming $60Bn fund value as a rough average over 10 years).

We are bleeding money to Wall Street.