When your job is managing the $80 billion state pension fund, you might welcome a report ranking that pension fund among the best prepared in the country.
But a new report from Moody's Investor Service is not receiving such a warm embrace from State Treasurer Janet Cowell and her staff.
The report puts North Carolina's pension funding gap — the amount of expected payouts to pensioners weighed against its assets and projected earnings and contributions — as the sixth lowest in the country.
It also shows that funding gap as $7.48 billion, roughly double the amount calculated by the state.
The difference is why Cowell is not so pleased with the report.
In her role with the National Association of State Treasurers, Cowell wrote to Moody's prior to the report being issued that she worried that the methodology could lead to inaccurate findings and cause government to reduce obligations to pensioners.
Specifically, Cowell and other state treasurers are displeased that Moody's is not basing the funding gaps on their own investment earnings projections.
North Carolina's pension fund, for example, bases its numbers on future projected earnings of 7.25 percent. Moody's used far more conservative projections, a move that "puzzled" state treasurers, according to the letter.
It is hardly puzzling to everyone.
Last year, New York Mayor Michael Bloomberg called the 8-percent projected returns being used by some pension funds "laughable" and the 7- to 8-percent figures used by others "totally indefensible."
Other critics have also urged pension funds to lower their projections.
Looking at North Carolina's actual numbers, over the last five years investment returns averaged 4.96 percent. Over 10 years, they averaged 7.65 percent.
So maybe what is or isn't realistic comes down to which numbers you want to consider.
To make sense of the numbers, it is worth putting the funding gaps in perspective. Whether North Carolina's gap is $7.48 billion or $3.72 billion, the state has decades to try to close it and a lot of options to do just that.
Still, if the projections are wrong, the difference will ultimately have to be made up with either higher taxpayer contributions to the pension fund or reduced future benefits for pensioners.
It is worth having a realistic picture now to make decisions for the future.
Meanwhile, Cowell continues to push legislators for more liberal investing rules that would allow her to move more pension fund investments from bonds and publicly traded stocks into private equity, hedge funds, commodities and other non-traditional investments.
She is pursuing those changes as a growing number of finance experts question public pension fund moves into hedge funds and other investments that carry high fees. One recent study cited North Carolina as one of the states that, in exchange for higher fees, has received lower returns.
It is quite the juggling act, hoping none of the numbers falls to the ground.
—Scott Mooneyham covers the state Legislature for the Capitol Press Association.