SAS to help North Carolina treasurer manage state pension risk

State to use SAS® Analytics to evaluate investment risk, safeguard $72.8B portfolio

CARY, NC  (Oct. 28, 2011)  – The North Carolina Department of State Treasurer will use analytics software from SAS to strengthen its investment process and better protect the pensions of more than 850,000 citizens. The new SAS risk management technology, which is customized for state pensions, will help the Department’s Investment Management Division better assess the risks associated with new and current investments in its $72.8 billion portfolio, and have more accurate expectations of return on investment and volatility. 

The North Carolina Department of State Treasurer partnered with the SAS Analytics Lab for State and Local Government and the SAS Risk Consulting Practice to focus the power of SAS Analytics on state pension risk.

"We are excited to be working with SAS on this risk management system," said State Treasurer Janet Cowell. "It's our responsibility to make sure our retirees and current state workers have the pension they expect when they retire. The system will allow us to isolate and measure the various risks across our multi-asset portfolio to protect their savings."

The new solution contains risk and performance measurement models for fixed income equity, private markets, hedge funds, etc., and provides specific reports and dashboards for pension fund portfolio management. It contains data management and workflow processes specific to pension fund assets, and integrates third-party benchmark and market data related to pension funds.

"With SAS, pension fund managers can focus on risk and performance management rather than measurement," said Paula Henderson, Vice President, SAS State and Local Government Practice. "The solution doesn't just evaluate portfolio risk, but helps ensure that the pension fund is adequately compensated by performance for the risk it assumes."

Portfolio and market data is hosted at the SAS Analytics Lab for State and Local Government, which saves precious tax dollars on hardware and personnel. Launched in late 2010, the lab partners with state and local leaders to improve government services with the latest in advanced analytics technology. It currently devotes the resources of nearly 300 professional, mostly doctoral-level SAS experts to devising technology solutions to critical state and local government issues, such as fraud, waste, abuse, tax collection, public safety and education.

Nationwide pension system values peaked in 2007 at $2.93 trillion before the financial crisis and recession caused holdings to decline to $2.1 trillion in early 2009. Pension funds have been slowly recovering since. That 28 percent drop brought increased interest in how public retirement systems evaluate portfolio risk. "Since taxpayer money partially funds public retirement systems, it's critical to have a clear view of our investment risks and understand how those risks relate to our liabilities," said Cowell.

Moving forward, the SAS state pension risk offering will be used by other government or commercial organizations that administer pension funds. "The North Carolina Department of State Treasurer will become a frontrunner in creating a risk management framework for its state pension. Very few states are currently doing it, which we hope to change," said Henderson. "The technology has been designed to be easily replicated in other states."

SAS is used in all 50 states and more than 115 local governments to transform their operations to deliver the right services, at the right time, with the appropriate resources. data integration, business intelligence and analytics solutions, and collaborates with government to create innovative offerings tailored to specific departmental and agency goals.

About the Department of State Treasurer

The Department of State Treasurer serves the people of North Carolina through a variety of functions related to the fiscal health of the state and its citizenry. The Department administers the public employee retirement systems for more than 850,000 North Carolinians, as well as the 401(k) and 457 plans for public employees. It also provides fiscal assistance and expertise to local governmental units by assisting them in the sale of local government debt obligations and in maintaining good budgeting, accounting, reporting, and other fiscal procedures

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