NC Pension Advisor Quits Over 'Sheer Lack of Resources'

October 24, 2003 ( - With bitter complaints that he had neither the staff nor the money to do his job properly, North Carolina's chief investment advisor announced he is stepping down from the post at the end of the year.

Andrew Silton claimed in his resignation letter that the treasury department’s 12-person investment division, which handles the state’s pension fund, should be tripled and existing salaries should be at least doubled, the Raleigh (North Carolina) News reported. The average salary in the division is about $48,000 a year, which is less than what 90% of state pension funds nationwide pay their investment staff, Silton said.

Silton also recommended that the $56-billion state pension fund curtail its search for new money managers since such searches cannot be done effectively until more people are hired.

“It is the sheer lack of resources that finally drove me to the conclusion that I cannot continue to act as your chief investment adviser,” Silton wrote in the letter to Treasurer Richard Moore. “In my 25-year professional career I have never seen an investment organization so inadequately staffed or compensated.”

Hired two years ago as an independent consultant, Silton played a key role in persuading Moore to move some money out of bonds and into stocks, venture capital funds and real estate. He fired investment firms he thought were not generating good results for the fund and encouraged Moore to buy more short-term bonds, which better insulated the fund against the recent decline in bond prices.

Silton’s approach differed starkly from that of his predecessor, Doug Chappell, who was known for investing the pension fund conservatively and sticking with the same managers. He also earned a lot more money. Silton will receive a $192,000 salary this year, nearly double his predecessor.

In terms of performance, the fund generated a 7.6% return in the 12 months ending June 30. The fund provides retirement benefits to 680,000 current and future retirees.