Jody Smith details North Dakota retirement fund's history and modernization efforts

The North Dakota Senate Appropriations Committee convened on March 6, 2025, to discuss significant developments within the state's retirement and investment office, highlighting the agency's historical evolution and recent advancements in technology and fund management.

Interim Executive Director Jody Smith opened the meeting by providing a comprehensive overview of the agency's history, tracing its origins back to 1913 with the establishment of the Teachers Fund for Retirement. This fund laid the groundwork for the creation of the State Investment Board in 1963, aimed at centralizing investment decisions for state funds. The Retirement and Investment Office (RIO) was formed in 1989 to manage the growing administrative needs stemming from the state investment board's operations.

Currently, the State Investment Board oversees an impressive $23 billion across 31 client funds, with the largest being the Legacy Fund, valued at approximately $11.5 billion. Each client fund is responsible for its asset allocation and investment policies, with the RIO assisting in selecting investment managers to optimize returns while managing risk levels.

Smith reported a notable increase in the Teachers Fund for Retirement's funding ratio, which has risen to 71.63% as of July 1, 2024. This marks a half-percent improvement from the previous year, with projections indicating that the fund is on track to achieve full funding status by February 2043. This progress is attributed to legislative changes made in 2013 aimed at enhancing the fund's sustainability.

A significant milestone for the agency was the recent launch of a multi-year IT modernization project for pension administration, which went live on February 10, 2025. This upgrade is expected to streamline operations and improve efficiency, although initial challenges are anticipated as staff adapt to the new system.

The meeting underscored the importance of these developments in ensuring the long-term viability of North Dakota's retirement funds and the agency's commitment to enhancing its operational capabilities. As the RIO continues to evolve, stakeholders can expect ongoing improvements in fund management and member services.