FREQUENTLY ASKED QUESTIONS

INVESTMENTS

1. If the stock market performs poorly, how does this affect my pension benefit?

2. How does the State Investment Board decide which stocks to buy and sell?

3. Can just anyone invest money with the State Investment Board?

4. How have the investments under the State Investment Board performed historically?

1. If the stock market performs poorly, how does this affect my pension benefit?
   
   All of the pension funds invested with the State Investment Board are Defined Benefit Plans. This means that your benefits are determined by a formula defined as years of service × average salary × some multiplier. Therefore, fluctuations in the markets do not have a direct impact on your benefit. Defined Benefit Plans are invested with long-term objectives in mind. The growth of the funds helps to pay for future benefits and benefit enhancements and to pay down any unfunded liability of the plan.
    

2. How does the State Investment Board decide which stocks to buy and sell?
   
   The SIB externally manages all of its investments. This means that the board hires professional investment management firms to invest portions of the assets in different types of investment accounts. The investment managers make the day-to-day decisions on which stocks or bonds to buy or sell based on investment strategies they are hired to utilize.
    

3. Can just anyone invest money with the State Investment Board?
   
   Only those funds specified in NDCC 21-10-06 (state agencies, institutions or political subdivisions) are allowed to invest with the SIB.
    

4. How have the investments under the State Investment Board performed historically?
   
   Please refer to the performance summary page for historical investment returns on the various funds under the State Investment Board.