Trash collector, mechanic, CPA, lawmaker — now he wants to run NC’s $90 billion pension fund

Rep. Dale Folwell on the House floor during a special session of the Legislature in Raleigh, NC on Feb. 16, 2012.
Rep. Dale Folwell on the House floor during a special session of the Legislature in Raleigh, NC on Feb. 16, 2012. cseward@newsobserver.com

Dale Folwell arrives for an interview with enough props to cover a conference table. Books, a sheaf and stacks of documents. And a bowling pin. He has penetrating brown eyes, which flicker when he reaches for a book.

“The Keeper of the Public Purse” was written by Harlan Boyles, a Democratic state treasurer who served 24 years after his first election in 1976. Folwell recites a passage. “The North Carolina state treasurer has more constitutional and statutory responsibilities and duties,” he says, “than any other elected official in the state except for the governor.” He closes the book.

In a bid to become North Carolina’s first Republican state treasurer since Reconstruction, Folwell is running against Democrat Dan Blue III in a contest with no incumbent. A North Carolina native, Folwell is a certified public accountant and former head of the state Division of Employment Security, speaker pro tempore of the House and four-term House member.

He was also an investment adviser for Deutsche Bank, gas station attendant, custodian, trash collector and motorcycle mechanic.

“A third of my life has been blue collar, a third white collar and a third has been public service,” he said.

Folwell entered the N.C. House in 2005 when the Republicans were the minority party. But he reached across the aisle and authored 29 bills that became law, he said. Among them was a bill creating the Mototax, which combined renewing car registration with paying property tax. Folwell also helped update the state’s organ donation laws.

Folwell’s 7-year-old son Dalton died after being hit by a car in 1999. Folwell and his wife decided their son should donate his organs. He became such a champion of organ donation that he drove his motorcycle more than 30,000 miles to raise money around the country for that cause.

Ardis Watkins, State Employees Association of North Carolina legislative affairs director, has known Folwell more than a decade. She said she always appreciated his toughness and candor. SEANC has endorsed Folwell in the race.

“Dale always did what he promised to do and never promised what he could not do,” she said. “There were times when he disagreed, or said he could not support us. But what was striking about Dale as a legislator was that he wanted facts and if the facts you gave him were compelling, he would change his position. He was not here to win a popularity contest.”

Unemployment benefits

In 2012 Folwell ran for lieutenant governor but lost to Dan Forest in the May 2012 primary. In March 2013 his fortunes changed when Commerce Secretary Sharon Decker tapped him to lead the state Division of Employment Security. At the time the state’s unemployment insurance system owed $2.5 billion to the federal government.

Folwell says he embraced the title of reformer. Stories still circulate at the General Assembly of him riding his motorcycle to distant corners of the unemployment bureaucracy to conduct unannounced visits for snap inspections.

Thirty months later DES repaid its debt and announced a $1 billion surplus.

Not all DES reforms were popular. To repay the debt, a state law imposed a surcharge on employers and curtailed jobless benefits by decreasing the amount of weekly payments and the number of weeks one could receive benefits. North Carolina now has one of the lowest unemployment benefits in the nation.

Those changes caused a storm, as did a later push to more than double the number of verified job searches that benefit recipients were required to make each week, from two to five.

When the federal debt was repaid, the state AFL-CIO called it a “a Pyrrhic victory.” Chapter secretary-treasurer MaryBe McMillan criticized DES and called the benefit cuts callous and counterproductive.

This year the AFL-CIO supports Blue. “Unemployed workers are still paying the price for the draconian cuts that were made," McMillan said, “and as secretary of DES, Dale Folwell supported those cuts, which were brutal.”

Some have also criticized Folwell for his social conservatism. A vocal supporter of the Amendment One effort to ban same-sex marriage and civil unions, Folwell consistently ranked among the House’s most conservative members when he served. At the time, the LGBT advocacy group Equality North Carolina called the amendment blatant discrimination based on homophobia.

In addition to the SEANC endorsement, which generally goes to Democrats, Folwell has been endorsed by every major law enforcement, firefighter and first responder group in the state, including the North Carolina Police Benevolent Association, N.C. Trooper’s Association, N.C. Fraternal Order of Police and the Professional Firefighters and Paramedics of North Carolina.

Folwell cites his credentials as a CPA and experience as a reformer as his primary qualifications to serve as the next state treasurer. “This election is about being qualified, not connected,” he said, adding that he referred to his opponent’s family political connections. Blue is the son of the state Senate minority leader. “This job is about integrity, ability and passion. You can be a rock star in ability and passion, but without integrity, it’s nothing.”

Pensions and health

Folwell has firm ideas about managing the state’s $90 billion state employee pension plan.

Under Treasurer Janet Cowell, the state paid $513 million in financial management fees in the 2015 fiscal year, according to the treasurer’s office. Over the past decade those management fees have increased nearly 1,000 percent, WRAL reported.

“The first thing I’m going to do is cut $100 million out of the financial management fees that state employees now pay,” Folwell has promised.

For some time SEANC has argued the treasurer’s office is wasting pension funds on exorbitant fees while receiving poor rates of return. They cite Folwell’s stance on fees as a reason for endorsing him. “If I am treasurer, I will open the books,” he said.

Folwell believes the $90 billion pension plan contains significant unfunded liabilities. These, he says, are partially based upon what he calls an unrealistic 7.25 percent assumed rate of return for “a pension plan that has earned less than 1 percent last year,” he said.

Treasurer’s spokesman Brad Young said the state’s retirement system is the third-best-funded pension system in the nation. “The rate of return over Treasurer Cowell’s time in office, from January 2009 through June 2016, is 8.18 percent,” he added, “well above the 7.25 percent assumed rate of return.”

Folwell supports an expectation of 5.25 percent growth and appreciates that dropping the rate would cause a political storm at the General Assembly over extra funding the pension plan would need. He said a campaign of transparency, accountability and waste cutting will start turning the tide.

As one of a handful of states with an individual serving as the sole trustee of such a massive pension fund, suggestions have been floated that a board of directors should be added for oversight. Folwell disagrees. “I think a sole fiduciary has worked extremely well for North Carolina,” he said, adding that the concept of the treasurer as the keeper of the public purse is predicated on the keeper being one person.

Folwell sees disaster at the state’s $3 billion health plan, which has “a $30 billion hole,” he said. He said teachers received promises they would have lifetime health care, but nothing was stored away to pay for it.

“They kicked that can down the road,” he said. “And now that can is the size of USS North Carolina. It’s got to be addressed.”

Folwell describes it as tragic that he hears from highway patrolmen and teachers who must take extra jobs to pay their family health-insurance premiums. As a result, Folwell says he would freeze family premiums.

Young said the plan’s unfunded liability has been significantly reduced without reducing benefits since the State Health Plan became part of the treasurer’s agency.

Preparing to leave an interview, Folwell mentioned that no question was asked about his most curious prop — the bowling pin. It’s battered and scarred. “I take this everywhere and used it all the time at DES,” he says, brown eyes dancing again. “In bowling you have 10 pins, but only one ball. Focus to hit the one pin you need to hit. That is the only way to make the rest of them fall.”

Dale Folwell

Age: 57

Education: Bachelor of science and master’s in accounting from UNC-Greensboro. A certified public accountant.

Professional experience: Former vice president and registered investment adviser for Deutsche Bank; also a gas station attendant, custodian, trash collector and motorcycle mechanic.

Political resume: Former positions include N.C. assistant commerce secretary, speaker pro tempore, four-term member of the N.C. House of Representatives and Forsyth Board of Education member.

Family: Married to Synthia Folwell; three children

Website: dalefolwell.com

Duties of the treasurer

The job’s primary duties entail managing North Carolina’s $90 billion pension plan — the 26th largest pension fund in the world according to the treasurer’s office — and administering the $3 billion annual state health plan, which provides for more than 700,000 teachers, state employees and retirees and their dependents. The treasurer is also a member of numerous state boards and commissions, including the Local Government Commission, which reviews proposed debt by cities and counties, in addition to the State Banking Commission and Board of Education. The salary is $127,561.


With no incumbent, the treasurer’s race is attracting significant money. In this year’s second quarter, Dan Blue III raised $216,499 while Dale Folwell brought in $164,499. Folwell, however, ended the period with more than three times the amount of cash on hand as Blue.