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A Senate committee approved legislation Thursday to further loosening investing rules for the state pension fund at the request of Treasurer Janet Cowell, just as the fund's former investment head has been writing some stinging criticism about states that have ramped up their alternatives investments, Scott Mooneyham at the Insider reports.

Andy Silton, who served as chief investment officer during a portion of the terms of former State Treasurer Richard Moore, has gone as far as to question the moves into private equity and hedge funds during his time on the job here. "Unfortunately, we went ahead and implemented a program of investing in hedge funds and private equity. While our program didn’t do any harm, it didn’t help anyone but the money managers," Silton wrote recently.

The state pension fund declined in the past two quarters, despite a return of 11.97 percent for the fiscal year, the State Treasurer Janet Cowell announced today.

While returns were positive for the fiscal year, the fund ended the second quarter with a decline of 4.25 percent. The fund's assets are valued at $65.3 billion, a decrease from $68.7 billion at the end of the first quarter.

The fund provides retirement benefits and savings for more than 820,000 North Carolina teachers, state employees and public safety workers.

The treasurer's office attributed the downward trend to volatile stock markets due to fears of a global slowdown. Bond markets had stronger returns, though.

"While markets are recovering, it will be some time before we are out of this recession," Cowell said in a statement. "The pension fund was hit hard by the 2008 crash and requires contributions from our state and local governments now and into the future in order to remain healthy. This is a critical obligation which investment returns alone cannot offset."

State Treasurer Janet Cowell has named Shawn Wischmeier as the state's new chief investment officer for the state's $68 billion retirement system.

Wischmeier has been chief investment officer for the Indiana Public Employees' Retirement Fund since 2006 and before that was with Eli Lilly and Company's Global Treasury Group, Rob Christensen reports.

He will make $320,000 per year base salary.

He replaces Pat Gerrick who was fired last August amid questions about her travel expenses and cell phone bills.

Treasurer Janet Cowell will not give bonuses this year.

Last year, the legislature gave the state treasurer the authority to give performance-based pay bonuses to the chief investment officer and four directors of the state pension plan.

But a sagging economy and sensitivity to other state workers led Cowell to put the program on hold this year, said spokeswoman Kerra Bolton.

The decision follows a similar move last week by the N.C. Banking Commission, which held $200,000 in performance bonuses it had budgeted.

Bolton said that the bonus program helps the state compete with private sector firms for people to make investments., noting that 11 of the 13 largest public pension plans have similar programs.

"This is important because high-performing investment professionals increase the chances for above benchmark performance, save systems substantial sums in external management fees, and help to insure the prudent investment and oversight of public plan assets," she said in an e-mail to Dome.