A commission created by North Carolina Treasurer Janet Cowell has recommended thatlegislators change how the state handles the $86 pension system forteachers and workers.

North Carolina is one of four states where the state treasurerhas the sole authority to invest pension funds, and the union representing tens of thousands ofstate employees has for a long time been calling for an investmentboard to manage the funds.

The panel, the North Carolina Investment Fiduciary GovernanceCommission, said in a draft report to Cowell Thursday, "As a resultof the Commission's discussions, and after thoroughly vettingapplicable governance related issue, the Commission recommends thata shift be made to the governance of the (North Carolina RetirementSystem) NCRS investment program from the current sole trustee modelto a board of trustees model with the Treasurer serving asstatutory Chair of the board."

The report also provides detail and rationale behind the primarymodel recommendation and offers guidance on issues such as boardsize, board composition, how trustees on the board are appointed,frequency of meetings and scope of authority.

The panel also recommended increasing the level of fiduciaryindependence and codifying existing safeguards into law.

Member of the panel, which was established in January, includeMichael Kennedy, senior client partner of Korn/Ferry Internationaland Chair of the Federal Retirement Thrift Investment Board;Professor Rhoda Billings, former Associate Justice and ChiefJustice of the North Carolina Supreme Court; Linda Combs, formerU.S. Controller; State Reps. Nelson Dollar and Rick Glazier,both members of the Legislative Retirement System; Greg Gaskins,Chief Financial Officer, City of Charlotte; State Sens. Ralph Hiseand Floyd McKissick, both members of the Legislative RetirementSystem; Charles Perusse, COO of the University of North Carolina;Mark Jewell, Vice President of the North Carolina Association ofEducators; and Neal Triplett, President and CEO of DUMAC, DukeUniversity's endowment and pension fund.

Cowell is now expected to review the commission's recommendationand propose changes to lawmakers, who start their annual sessionnext month.