Since North Carolina Treasurer Janet Cowell touted the progress of state pension funding last week, questions have been raised about the pension's investment in Facebook Inc.'s initial public offering.

Cowell said the nation's 11th-largest public pension fund benefited from investments in bonds over stocks to return 2.21% for the year.

The state lost $4.1 million on its $26 million investment in Facebook's IPO in May.

Its 618,137 shares are now reportedly worth half the $38 it paid, according to the News & Observer.

"Given the fact that IPOs are always considered to be somewhat speculative … people are outraged that some of their retirement money was lost," Ed Regan, executive director of the Retired Governmental Employees' Association told the newspaper.

"On this one, they messed up, and people want to know if anyone is going to be penalized for this," Regan said.

Julia Vail, a spokeswoman for Cowell, said the Facebook investment was a discretionary decision made by an outside manager.

"The Facebook IPO investment was less than a tenth of 1% of the pension fund's global (stock) portfolio," Vail said.

Facebook began trading publicly in mid-May, following one of the most anticipated stock offerings in history.

The stock opened at $42.05 and has fallen sharply and fluctuated in the weeks since.

The deal raised questions about wrongly placed trades by Nasdaq and the stock being priced too high by underwriter Morgan Stanley, among others.

Last week, the North Carolina Retirement System joined a class-action lawsuit filed against Facebook and its underwriter, alleging it was misled and seeking damages, according to the News & Observer.

Despite the loss, the pension fund ended the fiscal year with assets valued at $74.5 billion.

It is also ranked the third-best funded in the United States with a funded ratio of 96.3%, according to a recent survey by Standard & Poor's.

The system provides retirement benefits for more than 850,000 state employees, teachers, firefighters, police officers, judges and other public workers, and its assets have historically exceeded their accrued liability, according to Standard & Poor's.

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