Continued Long-Term Funding Will Offer Certainty for NC’s Future
(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA expressed his appreciation for the work done by Senate and House Appropriations Chairs and all members of the North Carolina General Assembly (NCGA) for their efforts in passing bipartisan bills that address the state’s $50 billion in unfunded pension and health care liabilities as well as fully fund benefit packages for the year.
“It’s even more important in challenging economic times to act responsibly in addressing long- term liabilities,” said Treasurer Folwell. “This is a promise delivered under adverse circumstances that will continue to build the state’s reputation for fiscal responsibility. My sincere appreciation to the members of the General Assembly as well as the Governor for their support of this legislation.”
Combined, the provisions of the recently-signed House Bill 1218 and Senate Bill 818 provide a new allocation of $32 million per year for the state’s Retiree Health Benefit Fund – the trust that pays for health insurance for retired teachers, state employees, and other public servants who spent a career serving our citizens. Treasurer Folwell has been a consistent voice for adopting the strategy now embraced by the General Assembly. While a member of the NCGA, he sponsored legislation (here and here) that would have allocated money over and above the historic pay-go approach to retiree health care costs. Now, with $32 million going into the fund, real progress is being made.
Additionally, the General Assembly fully funded the Actuarially Determined Employer Contribution for the state’s retirement system. Because of adverse economic conditions facing the pension fund, this required an increased appropriation of $69.7 million over and above the amount planned last year for the pension fund increase. This move continues the state’s historic commitment to paying into the retirement system, which has been funded every year since 1941.
Further, as authorized by the General Assembly in Senate Bill 719 and made possible by the diligent efforts of the State Health Plan Board’s approval of the previously announced new Medicare Advantage contract, another $475.2 million has now been made available to the Retiree Health Benefit Fund to address unfunded long-term liability.
“A total of more than half a billion dollars is a good start toward closing the $50 billion long-term gap,” said Treasurer Folwell. “It’s a great sign of progress that the General Assembly and the Governor are listening to us on these issues and making difficult, but necessary decisions during this difficult economic time.”
The N.C. Department of State Treasurer (DST) serves the people of North Carolina through a variety of functions related to the financial health of the state and its citizens. Treasurer Folwell serves as the state’s banker and chief investment officer and is responsible for approximately $200 billion in assets. The department administers the employee retirement systems for more than 900,000 public workers, along with their 401(k), 457 and 403(b) plans. DST also oversees the State Health Plan, which provides health care coverage to more than 727,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.