As reported by the N&O today, the State Treasurer’s office this week released updated figures for the state retiree pension fund and health insurance benefits. The outlook is pretty grim.
Some highlights:
- In North Carolina, taxpayer spending on state retirees’ pensions and health care ($1.4 billion) is larger than the budget for the entire UNC System
- The state’s primary retiree pension fund has an unfunded liability of $7.1 billion – but is about 90% funded
- Unfunded liabilities for state retiree benefits now exceeds $33 billion
How did the liabilities for health benefits get so large? “No money, for 37 years, has ever been put aside for that” responded State Treasurer Dale Folwell.
The retiree health benefits, in the long term will be addressed by a law passed in this year’s budget requiring that anyone who becomes a state employee after 2021 will have to pay for their post-retirement health care entirely on their own. That still, however, does not address the liabilities already accrued.
Moreover, with regard to the pension plans’s $7.1 billion liability – that number likely understates the problem. That assumes a 7.2% return rate on pension fund investments over the 30-year time horizon. That’s highly unlikely. A more realistic discount rate would calculate a much higher liability. For instance, from the Treasurer’s report, if the pension fund’s liability were calculated using a 5.13% discount rate, the liability shoots up to more than $29 billion.
Cut them off… Cut them down – narrow and shallow solutions brought to you by NCCivitas.
Another Democrat created mess that Conservatives must deal with. Do government retirees truly expect us in the private sector to toil the rest of our lives to pay their bloated benefits obtained during their short careers with job security unheard of in the real world? The only fair solution to this mess is an immediate across the board cut in retiree benefits. Millions in the private sector have lost pensions during the disaster of the Obama regime. It’s about time government workers felt a bit of our pain. It’s also time for a dramatic reduction in the size of government at all levels. Privatize everything.
As a “policy organization” one would think that NC Civitas would study and reveal a solution. Instead, they just take political shots and offer nothing.
And Kent exemplifies the readers with his hyper-partisan dog whistle response.
The financial crash of 2008 wiped out 40% of American retirees wealth Kent.
Scott,
I know you are a new troll here, and “search our website” is really difficult; so here is a link to what you are referencing: https://www.nccivitas.org/2012/budgetreform/
The budget looks grim…we have underfunded liabilities… we will cut taxes! Naturally those tax cuts will generate funds that will fund the underfunded liabilities….Right Civitas….????
Scott,the American people lost 40% in 2008,but if they had sense enough to stay in the stock market they would be way ahead.5.4 trillion in gains just since Trump was elected.Now tell me that was because of Ostupid’s policies.