by Anna Manning
Dan Way reports for Carolina Journal:
Senate Republicans are again pushing State Treasurer Dale Folwell’s request to limit risk in the underfunded state pension plan by narrowing the number of retirement options.
The Repeal Risky Retirement Payments Act, as Senate Bill 374 is titled, divides Republicans against Democrats, and pits the N.C. Association of Educators against the State Employees Association of North Carolina.
The Senate Pensions, Retirement, and Aging Committee S.B. 374 Thursday, April 11. The Senate Rules Committee is scheduled to take it up Tuesday.
The bill would repeal two unpredictable retirement payment methods after July 1, 2020. Bill sponsors say those complicated alternatives make it difficult for the Treasurer’s Office and General Assembly to determine how much money to set aside each year to cover the retirement system’s future costs. Opponents say courts consider the benefits a property right and the benefits offer an incentive for people to work for the government.
North Carolina’s $94.2 billion public employees retirement system is one of the best funded in the nation. But it lost $4.1 billion in 2018, and has $17 billion in unfunded liabilities. National bond rating agencies increasingly frown on state pension deficits. Left unresolved, they could lower a state’s bond rating, causing higher interests rates when borrowing money for projects.
“The current path we are on is unsustainable, and if we don’t make these changes then the entire pension plan is at risk,” said Sen. Andy Wells, R-Catawba. He and Senate Majority Leader Harry Brown, R-Onslow, are primary sponsors of the bill.
“We owe it to our hard-working teachers and state employees to guarantee that everyone will continue to receive the pension benefits promised to them,” Wells said.
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