(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA praised the North Carolina General Assembly and Governor Roy Cooper today after Cooper signed the Unfunded Liability Solvency Reserve Act. The new law sets up an Employee Benefit Trust Fund to address the state's $50 billion in unfunded pension and health care liabilities. The reserve is funded through appropriations from the General Assembly, any overflows or statutory excesses from the “Rainy Day Fund", or savings from the refinancing of general obligation bonds or special indebtedness.
“I'd like to thank the General Assembly and the governor for their leadership in enacting this crucial piece of legislation," said Folwell. “No more 'kicking the can down the road.' Today, we begin to make a generational difference for all North Carolinians and lead the nation in addressing $50 billion in unfunded pension and health care costs. Our office didn't create or discover these liabilities, but we have an obligation to fix them."
According to a report by Pew Charitable Trusts, the states have $1.6 trillion dollars in long-term spending commitments for pension and retiree healthcare costs. North Carolina's per capita obligations for retiree health care is the 7th highest in the country at approximately $35 billion and just behind Illinois in its severity. The Solvency Fund is believed to be the only one of its kind in the nation.
Primary sponsors of the legislation were Rep. Dollar (Wake), Rep. Lambeth (Forsyth), Rep. McNeil (Moore and Randolph) and Rep. Ross (Alamance).
The N.C. Department of State Treasurer administers the state pension plan with almost $100 billion in assets under management as well as the State Health Plan, which provides health care coverage to more than 720,000 teachers, state employees, current and former lawmakers, state university and community college personnel and their dependents, including non-Medicare and Medicare retirees.