(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, and the Boards of Trustees overseeing the Firefighters’ and Rescue Squad Workers’ Pension Fund (FRSWPF) and National Guard Pension Fund (NGPF) announced today that their preliminary estimates indicate significant increases in the funded ratios of both pension plans.
A pension plan’s funded ratio is the percentage of its actuarial accrued liabilities that are covered by its asset value. By law, the Retirement Systems’ consulting actuary performs an annual actuarial valuation of each pension plan to monitor and adjust the plan’s progress toward its funding goals.
As of Dec. 31, 2019, the FRSWPF annual actuarial valuation is expected to place the funded ratio at 92.3% - significantly higher than 83.7% just eight years ago. Additionally, the NGPF is expected to report a funded ratio of 88.1% as of Dec. 31, 2019, up from a low of 67.0% in 2015.
Historically, both plans have been underfunded. In January 2017, the Local Governmental Employees’ Retirement System (LGERS) Board of Trustees adopted a contribution stabilization policy for the FRSWPF. In April 2019, the Teachers’ and State Employees’ Retirement System (TSERS) Board of Trustees adopted a similar policy for the NGPF. Both policies require the boards to recommend stable contributions from year to year that are level or increasing, never less than the actuarially determined contribution, and often exceeding it.
Both the North Carolina House and Senate responded to the Boards’ recommendations by appropriating contributions that significantly exceed the actuarially determined contributions for both pension plans. For example, for the FRSWPF, the appropriated contribution is $19,352,208 for fiscal year ending June 30, 2022, exceeding the actuarially determined amount of $15,182,523. For the NGPF, for the same year, the appropriated contribution is $11,031,715, exceeding the actuarially determined amount of $6,382,278.
In addition, the Retirement Systems' Boards of Trustees and division staff have collaborated with the North Carolina National Guard, and organizations representing firefighters, rescue squad workers and their employers, to improve the operation of the FRSWPF and NGPF, and to improve the accuracy of information provided for the consulting actuary’s work. Treasurer Folwell thanked all for their hard work and dedication, specifically acknowledging Firefighters’ and Rescue Squad Workers’ Pension Fund Advisory Panel members former Charlotte Fire Department Deputy and current Waco Volunteer Fire Department Chief Kevin Gordon, Statesville firefighter Capt. Josh Smith, and Forsyth County firefighter Walter Beroth for their service and invaluable help in reaching this milestone.
Noting that 75% of North Carolina’s landmass is protected by volunteer fire departments, Treasurer Folwell acknowledged Chief Gordon’s decade-long effort to simplify and modernize the “turnaround” document that improves the quality of rosters.
“We’re trying to find out what’s right, get it right and keep right on behalf of those that teach, protect and otherwise serve,” said Treasurer Folwell. “The credit goes to both plans’ boards, the General Assembly and the staff at the Retirement Systems Division. We decided that we needed to administer these plans to the standards that firefighters, rescue squads and members of the National Guard deserve. The results have been significant.”
The FRSWPF provides benefits to all paid and volunteer certified firefighters and rescue squad workers. FRSWPF has approximately $459 million in assets and over 55,000 members as of Dec. 31, 2019.
The NGPF provides benefits for National Guardspersons who have attained age 60 with at least 20 years of military service, 15 of which must be in the N.C. National Guard. NGPF has approximately $146 million in assets and over 14,000 members as of Dec. 31, 2019.