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Public pensions in North Carolina

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North Carolina information (2016)
Total contributions:
$3,028,704,000
Employee contributions:
$1,261,098,000
Government contributions:
$1,767,606,000
Total payments:
$6,184,130,000
Total cash and investment holdings:
$87,703,405,000
Number of state and local pension systems:
70
Active membership:
705,930
Inactive membership:
209,444

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Key terms
Actuarial value of assets (AVA)
Unfunded actuarial accrued liability (UAAL)
Annual required contribution (ARC)
Discount rate • Funded ratio
Rate of return • Active member
Inactive member • OPEB
Hover over the above
terms for definitions.
Note: This page utilizes information from a variety of sources. The information presented on this page reflects the most recent data available as of August 2017.

North Carolina public pensions are the state mechanism by which state and many local government employees in North Carolina receive retirement benefits.

According to the United States Census Bureau, there were 70 public pension systems in North Carolina as of 2016. Of these, seven were state-level programs while the remaining 63 were administered at the local level. As of fiscal year 2016, membership in North Carolina's various pension systems totaled 705,930. Of these, 496,487 were active members.[1]

HIGHLIGHTS
  • In fiscal year 2016, total contributions of $3.0 billion were made to North Carolina's state and local pension systems. Of this amount, $1.3 billion came from employees.
  • In fiscal year 2016, North Carolina's state and local pension systems made payments totaling $6.2 billion.
  • As of fiscal year 2016, North Carolina's state and local pension systems held $87.7 billion in total cash and investment holdings.

    • See the sections below for specific information on pension systems in North Carolina:

    1. General information: This section outlines the different types of pensions systems available in the state, as well as membership information.
    2. Contributions: This section details the contributions made to state-level pension systems, and the source of the contributions.
    3. Payments: This sections details the payments made by the pensions systems, and details what kinds of payments were made.
    4. Cash and investment holdings: This section provides information about the total amount of cash and investments the state's pension systems have, and what kinds of investments they have made.
    5. Pension health: This section outlines the findings of two reports regarding pension health, including how much liabilities the state pension systems have and how funded they are.

    General information

    See also: Pension data, U.S. Census

    According to the U.S. Census Bureau, North Carolina had seven state pension plans as of 2016:

    1. North Carolina Fire and Rescue Squad Workers Pension Fund
    2. North Carolina Teachers and State Employees Retirement System
    3. North Carolina Local Government Employee Retirement System
    4. North Carolina Consolidated Judicial Retirement System
    5. North Carolina National Guard Retirement Fund
    6. North Carolina Legislative Retirement System
    7. North Carolina Registers of Deeds Supplemental Pension System

    In addition to the aforementioned state-level pension systems, there were 63 locally administered pension systems in North Carolina.[1]

    The table below provides general pension system information for North Carolina and surrounding states.

    General pension system information, 2016
    State Systems Total members Active members Inactive members
    State Local Members Percent of total Members Percent of total
    North Carolina 7 63 705,930 496,487 70.33 209,444 29.67
    Georgia 11 45 630,350 403,940 64.08 226,409 35.92
    South Carolina 4 6 394,983 214,599 54.33 180,384 45.67
    Virginia 4 30 580,392 406,682 70.07 173,710 29.93
    Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2016"

    Contributions

    See also: Pension contribution and payment data, U.S. Census

    Pension contributions are the funds paid into pension systems. These contributions come from the employer (in the case of public pensions, the government) and employees. Investment earnings are the main source of increases in the fund and are listed separately in the rightmost column in the below table.

    In fiscal year 2016, total contributions of $3.0 billion were made to North Carolina's state and local pension systems. Of this amount, $1.3 billion came from employees. The remainder came from state and local governments. The table below provides information about pension contributions in North Carolina and surrounding states in fiscal year 2016. All dollar amounts displayed should be multiplied by 1,000 ($240,000 is equal to $240,000,000).[1]

    Pension contributions, fiscal year 2016 (dollars in thousands)
    State Total contributions from employees and employers Employee contributions Government contributions Earnings on investments
    Contributions Percentage of total Contributions Percentage of total
    North Carolina $3,028,704 $1,261,098 41.64% $1,767,606 58.36% $920,572
    Georgia $3,789,850 $869,000 22.93% $2,920,850 77.07% $1,130,340
    South Carolina $2,153,131 $872,339 40.51% $1,280,792 59.49% $90,957
    Virginia $4,175,904 $1,009,944 24.19% $3,165,961 75.81% $2,396,280
    Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2016"

    Payments

    See also: Pension contribution and payment data, U.S. Census

    Payments are the amounts paid to pension recipients by their pension plans. Pension payments include benefits and withdrawals. Benefits are the regular payments made by a pension plan to the plan's recipients. Pension beneficiaries may also withdraw funds if they leave the system before they receive regular benefits.

    In fiscal year 2016, North Carolina's state and local pension systems made payments totaling $6.2 billion. The table below provides pension payment information for North Carolina and surrounding states in fiscal year 2016. The columns labeled "Benefits," "Withdrawals," and "Other" are subsets of total payments. All dollar amounts displayed should be multiplied by 1,000 ($240,000 is equal to $240,000,000).[1]

    Pension payments, fiscal year 2016 (dollars in thousands)
    State Total payments Benefits Withdrawals Other
    North Carolina $6,184,130 $5,562,289 $175,968 $445,872
    Georgia $7,132,093 $6,818,699 $170,195 $143,200
    South Carolina $3,462,282 $3,071,288 $113,031 $277,963
    Virginia $6,119,324 $5,499,268 $117,875 $502,179
    Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2016"

    Other post-employment benefits

    See also: Other post-employment benefits, data

    In addition to standard pension payments, some plans may offer pensioners additional benefits. These benefits, sometimes referred to as other post-employment benefits, or OPEBs, consist of health insurance, life insurance, or other benefits that the pensioner may have received while employed. The cost of these benefits can prove complicated for actuaries to calculate because of the changes in fields like medicine, which can results in large changes in spending year to year. This, coupled with the normal challenges in calculating and meeting pension requirements, can result in funding shortages for pension plans.

    According to the National Association of State Retirement Administrators, unfunded liabilities totaled nearly $585 billion throughout the country for OPEBs. North Carolina was reported to have about $26.6 billion in unfunded liabilities for OPEBs. This was equal to about 2.6 percent of total state expenditures.

    The chart below displays the unfunded liabilities for North Carolina and its surrounding states. All dollar amounts displayed should be multiplied by 1,000,000. For instance, $300 translates to $300,000,000.

    Unfunded actuarial accrued liabilities for other post-employment benefits, fiscal year 2015 (dollars in millions)
    State Unfunded liabilities Percent of state expenditure
    North Carolina $26,615 2.6%
    Georgia $15,662 0.5%
    South Carolina $9,860 3.8%
    Virginia $2,172 0.4%
    Source: National Association of State Retirement Administrators, "Retiree Health Care Benefits for State Employees in Fiscal Year 2015," accessed August 20, 2017.

    Cash and investment holdings

    See also: Pension data, U.S. Census

    Investments are a crucial part of the pension process. The goal is that, by investing pension contributions, the pensioner will receive more money when he or she retires than he or she and the employer were able to contribute. These investments are made in cash, short-term investments, securities like equities and bonds, or other assets. Cash investments are usually low-risk, short-term investments that have a lower rate of return than other types of investments. Other short-term investments are riskier than cash investments, but have the potential for greater returns. Securities can refer to stocks, bonds, or other types of financial certificates that hold some sort of financial value. As the values of these securities change, they can be traded to make a profit. While there are other applications of securities investments, this represents one of the most common practices.[2][3][4]

    As of fiscal year 2016, North Carolina's state and local pension systems held $87.7 billion in total cash and investment holdings. The table below summarizes pension system cash and investment holdings for North Carolina and surrounding states. The columns labeled "Total cash and short-term investments," "Total securities," and "Total other investments" are subsets of the grand total. All dollar amounts displayed should be multiplied by 1,000 ($240,000 is equal to $240,000,000).[1]

    Total cash and investment holdings, fiscal year 2016 (dollars in thousands)
    State Grand total Total cash and short-term investments Total securities Total other investments
    North Carolina $87,703,405 $1,325,063 $64,836,696 $21,541,646
    Georgia $93,547,192 $2,053,404 $90,622,306 $871,482
    South Carolina $29,513,757 $4,756,493 $19,461,258 $5,296,006
    Virginia $82,711,198 $1,038,679 $69,346,689 $12,325,830
    Source: United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2016"

    Pension health

    See also: Pension health in North Carolina and Public pension health by state

    Pension health is a term used to describe the fiscal condition of a pension system. It can be difficult to gauge pension health in each state; studies use a variety of calculations to determine a pension system's average liabilities, unfunded liabilities, funded ratio, and other metrics. The information on this page comes from two reports by two separate organizations: the Pew Charitable Trusts and the Hoover Institution.

    HIGHLIGHTS
  • According to the Pew Charitable Trusts, the funded ratio for North Carolina's public pension system was 95 percent in fiscal year 2015.
  • According to the Hoover Institution, North Carolina had unfunded liabilities totaling $150,713,451.

    • Recent legislation

    The following is a list of recent pension policy bills that have been introduced in or passed by the North Carolina state legislature. To learn more about each of these bills, click the bill title. This information is provided by BillTrack50 and LegiScan.

    'Note: Due to the nature of the sorting process used to generate this list, some results may not be relevant to the topic. If no bills are displayed below, then no legislation pertaining to this topic has been introduced in the legislature recently.

    Recent news

    This section links to a Google news search for the term "North Carolina + public + pensions"

    Carolina+public+pensions&um=1&ie=UTF-8 North Carolina public pensions news feed

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 United States Census Bureau, "State- and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2016," accessed August 20, 2017
    2. ↑ Investopedia, "Cash investment definition," accessed April 6, 2015
    3. ↑ Investopedia, "Short-term investments definition," accessed April 6, 2015
    4. ↑ Investopedia, "Securities," accessed April 6, 2015
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