PFFPNC

On February 8, 2005, the North Carolina Treasurer and the Retirement Division Staff held two legislative briefings in Raleigh for legislators. The PFFPNC was one of 18 organizations who sponsored these events. The purpose of these meetings was to educate both legislators and public employee lobbyists about the public employee retirement systems managed by the North Carolina Department of Treasurer. The following is a brief description of the material covered:

Briefing Objectives

To provide an overview of the N.C. Retirement Systems
To develop an understanding of the current and future demographics and funding issues facing the retirement System
To report on customer service improvements as well as the challenges facing the Retirement System

The NC Retirement is/was:

Created by the General Assembly over 60 years ago
The 9^th largest public pension plan in the country
The 15^th largest pension plan overall
1 in 8 North Carolinians is a member of the retirement system
680,000 members – 500,000 active & 180,000 retirees

1. Teachers & State Employees Retirement System 479,600

2. Local Government Employees – 171,280

3. Consolidated Judicial Retirement System – 961

4. Legislative Retirement System & Legislative Fund – 489

Other Benefit Programs Managed by the Retirement Division

NC 401 (k) Supplemental Retirement Income Plan
Firemen’s and Rescue Squad Workers’ Pension Fund
National Guard Pension Plan
Registers of Deeds Supplemental Pension Plan
Disability Income Plan / Teachers and State Employees
Death Benefit for Teachers, State Employees, Local Government Employees and Legislators
Contributory Death Benefit for Retirees

The Defined Benefit Formula is:

State Employees – Years of Service x Average Final Compensation (48 highest consecutive months) x Accrual Factor 1.82% = Benefit level
Local Government – Years of service x Average Final Compensation (48 highest consecutive months) x Accrual Factor 1.85% = Benefit level

Cost of Living Adjustments (COLAs)

Ad-hoc in NC vs. Statutory – The profits of the Systems (undistributed gains) fund the increases in the formula and yearly retiree raises

Employer Provided Healthcare

North Carolina pays 100% of state employees’ cost of retiree’s health insurance premium, provided the retiree has completed 5 years of contributing membership services. Due to the rising cost of care, this may be changed to basing the level on the number of years the retiree contributes to the system.
Each local government determines the level of coverage for their retirees

Where does the Funding for the Systems Come From?

Employee Contributions
Employer Contributions
Investment Income

North Carolina Constitutional Mandate

“Neither the General Assembly nor any public officer, employee, or agency shall use or authorize to be used any part of the funds of the Teachers’ and State Employees’ Retirement System or the Local Governmental Employees’ Retirement System for any purpose other than retirement system benefits and purposes, administrative expenses, and refunds; ….shall not be applied, diverted, loaned to, or used by State, any State agency, State officer, public officer, or public employee.”

A National Picture of Funding Liabilities

In January of 2002, the assets of the retirement systems of North Carolina and 23 other states were 100% funded
In January of 2004, after the continuing decline of the stock market, North Carolina and Florida were the only two states whose retirement systems were 100% funded

Growth in the Retirement System

In every key business process over the last decade, the Retirement Division had significant increases in activity.

1. Retirements processed up 104%

2. Refunds processed up 51%

3. Enrollments processed up 85%

4. Reports processed up 57%

5. Contributory death benefits claims up 84%

Annual Administrative Cost of the Systems

NC’s Administrative Cost per member: $21
Peer System Average Administrative Cost per member: $69

How to Contact the Retirement Division

Website: www.nctreasurer.com
Retirees toll free: 1-(877)-733-4191

Local (919) 733-4191

Active Employees call: toll free: 1- (877) 627-3287

Local: (919) 807-3050

E-mail: nc.retirement@treasurer.state.nc.us
Fax: (919) 508-5350
Mail: Retirement Systems Division

Department of State Treasurer

Albemarle Building

325 North Salisbury Street

Raleigh, NC 27603-1385

Information Needed to Assist You

Full Name
Social Security Number (SS#) or Retirement Number
Telephone Number
Brief Description of the issue (i.e. disability issue, error in calculation, etc.)
Note: Office visits with counselors are by appointments only