NC pension funds need extra $359M

Published 12:00 am Tuesday, December 1, 2009

RALEIGH (AP) ó North Carolina’s state employee pension funds need an additional $359 million from the Legislature during the next two years to keep them financially sound, State Treasurer Janet Cowell said Thursday.
The news from Cowell, who became treasurer just last month, further burdens lawmakers drawing up a state government spending plan for the next two years by quantifying the retirement system’s needs.
The plan, which covers 820,000 state and local government employees, teachers, emergency responders and retirees, is cited regularly among the healthiest in the country. But the funds lost $17 billion in value in 2008 as the nation entered a recession, falling to $60 billion.
Cowell said recently she would ask the General Assembly for $29 million more in the next fiscal year than the roughly $400 million the pension funds already receive annually from the state. But she said a steeper increase probably would be necessary for the year that begins in July 2010 because of the recent losses.
With Thursday’s announcement, she is setting the need for additional funding for the 2010-11 fiscal year to about $329 million. The estimate follows an actuarial review of the plan by an outside consultant.
The Legislature will have to agree to make this contribution level.
“I understand that this news comes at a time when families, local and state governments and the private sector are tightening their belts,” Cowell said in a news release. “However, it is important for budget-writers to take these costs into consideration as they craft their respective budgets.”
The request doesn’t change how much money the 535,000 public employees covered by the plans must contribute to the pension. They are required by law to put 6 percent of their pay into the retirement system.