Cities and Counties Won’t Need to Increase Property Taxes
RALEIGH – State Treasurer Dale R. Folwell, CPA, is throwing his support behind a 2% pension supplement for retirees of local governments.
The budget enacted by the General Assembly and signed by Gov. Roy Cooper provided for a 2% pension supplement this year for state retirees. In addition to providing the supplement for state retirees, the General Assembly passed Senate Bill 311, which allows the Board of Trustees of the Local Governmental Employees’ Retirement System (LGERS Board) to provide a supplement, provided that sufficient funds are available to pay for the benefit from investment gains earned on the Treasurer’s investments.
“We are blessed to have had sufficient market returns to provide this benefit increase to our local retirees in a fiscally responsible manner without increasing the rates we charge to cities and counties across the state – many of which are financially struggling,” Treasurer Folwell said. “Our job is to keep the retirement system solvent for this and the next generation of those who teach, protect and serve.”
To that end, in January of 2021 the LGERS Board adopted a funding policy agreement to reduce the unfunded liability of the retirement system in collaboration with the N.C. League of Municipalities and the N.C. Association of County Commissioners.
In Treasurer Folwell’s view, the action he is recommending today is consistent with the objectives of the funding policy and would promote stability of the retirement systems’ finances. The money to pay for the 2% pension supplement would come from the 11.12% net investment gains the retirement system earned during calendar year 2020.
“The General Assembly made a wise decision to stick with a supplement instead of a new benefit and I’m asking the LGERS Board to make a similarly wise choice,” said Treasurer Folwell. “Every time I see a grocery receipt, I worry about our retirees on fixed incomes. They need this help and I’m glad that we’ve had solid enough investment performance to pay for it without burdening taxpayers.” The LGERS Board, which is chaired by Treasurer Folwell, meets Jan. 27 and is expected to make a final decision on the issue.
The North Carolina Department of State Treasurer (DST) administers the employee retirement systems for more than 950,000 public workers, along with their 401(k), 457 and 403(b) plans. DST manages the pension plans’ investments currently totaling $124 billion. It also oversees the State Health Plan, which provides health care coverage to more than 750,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.
Fiscal assistance and expertise are provided by the department to local governmental units by aiding them in the sale of local government debt obligations and in maintaining sound budgeting, accounting, and reporting procedures.