North Carolina Decides to Underfund Pension

Raleigh, N.C. - For the first time in nearly 70 years the North Carolina General Assembly failed to contribute 100% of its share to the Teachers and State Employees Retirement System.
            Politicians were required to pay $684 million to keep the pension fund balanced. Instead they set up two scenarios, neither of which amount to the $684 million. The final figure will depend on whether or not the federal government continues to pay for some state Medicaid programs.
            The state budgeted nearly $364 million dollars to contribute to the TSERS fund. The contribution equals 53% of the actuarially required $684 million contribution.
            It also set aside $138 million in case the federal government does not deliver the Medicaid money. North Carolina will add the $138 million set aside for Medicaid to fund TSERS if the federal government provides the Medicaid money. So, the state could potentially spend $502 million on the TSERS fund.
            Neither scenario adds up to the actuarially required $684 million dollars. The result is an underfunding of the pension and a possible long-term inability to pay benefits fully.