(The Center Square) – Fully funding the state retirement plan is not within the budget proposal of the North Carolina governor, says state Treasurer Brad Briner.
“We are disappointed the governor is proposing for only the second time in 83 years to not fully fund our state’s retirement system,” Briner said in a statement. “This proposal sent to lawmakers today would create a $206 million shortfall in the funds for our retirees over the next two years.”
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Briner expressed confidence that legislative leaders will “take the needs of the state’s retirees more seriously.”
The governing board of the state retirement system recommended in January that the state increase its contribution to the pension plan by $44.3 million for fiscal year 2026. About 371,932 people receive state retirement payments.
Gov. Josh Stein’s office disputes Briner’s allegation that the budget proposal fails to fully fund the retirement plan.
“The governor respects and values retired state employees, which is why his recommended budget more than fully funds the state retirement system,” Stein’s office said in a statement. “Governor Stein’s proposal holds the state’s contribution rate steady, which will provide over $380 million more than what actuaries say is necessary in FY 2025-26, and over $551 million more than recommended for the biennium. Governor Stein is committed to protecting the retirement benefits of these employees who have given so much to our state.”
However, Briner maintains that keeping the state’s contribution rate the same is actually a decrease.
“Under the process long used for measuring these types of proposals, the governor’s budget proposal calls for $0 in new money” for the retirement system, Briner’s office said in a statement. “That is because it would make no increase to the contribution rate for already-promised benefits” as a percentage of salaries.
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According to Briner’s office, the state retirement plan’s investment performance has lagged other states for decades. The result has been that the state’s contributions to pensions have doubled in the last decade, costing taxpayers the equivalent of $2 billion.
Briner has proposed creation of a board of professional experts appointed by the Legislature, treasurer and governor to manage the retirement system’s investments. The board would be chaired by the state treasurer. Forty-seven other states have similar boards, according to Briner.