North Carolina's state pension fund fell below the fully funded mark last year for the first time since 1997, State Treasurer Janet Cowell reported Thursday.
The state retirement system was 99.3 percent funded as of Dec. 31, 2008, which means it had slightly less money than it needs to pay the retirement benefits that are projected for the future, Mark Johnson reports. That estimation by actuaries is compiled once a year.
The funding level is likely to continue to decline as investment losses from the recession are spread over several years, Cowell cautioned in a prepared statement.
"State and local governments will need to continue to budget for increased contributions to the system,” she said.
The pension fund still ranks as one of the top five in the nation and remains funded well above the national average of 80 percent, Cowell's office said, quoting the National Association of State Retirement Administrators. In 2007, the system was overfunded at 104.7 percent.
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The fund is supported by three sources. State employees, who contribute 6 percent of their paychecks, account for 29 percent of the fund's income. The General Assembly contributes 11 percent of the income, and revenue from the fund's investments accounts for 60 percent.
The level of funding fluctuates with the retirement system's investments, making it difficult to determine a day by day percentage, so the annual analysis is used as a benchmark. North Carolina's system has the 10th largest public pension fund in the country, providing retirement benefits to more than 500,000 working and retired teachers and state employees.
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