Folwell will Push Pension Solvency Plan with Senate Leaders | Eastern North Carolina Now

State Treasurer Dale Folwell hopes the General Assembly will build on its recent boost in the state's Rainy Day Fund with a plan to make state pensions and health benefits more solvent

ENCNow
    Publisher's note: The author of this post is Dan Way, who is an associate editor for the Carolina Journal, John Hood Publisher.

    State Treasurer Dale Folwell hopes the General Assembly will build on its recent boost in the state's Rainy Day Fund with a plan to make state pensions and health benefits more solvent.

    House Bill 651 would reduce tens of billions of dollars in long-term debt by creating an Unfunded Liability Solvency Reserve fund. The measure passed the House on a 108-4 vote, but stalled in the Senate. Folwell hopes the Senate will reconsider it when the General Assembly returns Aug. 3. He plans to meet with Senate leaders before then.

    Speaking to reporters Tuesday during his monthly Ask Me Anything teleconference, Folwell said the solvency fund is a "carry forward" of the state's Rainy Day Fund. North Carolina now has a record $1.8 billion in that reserve.

    Folwell said bond rating agencies look favorably on dedicated reserves. They allow states to survive economic downturns without raising taxes or cutting services.

    Winston-Salem and Charlotte foresaw unfunded liability issues decades ago, and started municipal solvency funds, Folwell said. The state should do something similar.

    Folwell said bond rating agencies take unfunded pension and health liabilities seriously, and he plans to address the matter to protect North Carolina's "AAA" bond rating.

    Folwell also hopes to perform an asset liability study in 2018. Among other things, it would determine the actual rate of return pension investments are producing.

    State law assumes a 7.25 percent rate of return. But when Fitch affirmed the state's "AAA" bond rating, it concluded the state's pension returns were in fact 6 percent.

    In other areas, Folwell said:

  • The state plans to refinance $600 million in debt, attempting to reduce the interest rates being paid.
  • He continues to review $10 billion in pension assets that were assigned to outside investment managers but never invested. Some of that money has been idle for up to three years, and hasn't generated any growth.
  • The state will start relying more heavily on indexed funds and other "passive" investments, rather than investment management firms to handle pensions and other investments. Meantime, the state will try to get independent analysts to determine the value of state investments. "We have to take someone else's word on what they're worth," Folwell said, and often the information comes from the managers handling the investments.
  • The state probably did not lose as much as it thought originally as a result of the bribery and political kickback scandal involving Petrobras, Brazil's state-controlled oil company. The corruption case caused Petrobras' market value to plummet. An investment fund manager placed North Carolina's money in Petrobras securities. Folwell said this is another reason he wants to move more assets to indexed funds.
  • Next week, Folwell expects to make "a very positive statement" about renegotiating the State Health Plan's contract with United HealthCare for the Medicare Advantage program affecting about 150,000 members of the plan who are 65 and older.
  • More than half of the 193,000 people facing an eligibility audit for dependent care under the State Health Plan have submitted documents, with results expected within four months. The company performing the audit said it expects between 3 percent and 5 percent of people enrolled on the plan are ineligible, which mirrors national averages. He wants to identify people who aren't eligible to get the benefits before October, when the next open enrollment period starts.

Go Back


Leave a Guest Comment

Your Name or Alias
Your Email Address ( your email address will not be published)
Enter Your Comment ( no code or urls allowed, text only please )




Future of Mental Health Service Management Stuck in Legislative Conference Statewide, Government, State and Federal Auditor urges more Oversight in Offices of Superior Court


HbAD0

Latest State and Federal

Daily Wire Editor Emeritus Ben Shapiro is testifying to Congress on Wednesday for a House Judiciary Committee hearing on the alleged conspiracy to suppress conservative voices under the guise of “brand safety.”
At least one person was shot and killed during an assassination attempt on former President Donald Trump on Saturday at a political rally in Pennsylvania in which the suspected gunman was also “neutralized,” according to the U.S. Secret Service.
The State Board of Elections will hold a remote meeting at 10:30 a.m. Tuesday, July 16, 2024.
President Joe Biden formally rejected on Monday a bill in Congress that would require individuals to show proof of U.S. citizenship to register to vote in elections for federal office.
Those with access to President Joe Biden behind closed doors say that his condition is deteriorating at an accelerated rate
Republican lawmakers slammed President Joe Biden this week after an explosive report revealed that an ISIS-affiliated human smuggling network has brought more than 400 illegal aliens into the U.S.
Former President Donald Trump’s legal team filed documents in court on Thursday seeking to have Judge Arthur Engoron thrown off the civil fraud case against Trump in New York after they discovered that he allegedly engaged in “prohibited communications” with an outside party about the case.
Parts of the gag order against former President Donald Trump in his New York hush money case were lifted by Judge Juan Merchan on Tuesday, just two days before Trump is set to square off against President Joe Biden in the first debate of the election season.

HbAD1

'I am a white male and that’s not who they’re looking to promote at the moment,' the man told an undercover journalist.
Viral clips showing President Joe Biden in situations in which he looks to be frail or confused are being dismissed as “cheap fakes” by the White House.
As the first presidential debate between President Joe Biden and Donald Trump nears, the Biden campaign is ratcheting up its attacks on the presumptive Republican nominee’s 34 felony convictions.
Approximately 6,800 people in North Carolina have sickle cell disease, of which approximately 95% are Black or African American.
President Joe Biden delivered remarks on Tuesday at gun control advocacy group Everytown’s annual conference, Gun Sense University — and as is often the case when Biden speaks about guns, critics were quick to point out a series of factual errors.
Democrat strategist James Carville raged against the legacy media this week, demanding that they take an even more biased approach when reporting on former President Donald Trump.
Republican congressman Byron Donalds said it would be a “great honor” if former President Donald Trump were to ask him to be his running-mate for 2024, saying the ultimate goal is for Trump to win and he’ll do whatever he’s asked to help him do that.
Voters in Arizona will have the opportunity to enact broad border security measures in November as the state faces a flood of illegal immigration after the Republican-led state legislature passed a resolution that will put the measures on the general election ballot.
The former White House physician for Presidents Barack Obama and Donald Trump says that a new report this week about how President Joe Biden is struggling to function behind closed doors represents a serious threat to the U.S.

HbAD2

 
Back to Top