Lawmakers Look To Phase Out Pension Plan

May 3, 2017

Credit 401(K) 2012 / Creative Commons

Some North Carolina state senators are trying to phase out traditional public employee pensions and government retiree health coverage to prevent the state's shortfall for those financial obligations from worsening.

Senate Republicans revived debate Wednesday over the future of employee retirement benefits by discussing their bill in committee.

The state has unfunded retiree health coverage liabilities, and there's also a gap between pension funds now in hand and what the state's obligated to pay current and future retiree pensioners. Those financial obligations total roughly $60 billion.

The bill would make workers hired on or after July 1, 2018 participate in a 401(k)-style retirement plan instead of getting a guaranteed monthly payment based on age, years of service and salary. These same future workers also wouldn't get retiree health care coverage.