Contribution Stabilization Policies and Operational Measures to Support Stable, Effective Administration Approved by Retirement Boards

The Teachers' and State Employees' Retirement System (TSERS) and Local Governmental Employees' Retirement System (LGERS) Boards of Trustees (Board) approved several measures to support stable operations and effective administration across the North Carolina Retirement Systems (NCRS).

The Boards adopted contribution rate stabilization policies for both the Firefighters' and Rescue Squad Workers' Pension Fund (FRSWPF) and the N.C. National Guard Pension Fund. These policies will remain in effect for five fiscal years, ending after June 2032, and are designed to fund the plans gradually through fixed annual contribution increases. This approach supports long-term sustainability and helps avoid unpredictable budgeting fluctuations for participating employers.

"Strong retirement systems require both sound financial policies and effective operations," said State Treasurer Brad Briner. "The Board's actions today reinforce our commitment to long-term sustainability while ensuring we have the people, processes and planning necessary to serve North Carolina's public employees, retirees and employers efficiently today and well into the future."

The annual report from the FRSWPF Advisory Panel was presented, and staff-at the direction of the LGERS Board-will study the possibility of a tiered benefit structure that would allow increased pension benefits for firefighters and rescue squad workers who continue serving beyond 20 years.

An independent CEM Benchmarking report presented to the Boards showed that several NCRS operational areas are performing at higher productivity and lower cost than national peers. To support stable administration, the trustees voted to create new positions in certain understaffed sections. These limited adjustments are targeted to critical operational areas where under resourcing directly affects service delivery for more than one million public employees, retirees, and their employers. The measures are designed to maintain essential functions, not expand the overall footprint of the Retirement Systems. Legislation passed this year allows for the action.

The Boards also received an update on fiduciary responsibilities and best practices for modernizing core pension administration systems from Frank Karpinski of Linea Solutions. NCRS relies on ORBIT to manage records, workflow, and web-based services for members and employers. While ORBIT continues to support daily operations, evolving statutory requirements and increasing workloads have introduced manual processes and workarounds. The presentation provided foundational information for future modernization planning.

Staff will present information on changes to the structure of the Boards at the October meeting. These changes were included in the budget bill enacted by the General Assembly and signed by the Governor. No changes to Board structure will take effect until July 1, 2027, and no appointed members with unexpired terms will lose their seats.