Despite the recent hype about the state’s public unfunded liability, the sky is not falling.

North Carolina has the fifth largest public pension system in the United States, with more than $97 billion in assets. Established in the 1930s, defined benefit pensions continue to be an industry standard and recruiter for public employees to build their futures, a carrot for those willing to work at public sector rates for a long-term benefit. Today though, it seems defined benefit plans are misunderstood as incapable of sustaining itself for future retirees.

Unfunded liabilities — the amount of money required to fulfill future payment obligations beyond the present value of funds available to pay them — have become the villain of the public benefits narrative.

And this misunderstanding is pertinent to North Carolina, where discussion of the pension systems’ unfunded liabilities are often coupled with the unfunded liabilities of the massive State Health Plan.

Combining the unfunded liabilities of our pension system and the State Health Plan makes for an intimidating number. Intimidating, yet deceptive. In reality, North Carolina’s pension system remains among the strongest in the United States.

Take a closer look at the reality of our state’s public benefits. First, the state’s pension systems are separate from the State Health Plan. Completely. They exist independently in both oversight and purpose.

The state health plan’s estimated unfunded liability is indeed a difficult number to swallow, with estimates ranging between $32 billion to $35 billion. But consider the enormity of the state health plan: 900,000 people are covered, making the plan the largest in North Carolina. The actual unfunded liability of the State Health Plan could only fulfill that estimate if all current members of the system were to max-out their coverage, all at one time, for the remainder of their lives.

An unlikely scenario.

Much the same applies to the unfunded liability for our public pensions’ systems. Current estimates show that the state’s pension systems’ have $18 billion in unfunded liability, while the pension plan itself is 88 percent funded.

While the employer contribution rate may change every year, the investment of the state’s employees does not. Employees are required to invest 6 percent of their salaries into the pension system as a condition of employment, and have been required to do so since the mid-1970s. When looking over the life of retirees’ pensions, many retirees invested significantly more to their retirement than the state or local government that employed them.

Recently it was announced that North Carolina will continue its AAA bond rating, sharing this rating with only a handful of other states. The highest rating a government can have comes not only from our state’s fiscal responsibility, but also the state treasurer’s ability to conservatively and prudently manage public benefits like the pension system.

Our state treasurers have a history of safeguarding the integrity of our public benefits. Treasurer Dale Folwell continues to lead that effort. Protecting our public sector workers ability to participate in a defined benefit plan must remain at the top of the treasurer’s priorities.

Are unfunded liabilities an issue to deal with? Yes. But in context long term planning and incremental solutions — not knee jerk reactions — are what will keep our state pension an attractive benefit for generations to come.

The sky is indeed not falling.

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Richard Rogers is the executive director of the North Carolina Retired Governmental Employees Association.