Fiscal Research Division _ Salaries and Benefits
Salaries and Benefits
FY 2011-13 Budget Highlights
Fiscal Brief March 2012
The North Carolina General Assembly House and Senate Appropriations/Base Budget Committees address statewide
appropriations for compensation and benefits as a full committee based on recommendations from the Chairs of the
respective Appropriations Committees. This fiscal brief highlights the General Assembly’s 201 1 Session actions to
adequately finance various benefit systems that serve active and retired employees of State agencies, universities,
local public schools, and local community colleges. The primary benefit systems described are the Teachers' and
State Employees Retirement System (TSERS) and the State Health Plan for Teachers and State Employees.
Salaries
The 2011 Session of the General Assembly maintained
the freeze on most salary increases for State
employees as enacted during the 2009 Session
including the freeze on automatic salary increases for
certain employee groups. Section 29.8 of S.L. 201 1-
145 as amended by Section 59A of S.L. 2011-391,
2011 Budget Technical Corrections, specifies certain
exceptions to the general salary freeze. The 2011
Session of the General Assembly also maintained the
freeze on public school teacher, principal, and
assistant principal salaries as enacted during the 2009
Session. Teachers, principals and assistant principals,
who have gained an additional year of experience, will
move up one step on the experienced based schedules
but their salaries will remain the same.
Retirement
Due to the significant losses in the market value of
assets during the 2008 calendar year, the actuarial
agencies and departments, universities, local public
schools, and local community colleges. Eligible
retired employees of authorized employing units
may also access health benefit coverage under the
Plan. Eligible dependents of active and retired
employees are authorized to participate in the Plan
provided they meet certain requirements.
Employees and retired employees of selected local
governments may also participate in the Plan under
certain conditions. Members of fire, rescue squads,
and the National Guard may also obtain coverage
under the Plan provided they meet certain eligibility
criteria.
Executive Summary
The State provides funding for salaries for employees
of State agencies and universities and a majority of the
personnel employed by local public schools and
community colleges. The General Fund payroll base is
estimated to exceed $11.09 billion for FY 2011-2012.
Total payroll is expected to exceed $15.58 billion,
including receipt revenues from State agencies,
universities, local public schools, and community
colleges.
The State operates several retirement systems for
public employees. The Teachers’ and State
Employees’ Retirement System has the largest
membership and assets of all the retirement systems
and provides benefits to eligible employees of State
agencies, departments, universities, local public
schools, and local community colleges. As of
December 31, 2010, the System had approximately
317,000 contributing members and paid retirement
benefits of $3.3 billion annually to 163,938
beneficiaries. As of December 31, 2010, the market
value of assets totaled $54.1 billion while the
actuarially recognized assets totaled approximately
$57.1 billion. Recognized assets exceed the market
value of assets due to the effect of investment gains
and losses being averaged over a five-year period to
smooth market fluctuations (i.e. the significant losses
sustained during the 2008 calendar year). The System
was considered 95% funded (i.e., $0.95 in assets for
each $1.00 of liabilities) based upon the recognized
assets as of December 31, 2010.
The State Health Plan for Teachers and State
Employees (Plan) administers health benefit coverage
for active employees from employing units of State
