Fiscal Research Division _ Salaries and Benefits
Salaries and Benefits
FY 2012-13 Budget Highlights
Fiscal Brief October 2012
The North Carolina General Assembly House and Senate Appropriations/Base Budget Committees address statewide
appropriations for compensation and benefits based on recommendations from the Chairs of the respective
Appropriations Committees. This fiscal brief highlights the General Assembly’s 2012 Session actions to fund across-
the-board compensation increases and 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. In addition, there are several smaller State-managed retirement systems for elected
judicial and legislative officials, as well as pension funds for fire and rescue-squad workers and the National Guard.
S.L. 2012-142, Modify 2011 Appropriations Act (H.B.
950), as amended by S.L. 2012-145,
Modifications/2012 Appropriations Act (S.B. 187),
appropriates $159.9 million to provide a 1.2% salary
increase to State-funded employees of State agencies,
departments, institutions, the Judicial Branch, and
public schools; to university employees who are
subject to the State Personnel Act; and to non-elected
employees of the Legislative Branch. In addition, it
provides funding equal to the amount necessary to
support a 1.2% salary increase for State-funded
employees of community colleges and university
employees exempt from the State Personnel Act
(EPA) and authorizes the State Board of Community
The State Health Plan for Teachers and State
Employees (Plan) administers health benefit
coverage for active employees from employing
units of State 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.
Salaries
Executive Summary
The State provides funding for the salaries of
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 $10.9 billion for
FY 2012-2013. Total payroll is expected to exceed
$15.27 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, 2011, the System had approximately
311,000 contributing members and paid retirement
benefits of $3.5 billion annually to 171,786
beneficiaries. As of December 31, 2011, the market
value of assets totaled $53.4 billion while the
actuarially recognized assets totaled approximately
$58.1 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 94% funded (i.e., $0.94 in assets for
each $1.00 of liabilities) based upon the recognized
assets as of December 31, 201 1 .
