Treasurer Folwell Submits Framework for Draft Legislation to Enact NC 401(k) Employer Match for All State Employees
Legislation would attempt to close the 40% participation gap between state and local employees
(Raleigh, N.C.) - State Treasurer Dale R. Folwell, CPA, has submitted a framework for draft legislation that introduces a monthly $25 employer match for nearly 350,000 active members in the Teachers’ and State Employees’ Retirement System (TSERS), Consolidated Judicial Retirement System (CJRS), Legislative Retirement System (LRS) and the Optional Retirement Program (ORP). While $25 may seem like a small monthly amount, it adds up to tens of millions of dollars in appropriations by the General Assembly.
The Supplemental Income Matching Program through Legislative Enactment (SIMPLE) presents an incentive for teachers and state employees to actively participate in the state-sponsored NC 401(k) Plan. Members currently contribute 6% each month to the North Carolina Retirement Systems, one of the strongest pensions in the country. This provides a financial foundation in retirement, but most people will need more to meet the recommended 80% of pre-retirement income. Overseen by the Department of State Treasurer and the Supplemental Board of Trustees, the NC 401(k) Plan offers an additional retirement savings option for North Carolina’s public servants.
“State employees are participating in the NC 401(k) Plan at a rate less than one-half of local government employees. This is a monumental gap that we must address,” said Treasurer Folwell. “It is not enough to simply offer an avenue to save. We must provide an incentive that will encourage action.”
Approximately 70% of local government employees actively contribute to the NC 401(k) Plan, with 550 employers offering a match or contribution. Recognizing the impact of this additional employer benefit, SIMPLE proposes the state match dollar-for-dollar, up to $25 per month, for contributions made by TSERS, CJRS, LRS and ORP members.
“My goal is to make sure that there is a benefit to all, but especially to those who are on the lower end of the pay scale. Providing a flat dollar match rewards hard work and participation, giving those that need it most an incentive to not only save but remain constant in their contributions,” Treasurer Folwell said. “With over 100,000 members in the eligible population earning less than $40k per year, there is a substantiated need to provide a path to retirement readiness.”
The North Carolina Supplemental Retirement Plans (NC 401(k) and NC 457 Plans) are exclusively available to public servants in the state of North Carolina and are among the largest and lowest-cost public plans in the country. The Plans are administered by the North Carolina Department of State Treasurer (DST) and the Board, and offered by more than 1,100 public employers, including state agencies, local governments, school districts and community colleges. For more information, visit myNCPlans.com.
Are you tired of being bombarded by paywalls and pop-up ads when trying to read the news? Do you believe that access to reliable political news should be free and accessible to everyone? Then we urge you to support NC Political News, a weekly electronic political news outlet.
NC Political News is committed to providing high-quality, unbiased political reporting with columnists from all political sides. Unlike other news outlets, NC Political News is free to read and supported by businesses who purchase ad space on our website and in our newsletter, which goes out Monday through Friday at 7:00 am. This means that readers like you can access the news without being asked to pay a cent or dealing with frustrating advertisements.
However, to continue providing this valuable service, NC Political News needs your support. If you believe in the importance of accessible, free news, we urge you to click the image below. Any amount of support is appreciated.
Together, we can keep the news free and help ensure our state stays informed and connected.
