(The Center Square) – Part-time workers for the state of North Carolina would be able participate in North Carolina’s 401(k) retirement savings plan under a bill that passed the House of Representatives this week and is now pending in the Senate.
The legislation was one of three bills pending in the Legislature related to state retirement benefits and could make it easier for the state to recruit part-time workers, state treasurer Dale Folwell told The Center Square. Folwell’s office requested the legislation, which was introduced by Rep. Carson Smith, R-Pender.
A change in federal law made it possible for states to expand 401(k) participation to part-time employees, the treasurer said.
“This is really the first opportunity we’ve had to put this in place,” Folwell said.
The 401(k) plan is separate from the state’s pension plan, but two other bills in the three-bill package are aimed at increasing the efficiency of the pension system, the treasurer said.
“The General Assembly has worked very closely with us over the last eight years to make sure we are doing everything we can to not only simplify but also sustain the pension plan for the next generation of public-service workers,” Folwell said.
House Bill 989 reorganizes and standardizes the rules and procedures for employees who have worked at other government agencies to purchase credit for a portion of that work in the North Carolina pension plan. This is the third revision of the rules in the last few years and the changes have reduced the costs of administering the pension plan, Folwell said.
Before the revisions, there were 88 different ways to purchase the credits, the treasurer said. State agencies had different rules and formulas for the purchases.
“These changes make it easier for our customers, the human resources departments, to have something simple that they can understand,” Folwell said. “At the end of the day, everything we do is to save money and keep the plan going.”
Eliminating confusion over those rules can also help the state recruit employees who have worked at other government agencies, Folwell added.
North Carolina’s pension plan is sound, the treasurer said.
“It’s one of the best-funded pension plans in the United States,” he said. “It just got its second designation, back-to-back, of being the most efficient pension plan in the United States.”
