Sorry to ruin your day
RALEIGH — If during the past few years of fiscal instability, you consoled yourself with the fact that at least North Carolina’s pension fund for teachers and state employees was sound, I’m going to ruin your day.
Bond-rating agencies and regulators are about to change the system for evaluating state and local pension funds. Rather than use the average stock-market return to estimate the future returns of pension funds, they are going to use the average rate of return on bonds.
This may sound like some boring change instigated by some boring actuaries. But it could have great significance for your taxes, for your retirement planning (if you are a state employee or married to one), and for the business climate of North Carolina.
A pension isn’t a defined-contribution system like an IRA or ...