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North Carolina creates solvency fund to pay down unfunded liabilities

North Carolina has a new trust fund to help pay down unfunded liabilities for the pension system and health-care costs, thanks to a law signed Monday by Gov. Roy Cooper.

The Unfunded Liability Solvency Reserve Act creates a reserve that will be funded through several sources, including General Assembly appropriations, overflows from the state's rainy day fund, or savings from refinancing of general obligation bonds. Between pension and health care, the state has $50 billion in unfunded liabilities, $35 billion in health care alone.

The solvency fund is believed to be the only one of its kind in the nation, according to state Treasurer Dale Folwell, who credited the General Assembly and the governor for their leadership. "Today, we begin to make a generational difference for all North Carolinians and lead the nation in addressing $50 billion in unfunded pension and health-care costs. Our office didn't create or discover these liabilities, but we have an obligation to fix them," Mr. Folwell, sole trustee of the $97.9 billion North Carolina Retirement Systems, Raleigh, said in a statement.