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Budget Amendment - Pension Liability
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INFORMATION CONTACT:
Jason May, Budget & Grants Management, Director, 704-283-3760
ACTION REQUESTED:
Adopt Budget Amendment # 6
PRIOR BOARD ACTIONS:
None.
BACKGROUND:
On July 18, 2025, Union County Sheriff’s Office received a Notice of Contribution-Based Benefit Cap Liability (CBBC). The notice states that due to the recent increases to a staff member’s compensation and the proximity of this compensation to the member’s planned retirement, the County owes an additional liability based on the NC Retirement System’s formula.
Pursuant to the North Carolina General Statutes the last employer of a member who retires on or after January 1, 2015, with an average final compensation (AFC) of $100,000 or higher (adjusted annually for inflation), is required to make an additional employer contribution to fund the increased cost to the NC Retirement System to pay for the member's retirement benefit if it is determined that the benefit is in excess of the CBBC.
The letter indicated that a liability for $278,311.35 will be due to the NC Retirement System no later than September 5, 2025. This liability amount is contingent upon timely receipt of the employer's final salary contribution summary report for this member and may be adjusted based on additional information that is received by the NC Retirement System.
FINANCIAL IMPACT:
Funds are available in the FY26 Personnel Contingency for the Sheriff’s Office, which was created during the FY 2026 Budget development process for anticipated expenses, such as overtime, retirement payouts, and pension liabilities.