Governor McCrory Signs Legislation Protecting Teachers' & State Employees' Pensions | Eastern NC Now

    Press Release:

    Raleigh, N.C. – State Treasurer Janet Cowell, alongside bill sponsors Reps. Stephen Ross and Jeff Collins, joined Governor Pat McCrory at the State Capitol this morning for the signing of House Bill 1195.

    The law establishes a contribution-based benefit cap and allows members of the teachers' and state employees' retirement system and the local governmental employees' retirement system who leave employment within five years to receive a return of their contributions with accumulated interest.

From left to right: Rep. Collins, Governor McCrory, Treasurer Cowell and Rep. Ross
    "This law prevents North Carolina state employees from having to subsidize artificially inflated pensions of high earners at the end of their careers," Governor McCrory said. "It protects the retirement system from abuse and ensures state employees are rewarded for their important investments in our state."

    The law returns to a five-year vesting period for members of the teachers' and state employees' retirement system and the consolidated judicial retirement system who became members on or after August 1, 2011.

    "Returning to a five-year vesting period is a critical step in North Carolina becoming more competitive in recruitment and retention relative to other public and private employers," said Treasurer Cowell. "Furthermore, this law allows thousands more teachers and state employees to participate in one of the best performing retirement systems in the country."

    The law also makes a conforming change to the special separation allowance for law enforcement officers.

    "HB 1195 will eliminate the practice of pension spiking, bringing more integrity to the State Pension Plan," said Rep. Ross. "Spiking, while practiced by a few highly compensated employees, is an unfair cost to all other members of the State Pension Plan. This bill will also change the vesting period from 10 years to 5 years, which will attract and retain state employees. The 10 year vesting was impractical, inconsistent with HR goals and made our plan uncompetitive with the private sector. This is a step in the right direction to make our pension plan more efficient."

    "I'm very happy this bill passed for two reasons: pension spiking at the top is not fair to state employees. This bill protects them from that," said Rep. Collins. "Also, five year vesting is an important recruitment tool for the state and brings us in line with federal regulations and the private sector."

    The governor also signed House Bill 1033 into law this morning, which authorizes a county to impose a special assessment for repair of a dam. Rep. Ken Goodman was the bill's primary sponsor.

• Contact: Crystal Feldman
•     govpress@nc.gov