The missing part of the buzz over the state retirement system
Published September 12, 2015
By Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, September 11, 2015.
House Minority Leader Larry Hall caused quite a stir at the Legislative Building this week by telling reporters that House and Senate budget negotiators were considering inserting a provision in the final budget agreement that would dramatically change the retirement system for teachers and state employees, shifting it from a defined benefit plan to a defined contribution system.
Senate President Pro Tem Phil Berger and House Speaker Tim Moore denied the issue was being discussed in the backroom budget talks, as did other powerful members of the Senate who have been part of the negotiations.
Berger did say that the changing the retirement system has been discussed in the legislative halls this session but not as part of the final budget.
Missing from the news stories was any mention of a provision that was part of the budget the Senate passed that would end retiree health benefits for teachers and state employees hired after January 1, 2016.
That would also be a dramatic change and was never debated in a committee or on the Senate floor. It was only discovered after the Senate had approved its spending plan.
And it has definitely been discussed in what Hall called the “secret society” that is now putting the budget together because it was part of the Senate budget and not included in the House plan. Negotiators have to decide if it will be part of the final agreement.
Hall rightly pointed out that making retirement benefits less generous would make it more difficult to recruit and retain state employees. Their salaries have long been below those available in the private sector but were competitive when it came to health care and retirement benefits.
Turning the state employee retirement plan to a defined contribution system would change that, as would the Senate’s plan to end health benefits for retirees. Both proposals deserve full and open debate and more attention from the folks covering the General Assembly.
