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Lawmakers Consider Changes to Retirement Options, Facing Strong Opposition [UPDATED]

Elizabeth Yelverton | NCASA Legal Affairs and Policy Manager

[UPDATED 12/10/18]*

State lawmakers are currently considering a bill that has been drawing statewide concern from state employees and educators due to its proposed elimination of popular retirement options for future state retirees.

SB 117 was withdrawn from the House Rules Committee, where it had sat since June, and was quickly scheduled to be heard Monday in the House Committee on Pensions and Retirement. During the Committee meeting, lawmakers proposed a Committee Substitute, which added controversial provisions from HB 1055, a bill which was vetoed by Governor Cooper last legislative session. SB 117 was ultimately passed in Committee, over the objections of Democrats, who view the bill as unconstitutional due to its proposed removal of promised retirement benefits.

The provisions most worrisome to upcoming retirees include the removal of retirement Option 6-2 and Option 6-3, both of which allow members to return or “pop-up” to the maximum retirement allowance if the member’s designated beneficiary predeceases the member. Unlike the original HB 1055, the bill does not include the removal of Option 4: Social Security Leveling. These provisions would apply only to members who retire on or after January 1, 2020.

The bill also provides that the retirement options will only be removed if lawmakers override the Governor’s veto of HB 1055—a feat which many lawmakers are viewing with skepticism; however, certain provisions of SB 117 will still become effective if the bill passes and the veto of HB 1055 is not overridden. Such provisions include clarifications to laws regarding pensions for impeached judges and felony forfeiture laws, a payment plan provision for charter schools planning to withdraw from TSERS, as well as clarifications regarding anti-pension spiking and benefit cap factors.

The bill still has to clear the full House and then go back to the Senate for a vote of concurrence on the changes made to the bill in the House. NCASA members who have concerns about the potential passage of this bill should contact their/your House and Senate members and urge it be held back and not pass prior to final adjournment of the special legislative session. NCASA is closely following this bill at the General Assembly and will provide updates as further developments are made. 

* In a previous version of this article, which was distributed in our weekly e-newsletter on Dec. 6, NCASA reported that SB 117 contained certain anti-pension spiking provisions when these provisions were actually passed by legislators last session. If passed, SB 117 will not substantively effect nor enact any pension spiking laws. We apologize for this error and will continue to work diligently to provide our members with the most accurate, up-to-date information available. For any further questions, please contact NCASA through the information listed below. 

Elizabeth Yelverton