Page 23 - FINAL WEST FOP BlueNote 2017 July August

FIRST ATTEMPT AT MAJOR OVERHAUL OF

RETIREMENT BENEFITS HAS BEGUN

By Jeff Gray – Legislative Agent

Ending government pensions evidence of people 20 to 35 years told the Committee that a secure
for future state employees and old being motivated bytraditional retirement system and health in-
teachers would make it hard for pensions or retiree medical cover- surance keeps talented teachers in
the state to fill jobs, numerous age so the committee was told. classrooms. "Not offering retiree
workers' representatives have “The State is paying for bene- health care is a travesty that North
warned State Senators as they dis- fits that don't help recruitment,” Carolina should not accept," he
cuss a proposal to limit retiree according to Senator Andy Wells, said.
benefits. Some Senate Republi- R., Catawba Co. New employees Richard Rogers, Executive
cans say the costs of having retir- won't appreciate retiree benefits Director of the N.C. Retired Gov-
ees on the State Health Insurance "until year 29," he said in commit- ernmental Employees Associa-
Plan and offering them a guaran- tee. State pensions for workers tion, was quoted as saying that
teed monthly income in retire- who retire after 30 years are 54 employees would not stay in their
ment is too big a financial burden percent of their final salaries. The jobs if they do not have retirement
for the State. Legislators want to average pension benefit is less benefits. The proposed changes
offer 401(k) plans rather than pen- than $21,000 a year, according to would end up increasing the
sions to future State employees, the State Treasurer's Office.
State's cost to replace and train
and stop giving them health cov- Employees contribute 6 per- workers, he said in a later inter-
erage in retirement. The bill at- cent of their pay to the pension view in the Raleigh News & Ob-
tempting to do so covers state em- system. The State and other em- server. "It's important for us to re-
ployees, teachers, and some local ployers have contributed an aver- tain career public servants," Rog-
government employees hired af- age of 4.5 percent over the last 15 ers said. The Fraternal Order of
ter June 30, 2018. The idea is re- years, according to the Treasurer's Police has maintained this same
ferred to as a “defined contribu- Office. Defenders of the State re- view for many, many years.
tirement system warned against
tion plan.” Some senators on the com-
No current employees or retir- ending it, saying a move to 401(k) mittee questioned whether the
ees would lose benefits under plans may not save money. A changes would be good for work-
Senate Bill 467. The bill's spon- 2015 report from the National In- ers. The bill says the State would
sors explained the rationale for stitute on Retirement Security contribute 6 percent to the 401(k)-
the bill in May and invited ques- found that costs went up and style plans in the first year, but
tions and comments at a commit- workers found it hard to retire in makes no assurances for future
tee meeting, but the committee three states that switched from years. "We could eventually have
did not vote. Taken together, the pensions to 401(k) plans. Addi- a scenario where the General As-
State pension and health plans tionally, shutting down the pen- sembly decides not to make a con-
have a claimed $60 billion un- sion plan would cost $350million tribution going forward," said
funded liability. The legislature's in the first year, according to the Sen. Jay Chaudhuri, D., Wake
nonpartisan staff did research into Treasurer's Office.
what millennials care about when Mark Jewell, President of the County.

they look for jobs and found no N.C. Association of Educators,

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