February 19, 2015
FOR IMMEDIATE RELEASETreasurer Cowell Calls for Cost of Living Adjustment for Retirees
RALEIGH, N.C .– State Treasurer Janet Cowell today called on the General Assembly to fund a Cost of Living Adjustment (COLA) for retired teachers and state employees during the current legislative session. Cowell, who chairs the retirement board for the teachers and state employees system, reiterated that the strength of the pension and economic conditions warrant an increase for retirees receiving a state pension. With Cowell’s support, the board decided last month by a split vote to recommend a 1 percent COLA to the legislature.
“Over the long-term, COLAs are an important piece of retirement security,” Cowell said. “Knowing that there will be some cost of living adjustments reassures retirees that their quality of life will be maintained as the years go by.”
North Carolina has one of the most solid pension systems in the nation—one funded by investment earnings, by employee contributions, and by employer contributions set by the legislature. North Carolina’s legislature has with only one exception in 73 years set employer contributions, drawn from the state budget, to the level the system’s independent actuary determines is required to fully fund the system. Because of this history of fully funding the system and because of strong returns on the investments overseen by the Department of State Treasurer, the legislature can grant a 1% COLA and fully fund the actuarial required contribution while still spending $6.9 million less on this retirement system in next year’s budget.
Cowell said, “I am confident that lawmakers share the view that we have long-term pension obligations and I appreciate their support in making annual payments required to keep the system fully funded. A COLA in years when the system can afford it is part of prudent long term financial management.”
The board for the Local Government Employees Retirement System, which Cowell also chairs, unanimously voted last month to approve the maximum COLA allowed for local retirees, a 0.625% increase effective July 1, 2015. That COLA does not require legislative approval.
The North Carolina Retirement Systems, the formal name for the pension fund, is the tenth largest public pension fund in the country. It provides retirement benefits and savings for more than 900,000 North Carolinians, including teachers, state employees, firefighters, police officers and other public workers. For more information, visit www.nctreasurer.com