For Immediate Release
July 23, 2014
Treasurer Cowell Releases Statement on Passage of
Retirement Legislation HB 1195
Retirement Legislation will return 5-Year Retirement
Vesting Period and Crack Down on Pension Spiking
Raleigh— North Carolina State Treasurer Janet Cowell made
this statement following the North Carolina Senate’s final passage of
legislation (House Bill 1195) returning the teacher and state employee
retirement vesting period to five years and cracking down on pension spiking.
“I would like to thank the members of the General
Assembly for their hard work and broad bipartisan support of this legislation,”
said Treasurer Cowell. “In particular, Rep. Collins (R-Nash) and Rep. Ross
(R-Alamance) deserve thanks for their leadership that made this bill possible.
I also applaud Sen. Apodaca (R-Henderson) and Sen. Hise (R-Mitchell) for their
work in guiding this bill through their chamber. A 10-year vesting period
proved to be ineffective and inconsistent with human resource goals. A decade is
too long for teachers and state employees to have to wait to be vested in their
retirement system. By restoring the 5-Year vesting period, this legislation
allows the state of North Carolina to be more competitive as an employer
relative to other public and private retirement benefits. “
The legislation also allows the Department of State
Treasurer to crack down on pension spiking, the practice of retirement system
employers raising individuals’ pensions through large late-career pay raises.
An outside review on fraud, waste and abuse showed that this problem is
limited, but that the Department needed additional tools to control this unfair
practice.
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The North Carolina Retirement Systems, the formal name
for the pension fund, is the eleventh largest public pension fund in the
country. It provides retirement benefits and savings for more than 875,000
North Carolinians, including teachers, state employees, firefighters, police
officers and other public workers. For more information, visit www.nctreasurer.com.
