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Treasurer Cowell Urges Senate to Pass Retirement Legislation

FOR IMMEDIATE RELEASE

Treasurer Cowell Urges Senate to Pass Retirement Legislation

Bill Would Return 5-Year Retirement Vesting Period and Crack Down on Pension Spiking

RALEIGH, N.C.  – State Treasurer Janet Cowell today called on the North Carolina Senate to pass legislation that would return the state employee retirement vesting period to five years.  The vesting period, which is the amount of time before employees are eligible for retirement benefits, was increased to 10 years in 2011 over the Treasurer’s objections. The measure to return to five years passed the House unanimously June 18.

“This is the right thing to do for state employees and teachers,” Cowell said. “The 10-year retirement vesting period did not result in significant savings and made state employment less competitive with the private sector in total compensation.”

At today’s Council of State meeting, Treasurer Cowell discussed the vesting period and pointed out that without the change, the Governor would not be vested in the retirement system even if he served two terms.

The legislation, House bill 1195, would also allow 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.

The North Carolina League of Municipalities and the Association of County Commissioners support the bill.

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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.