Legislative Report #06-10

Report 06-10
June 30, 2006

BUDGET CONFEREES REACH AGREEMENT

The conference committee reached final resolution of the differences between the Senate and House versions of the amended budget for 2006-07 this morning. The conference report includes the following provisions affecting retired government employees and the retirement systems.

• 3.0% Cost-Of-Living Adjustment for retired teachers and state employees effective July 1, 2006. The budget includes a $27.1 million appropriation to supplement gains available in the retirement system. The additional appropriation raises the state’s employer contribution rate to 2.66% of payroll.

• $30 million repayment to the Teachers’ and State Employees’ Retirement System (TSERS) for the monies withheld from the system in 2001. This is the fourth installment of a 5-year repayment plan.

• The Conference Report does not address the COLA for retired local government employees. This decision is left to the Board of Trustees of the Retirement Systems. The Board in April recommended a 2.8% COLA for local retirees, using all available gains in the Local Governmental Employees’ Retirement System. The 2.8% COLA becomes effective on July 1, 2006.

• The monthly benefit for retired volunteer firefighters and rescue squad workers is increased from $163 to $165, effective July 1.

• The monthly benefits of retired North Carolina National Guard members are increased. The maximum monthly benefit is increased to $160.

BILLS APPROVED THIS WEEK

House Bill 1237: Change Local Government Retirement Board
(primary sponsor- Rep. Tucker)

This bill adds four members to the Board of Trustees of the Local Governmental Employees’ Retirement System: a city manager, a county manager, an active non-supervisory local government employee, and a retired non-supervisory employee. These new members will be appointed by the Governor.

The House concurred with the bill as amended by the Senate and it was ratified on Wednesday. HB 1237 has been sent to the Governor to be signed into law.

Senate Bill 1738: Long-Term Disability Amendments
(sponsor- Sen. Dalton)

The bill provides for a 36-month trial period during which persons receiving long term disability benefits could return to work. If the employee could not continue to work, they would be allowed to return to long term disability without having to be qualified again.

The Senate concurred with the bill as amended by House. It was ratified on June 30 and will be sent to the Governor.