Legislative Report #07-04

Report 07-04
February 16, 2007

GOVERNOR TO PRESENT BUDGET

Governor Easley will deliver the State of the State message and present the proposed budget for the 2007-09 biennium on Monday, February 19. The Governor will address a joint session of the General Assembly at 7:00 P.M..

The budget proposal is expected to include recommendations on salary increases for active state employees and teachers as well as Cost-Of-Living Adjustments for state retirees. Our Association has asked the Governor to propose an increase in the employer contribution rate for the retirement system (to 4.0%) and a retiree COLA equal to the rate of inflation or equal to the raise provided for active state employees, whichever is higher.

ROUNDTABLE GROUP PUSHES RETIREMENT BENEFIT INCREASES

Our Association, together with the N.C. Association of Educators, N.C. Retired School Personnel, and the State Employees’ Association of N.C. contacted every member of the General Assembly this week seeking support for our joint legislative goals. In a letter dated February 12, the four organizations urged the General Assembly to restore adequate funding of the Teachers’ and State Employees’ Retirement System (TSERS) in order to provide annual COLAs and other benefit enhancements. Specifically, the joint letter asked the 2007 General Assembly to:

• raise the employer contribution rate for TSERS from the current 2.66% of payroll to 4.0%.
• approve a retiree COLA equal to the inflation rate or equal to the raise granted to active state employees, whichever is greater.
• Increase the TSERS retirement accrual formula from the current 1.82% to 1.83%.

The General Assembly would have to appropriate an additional $154 million to the retirement system in order to fund the proposed 4.0% contribution rate. However, this would provide enough money to cover both the COLA and the increase in the accrual formula. We encourage our members to express support for these goals when you have the opportunity to contact your members of the Senate and the House.

LEGISLATIVE COMMITTEES APPOINTED

The appointment of House and Senate standing committees was completed this week. Generally, legislation involving retirement and health benefits fall under the jurisdiction of the appropriations and pensions committees. Following is a list of these key committees.

Senate Committee on Appropriations/ Base Budget
Co-Chairmen: Sens. Dalton, Garrou, and Hagan
Vice Chairmen: Sens.Albertson and Dannelly
Members: (A full list of this committee’s membership can be found on the General Assembly web page at www.ncga.state.nc.us).

Senate Committee on Pensions, Retirement, and Aging
Co-Chairmen: Sens. Dalton, Garrou, and Hagan
Members: Sens. Albertson, Atwater, Bingham, Brock, Clodfelter, Cowell, Dorsett, East, Foriest, Forrester, Jenkins, Malone, Nesbitt, Purcell, Queen, Stevens, and Swindell.

House Committee on Appropriations
Co-Chairmen: Reps. Adams, Alexander, Crawford, Haire, Jeffus, Michaux, Tolson, and Yongue.
Members: (See full committee membership list at the General Assembly web page.)

House Committee on Pensions and Retirement
Co-Chairmen: Reps. Bell and J. Harrell
Vice Chairmen: Reps. Coleman, Folwell, Holloway, McGee
Members: Hurley, McLawhorn, Tolson.

BILLS INTRODUCED THIS WEEK

One retirement- related bill, pertaining to the re-employment of retires local government employees, was filed introduced this week. A summary of the bill follows.

House Bill 213: Remove Local Retirement earning Cap
(Primary sponsors – Reps. Tucker, Underhill, and Wainwright)

The bill would remove the annual earnings cap that currently applies to local government retirees who are re-employed by an employer that participates in the Local Governmental Employees’ Retirement System (LGERS). The current annual earnings cap is the higher of: $26, 960 or 50% of the retiree’s last annual salary as an active employee. The bill has been referred to the Committee on Pensions and Retirement.