THE
State Employees Association of North Carolina, SEIU Local 2008 P.O. Drawer 27727, Raleigh, NC • www.seanc.org 800-222-2758 • 919-833-6436 • Circulation 55,000
April 2013
• Vol. 31, Issue 5
Treasurer Pushes Minimum Retirement Age New state employees would have to work until 62 regardless of years of service by Jonathan
Owens
SEANC Assistant Director of Communications
Who the Proposal Affects All state employees who started working for the state on or after Aug. 1, 2011, would be affected by the proposal, which Cowell’s staff rolled out at a roundtable meeting with groups representing active and retired public employees, including SEANC, on Feb. 22. Employees would have to accept an asyet-undetermined reduced benefit rate if they retired after 30 years of service but before they turn 62. The treasurer’s staff suggested these moves would save costs and fight off threats of major changes to the plan, but failed to mention that this proposal also reduces the pressure on Cowell to meet the 7.25 percent return on investment currently required. Cowell has come under fire on several occasions for her failure to meet this requirement. Cowell Bypasses Retirement Systems Board Cowell’s staff also bypassed the Teachers’ and State Employees’ Retirement System (TSERS) Board of Trustees entirely and presented the plan to the House State Personnel Committee on Feb. 22 without any discussion by the TSERS board. SEANC lobbyists attended this legislative meeting and were shocked at the presentation. SEANC supports other parts of the proposal, including a reduction in the vesting period for state employees from 10 to five years and prohibitions on salary spiking — the practice of inflating salary usually during the final four years of employment to increase benefits paid.
Photo by Ardis Watkins
State Treasurer Janet Cowell took another swipe at state employees in February, pushing for a minimum retirement age for recent and future hires. After adding surcharges that would increase state workers’ State Health Plan premiums by up to $40 per month earlier in February, Cowell’s retirement systems division proposed setting a minimum retirement age of 62 regardless of years of service. SEANC Lobbyists Chuck Stone (left) and Mitch Leonard listen to State Treasurer Janet Cowell’s proposal.
SEANC’s Concerns with Proposal SEANC members oppose a minimum retirement age and in 2010 fought off efforts to set the minimum at 55. Young people who choose state service just after college or high school graduation would be most affected by the change. For instance, a worker who enters state service at 24 years of age would have to work 38 years to realize full retirement benefits. This change only targets employees who are TSERS members and would not apply to members of the General Assembly, the Judicial System or Local Government Retirement Systems, placing the state at a competitive disadvantage in recruiting and retaining employees. What’s Next? The proposed changes must be approved by the General Assembly in order to take effect. SEANC members should contact their representatives at 919-733-4111 to state their opposition to a minimum requirement age for state service. SEANC’s legislative affairs team will continue to monitor the issue and update members through the weekly Legislative Update, found under “Legislative Action” at seanc.org.
jowens@seanc.org