Time to stop NC institutions from artificially raising pensions

May 27, 2014 

A November series in The News & Observer thankfully got the attention of lawmakers. The series, “Checks Without Balances,” showed that four community colleges had used a change in state law to questionably boost pensions for their presidents, and now lawmakers are looking to close the loophole.

The law allows unlimited salary contributions to community college presidents so long as the money comes from individual counties, not the state, whose share is capped. So the colleges were converting things like housing allowances, annuity payments and travel allowances into salary money, which sometimes boosted annual pensions by as much as $50,000 because state pensions are calculated based on an employee’s highest pay. The presidents getting the benefit were generally nearing the end of their time at the colleges, and college boards apparently were feeling generous.

But that is not supposed to be the idea behind a pension, and in effect the conversions were giving these presidents huge pension boosts when their pensions were already quite generous.

Rep. Jeff Collins, a Rocky Mount Republican, has co-sponsored a bill that would curb the practice, putting responsibility for covering the excess over a standard pension payment on the employer. If the state – meaning all taxpayers and pensioners – isn’t footing the bill, it’s unlikely community colleges would be willing to do it.

This was a case of very well-paid people getting even more out of the pension system than their handsome pensions, most of them considerably more than that earned by average state employees. It’s likely the practice was the result of popular college presidents, in strong favor with their local boards, enjoying a nice little perk in appreciation. Private corporations are welcome to boost executive compensation all they like, with the approval of boards of directors. But this should not be the case with public institutions.

The truth is, lawmakers should take a closer look at overall compensation for all community college presidents – compensation boosted by counties, thanks to those friendly boards of trustees.

The General Assembly would do well to consider a system that would put some consistency in pay scales for top college officers. Some of the pay differences come about because community college boards are fiercely independent, and though there is an office overseeing the entire system, the organization of the schools is very much one that ties them to the communities in which they operate.

These jobs are not hard to fill. They are much coveted, and an opening typically brings a multitude of applications. The prospect of big bonuses or outsized pensions should not be needed to draw top talent.

Collins has the support of virtually every public employee group in addition to an association of cities and county commissioners. The bill deserves that support.

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