Recently retired superintendent Ed Croom has given back two $25,000 annuity payments he received to compensate for a pension cut that never occurred, the Johnston County school board said Thursday.
Croom received the payments in late 2014 and June 2015, and he had kept them despite a relevant change in state law. The legislature extended the life of a special fund that supports high earners whose pensions were likely to be reduced because of a federal cap; the extension meant that Croom never received the pension reduction that the $50,000 was intended to replace.
Croom had lobbied a state senator for an extension of that fund, known as a qualified excess benefit arrangement, or QEBA. The extension was included in last year’s state budget, and it meant Croom would not take a pension hit if he retired by Aug. 1, 2016.
Croom’s retirement began Tuesday. In a short news release on Thursday, the school board said Croom had agreed to return the money. The announcement came after The News & Observer reported the annuity payment perk last week.
“In ongoing conversations with Dr. Croom, he realized the extension of the QEBA law in late 2015 eliminated the need for the payments made by the Board of Education in his last contract extension,” the board’s statement read. “Upon the request of the Board to return the funds that were placed in his annuity, and with Dr. Croom’s prior considerations to do so, Dr. Croom promptly remitted the funds to the Board of Education.”
No interviews granted
Last week, The News & Observer reported Croom had received a single $25,000 payment. A school district spokeswoman, Tracey Peedin Jones, had originally said Croom had received two payments but later told the N&O it was only one, and that he would not accept a second for the current fiscal year.
Croom and Art Stanley, the schools’ chief finance officer, have declined numerous interview requests to discuss Croom’s pay and pension.
Croom, 50, won the $25,000 annual payments as part of a contract extension the board approved in late 2014. The contract did not specify how much money he would receive, and only said he would “receive an increase in his compensation to reflect the changes in the retirement law...”
The contract had no provision that required Croom return the money if he did not take a pension hit.
At that same meeting, the board approved increasing annual annuity payments from $3,000 to $5,000 for Peedin Jones and Oliver Johnson, the assistant superintendent for student services, so that they received the same as the six other senior staff, Peedin Jones said.
A $508,000 bill
Croom’s $25,000 annual annuity payment was among numerous other perks the school board had given him over the years that are now causing heartburn for the county.
Roughly $44,000 in other benefits that Croom was allowed to convert into pay helped trigger a big pension bill for Johnston County. The state treasurer recently told the county the cost would be $508,000, a bill the school board has said it will challenge.
That sum represents the amount above what the state pension system can pay Croom based on a new state cap meant to hold down pensions that rise quickly – and sometimes artificially – near the end of an employee’s career.
At least 27 other government agencies also received bills, but the $508,000 bill for Johnston County was by far the highest. The bills totaled $2.9 million.