State retirees upset Senate budget won’t boost their pensions to keep up with inflation

Retired teachers and state employees on Wednesday blasted the Senate budget’s failure to include a cost-of-living adjustment for state pensions.

Senate Republicans’ proposed budget, which passed committees Wednesday and is set for a vote on the Senate floor Thursday, includes raises for teachers and employees but offers no boost for retirees.

Retirees held a press conference to call for an increase, arguing that the state’s pension plan hasn’t kept pace with inflation and that makes it increasingly difficult for them to pay their bills. The state has about 300,000 retirees in its pension system.

Since 2009, pensions have increased just 2 percent – a 1 percent cost-of-living adjustment in 2011 and another 1 percent in 2013. Last year, the final budget included a one-time COLA of 1.6 percent, but that extra pay applied for a single year.

“We are in trouble, and it is up to this legislature to do something about that,” said Joan Bass of N.C. Retired School Personnel, which represents 10,000 retired school employees. “I urge the members of the House to show more compassion, more care, more appreciation for the many, many years that these 10,000 people have given.”

But Sen. Harry Brown, a Jacksonville Republican and the Senate’s top budget writer, says the state can’t afford an increase for retirees because of the state’s pension liability.

“We’ve just got to start figuring out how you manage this liability, because it’s going to put this whole plan in jeopardy if you don’t,” he said.

Asked about the cost of a cost-of-living increase, Brown said “I don’t have an exact number, but I know it’s in the millions.”

Sen. Joyce Waddell, a Charlotte Democrat, filed a bill seeking a 2 percent permanent cost-of-living adjustment, but it hasn’t received a hearing.

“I’m still going to push for that; it’s not the very end,” she said at the news conference. “We cannot afford to continue to live in poverty. We must do better.”

The House has been more willing to provide a COLA in its past budget proposals. And Gov. Roy Cooper’s budget proposal included $67 million to provide a 1.5 percent, one-time COLA.

Several retirees said their current pensions make it difficult to afford health care co-pays. “We have a lot of physical problems because we worked so hard those 30 years that we taught,” said Linda Gunter of Wake Retired School Personnel. “We’re your former teachers who got you where you are today. That’s why we stood up all those years, and we have foot problems.”

Gunter provided statistics showing that neighboring states have given retirees much larger raises since 2009. Virginia’s pension payments have increased 13.05 percent, while Georgia’s have increased 24 percent.

The Senate budget would also cut costs by eliminating medical insurance benefits in retirement for employees hired after July 2018. Insurance benefits for current state employees who retire in the future wouldn’t change.

“Most states have already done that,” Brown said. “We’re one of the few left that haven’t, because everyone else is running into the same problems we’re running into.”

The budget doesn’t, however, include a recent Senate plan to offer 401(k) plans rather than pensions to future state employees.

“We didn’t think that we needed to stick it in a budget without really thinking through it,” Brown said. “We wanted to be cautious and do it right.”

Together, the pension plan and State Health Plan have unfunded liabilities of $60 billion, according to proponents of scaling back benefits.

This story was originally published May 10, 2017 at 6:08 PM with the headline "State retirees upset Senate budget won’t boost their pensions to keep up with inflation."