Garner Cleveland Record

Johnston schools chief rips North Carolina’s new pension law

Johnston County Schools Superintendent Ed Croom criticized a new state law that will force the county to pay more than $500,000 for his rising pension benefits.
Johnston County Schools Superintendent Ed Croom criticized a new state law that will force the county to pay more than $500,000 for his rising pension benefits.

Superintendent Ed Croom on Tuesday criticized a new state law that will force Johnston County to pay more than $500,000 for his rising pension benefits, an increase that came after the school board allowed him to convert his benefits to salary.

Croom defended the school board’s right to give him the contract they gave him and said his salary had not spiked.

“The anti-spiking law is flawed legislation,” Croom said during a meeting of the school board.

Croom’s comments came nearly a week after The News & Observer revealed that Johnston County taxpayers will be on the hook for $520,000 to pay for Croom’s pension when he retires. Croom, 50, will retire March 1, after seven years as superintendent and 21 years as a teacher and administrator, nearly all of that in Johnston County.

Croom’s 2011 contract allowed him to convert $44,000 of his annual benefits to salary. Those benefits included a car allowance, phone allowance and health insurance.

By making those benefits salary, that money counts toward the calculations of his annual pension.

That pushed his pension above a recently created state cap that is intended to prevent high-earning employees from inflating their pensions as they near retirement. And since Croom is retiring at a relatively young age, the cost of the changes is expected to be significant.

Most state and local pensions are based on an employee’s four highest consecutive years of employment. A 2013 News & Observer series, “Checks Without Balances,” showed some community college boards had converted tens of thousands of dollars in perks to salary for college presidents as they neared retirement.

The anti-spiking law was passed in 2014, It said that local agencies would be responsible for the cost of such spikes.

Board member Donna White said that the school board didn’t know about the anti-spiking law until recently. She said the board gave the same type of contract with the same benefits that it had given the superintendents who preceded Croom.

Board Chairman Larry Strickland was not willing to discuss the bill for Croom’s pension.

“I don’t have anything else to say to y’all,” he said.

Croom said when he and board member Keith Branch first heard about the anti-spiking law at a conference more than a year ago, he didn’t understand what it meant.

“It was crazy,” Croom said. “And I still don’t know that we know what we’re talking about. But it’s going to have a huge impact on school districts, county managers, city managers, college presidents, university officials and it needs to be fixed before it goes any further.”

When Croom announced his retirement in October, he said changes in state retirement law drove his decision. He referred to a special retirement fund state lawmakers first created in 2013 to support high earners whose pensions were likely to exceed a federal cap.

That cap had the potential to cost highly paid officials – school superintendents, university athletic officials, professors and administrators – tens of thousands of dollars in annual pension payments.

Lawmakers originally set up the fund to last until Jan. 1, 2015, but last year, state lawmakers extended it to Aug. 1 of this year. To take advantage of that extension, an employee would have to retire by that date.

“Well then you say, ‘Why don’t you keep working?’ ” Croom said. “Well, I probably would if I didn’t lose $250,000 over the next 10 years based on another piece of legislation that is terrible.”

Croom’s day wasn’t all spent defending his pension. At the meeting, he received the Order of the Long Leaf Pine, one of the state’s highest honors, signed by Gov. Pat McCrory.

Jonathan M. Alexander: 919-829-4822, @GarnerCleveland

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