Garner Cleveland Record

Bill Johnston County owes State Retirement System has decreased

The bill Johnston County taxpayers are carrying to help pay for Ed Croom’s pension has decreased, a spokesman for the State Treasurer’s Office said.

The bill the State Retirement System issued Johnston County schools was originally $508,000 but has since been lowered to about $436,000.

It is unclear exactly how the bill was decreased. School officials didn’t know the reason, nor did they ask.

“(The State Treasurer’s Office) just did this mysterious thing with their numbers,” said Michael Crowell, an attorney representing Johnston County School.

Brad Young, a spokesman for the State Treasurer’s Office, also declined to say why other than the bill had been recalculated recently.

The bill represents the amount above what the retirement system can pay Croom for his pension. The state legislature passed a law in 2014 that created a state cap that prevents high-earning employees from inflating their pensions at the end of their careers. The retirement system said Johnston County Schools exceeded that cap after Croom received multiple increases to his salary in the last few years of employment.

Among those increases were two $25,000 annuity payments Croom received in late 2014 and June 2015 to help offset losses he was expected to take due to another law that was expiring. The law created a special fund that supported high-earning employees from losing tens of thousands of dollars in pension.

With the law expiring, Croom was one of those in jeoprady.

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.

Meanwhile, he and others helped lobby state senators to get the law extended in time for him to retire. The law was extended and Croom was able to retire in March, having served enough time for full retirement status.

The extension meant that Croom never received the pension reduction that the $50,000 was intended to replace.

The News & Observer reported that Croom retired with the two payments despite never receiving the pension cut. A week after that story was published, the school system announced that Croom had agreed to give back the payments.

That was in March.

Young said the bill was recently recalculated and found that Johnston County owed less than it did in December.

School officials don’t believe the bill was decreased as a result of Croom giving back the two annuity payments.

“No, to our knowledge, the annuity payments were not pension eligible,” Tracey Peedin Jones, a spokesperson for the school system, said.

But no records have been produced showing that the annuity payments totaling $50,000 were not pension eligible. Therefore, if that was the case, the bill to Johnston County would be lowered when Croom gave the payments back.

The State Treasurer’s Office declined to confirm whether it was the result of Croom returning the annuity payments, citing personnel law.

When contacted last week, Johnston County Commissioner Tony Braswell said he was not aware that the bill had been lowered. He said school board members have still not discussed the issue with county commissioners.

“Any time that we can reduce the cost to the taxpayers, that’s good news,” he said. “Sorry we got in that position to start with, but I’m glad it’s been lowered. We should have never even been put in that position.”

School board chairman Larry Strickland declined to comment.

Regardless of how high or low the bill is, the school board has no plans to pay it. The school board has filed two lawsuits against the State Retirement System.

One was filed in the Office of Administrative Hearings. The school board believes that the retirement system did not follow correct procedure and “acted arbitrarily and capriciously” in its assessment of the Johnston County Schools.

The other was filed in Wake County Superior Court. The school board claims retirement system violated the state’s Administrative Procedure Act when it set the formula for determining the cap on retirement benefits and did not follow certain procedures when adopting a rule.

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