NC House budget gives better pension payout to one person, with the state paying for it
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North Carolina Budget
North Carolina is going through its budget process for the 2023-25 fiscal year. Here’s a look at coverage of the process and what’s in the budget from The News & Observer and The Charlotte Observer.
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The House budget bill moves one person into a more lucrative retirement system — at a cost of $642,000.
The budget proposal that came out Wednesday evening would move the executive director of the Conference of District Attorneys, a position currently held by Kimberly Spahos, into a different state pension plan.
The News & Observer obtained an actuarial note from the Retirement Systems Division, which is under the Department of the State Treasurer, explaining the cost.
The Conference of District Attorneys director would be moved into the Consolidated Judicial Retirement System, retroactive to August 2021, from the Teachers’ and State Employees’ Retirement System, according to the document. The accrual rate for the judicial system is higher than the state employees system.
The retroactive date of August 2021 is tied to Spahos’ hiring date. If the provision on page 276 of the House budget becomes law, it would place all future district attorneys conference directors in the new, better benefit-paying system as well.
According to the letter, the estimated cost of the move is $642,000 for the judicial retirement system, which would mean an annual cost that amounts to 0.04% of the judicial pension system’s payroll. Other people who are part of that retirement system include judges, district attorneys, clerks of superior court and public defenders.
The Conference of District Attorneys is made up of the state’s elected DAs, who meet twice a year. The director is responsible for developing programs and materials and consensus-building, according to its website.
The size of pension payments to the director of the Conference of District Attorneys depends on how many years the director works before retiring. However, the payments would be 60% higher based on the change in the budget if it becomes law, according to the state retirement system.
Spahos did not respond Wednesday evening or Thursday morning to an email asking about the budget change. Rep. Jason Saine, a House budget writer, declined to comment, saying he had little familiarity with the proposal.
Spahos’s husband, Chuck Spahos, is a liaison who lobbies for the Conference of District Attorneys, according to state lobbying records.
Legal challenge concern
The letter also makes note of a concern about a legal challenge.
Signed by Michael Ribble and Elizabeth Wiley of Buck actuarial and pension consulting firm, the letter includes a section labeled “Administrative Concern.”
“The Retirement Systems Division also notes to us that enacting benefits — especially retroactively — that affect only one person or a very small group of people can carry an additional legal risk to the System stemming from taxpayer litigation,” they wrote.
North Carolina’s constitution bans “exclusive emoluments.” As interpreted by the state Supreme Court in combination with other constitutional protections, that “embodies a ‘fundamental democratic principle: ‘Equal rights and opportunities to all, special privileges to none,’’” the letter adds, quoting John Orth in the North Carolina Law Review.
The Buck actuarial letter goes on to say that the results of the data “are not intended to be in favor nor against the proposed change.”
This story was originally published March 30, 2023 at 9:41 AM with the headline "NC House budget gives better pension payout to one person, with the state paying for it."
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