Inside NCRGEA’s Advocacy Goals

NCRGEA has many active programs and processes in place to achieve its annual goals, but to be even more effective, the Association needs the voice of its members to be heard in the General Assembly.

Letter to the Editor | State government retirees drowning in inflation

Tim O’Connell, Executive Director, North Carolina Retired Governmental Employees Association – March 9, 2023

More than 320,000 local and state government retirees are drowning in inflation. With a likely probability of another multi-billion-dollar surplus for the state, it’s time to do the right thing and provide inflation-fighting cost-of-living adjustments for these dedicated women and men.

The fact that everything costs more today is common knowledge. Over the past decade, individual purchasing power has declined by 29 percent. The basket of basic goods bought 10 years ago for $100 now costs $129. During this same period, cost-of-living adjustments totaled just 2 percent for state retirees and less than 1 percent for local government retirees.

This widening gap of lack of cost-of-living adjustments related to inflation hurts not only the retirees but the entire North Carolina economy. This is particularly true in North Carolina’s rural counties, where a higher percentage of retired public servants live compared to urban counties.

And yet retirees are good for the state’s economy. The National Institute of Retirement Security reports that in North Carolina, public pensioners support more than 49,477 jobs across all 100 counties and across a breadth of industries, from hospitality to healthcare to real estate. The value of this to the North Carolina economy is $8.1 billion a year and excludes the $1.2 billion this group pays in taxes to the state and federal government. The continued stagnation of cost-of-living adjustments will reduce this impact if not addressed.

While retirees remain grateful for the one-time bonuses the North Carolina General Assembly and Retirement System Trustees have provided over the past decade, such appreciated efforts will not abate the issue of short and long-term inflation. With the average retirement payment of approximately $1,650 monthly for retired public servants and the current 29 percent reduction in buying power adjusted for inflation, North Carolina has not seen this significant disparity in nearly 50 years.

Public sector retirees are forced to make hard decisions at the grocery store and at the pharmacy, and some struggle to maintain their own homes. Governmental retirees are our neighbors, friends, and parents. They educated our children, maintained our roads, cared for our loved ones, provided our families with clean drinking water, and were the first responders who put in long and often dangerous hours to keep our communities safe.

As we look at ways to bolster the resiliency of the North Carolina economy, serious consideration must be given to how it can be done in a way that provides dignity and quality of life to governmental retirees. As our legislators and elected officials make decisions in what is projected as another year of surplus revenues, they cannot forget our retired public servants.

Local Government Retirees to See a Spending Boost in 2022

Legislative Update

North Carolina’s local government retirees will receive a long overdue boost in their annual pensions. In late January the Local Governmental Employees’ Retirement Board, which governs the state’s local government pension system, approved an across-the-board 2 percent bonus for local government retirees.

There are more than 77,000 local government retirees in North Carolina who will receive the bonus in October 2022, as pursuant to state law. While local government retirees will receive their bonus, more than 234,000 state government retirees received a similar 2 percent bonus in their December 2021 checks, with another 3 percent bonus also coming in October 2022.

North Carolina Retired Governmental Employees’ Association (NCRGEA) represents both state and local government retirees and worked with state legislators, the State Treasurer, Governor’s office and both local and state retirement system boards to help insure that retired public servants would see a pension boost. NCRGEA Board of Directors President Vann Langston said he hopes the treasurer’s support of the 2022 bonus is only the beginning of future efforts to abate lost pension values for both local and state retirees.

“Retired public servants have suffered long enough,” Langston said. “Local government retirees have suffered the most, being overlooked for nearly a decade. Our association would like to see this as the beginning to restore retiree pension values to maintain quality of life,” Langston explained.

Normally, the local government pension system will only provide a cost-of-living adjustment through additional contributions from local governments. Langston explained that NCRGEA worked with the treasurer and retirement system trustees to have the $59 million bonus provided by investment returns rather than increased contributions by local governments.

“This bonus will be provided without placing additional hardships on our local governments,” Langston pointed out.

Historically, the state provided annual cost of living adjustments for both state and local retirees. However, as the Great Recession of 2009 crippled investment returns and lawmakers scrambled to cover the state’s bottom line, cost of living adjustments became few and far between. A decade’s long shift has occurred since, where lawmakers and other decision makers are now more inclined to provide one-time bonuses rather than recurring adjustments.

NCRGEA, with over 66,000 members, is the largest governmental retiree association in the United States. There are over 320,000 state and local government retirees and NCRGEA works for all of them.

Langston noted it was a team effort to help NCRGEA secure the bonus for local government retirees. He also pointed to efforts by the North Carolina League of Municipalities and the North Carolina City and County Management Association as key to successfully securing the bonus.

North Carolina State Treasurer Dale Folwell said the state must take a long view to make sure government retirees will have healthy retirement benefits for future generations.

“We are blessed to have had sufficient market returns to provide this benefit increase to our local retirees, in a fiscally responsible manner,” Folwell said. “Our job is to keep the retirement system solvent for this and the next generation of those who teach, protect, and serve.”

Stay tuned!

Vann Langston
NCRGEA Board Director