Edgecombe schools fight state on pensions


Staff Writer

Sunday, September 15, 2019

A lawsuit by Edgecombe County Public Schools and three other school districts demanding refunds of money paid to the state is now stalled in Superior Court in Wake County.

The lawsuit, which was filed in November, names the Edgecombe County Board of Education, the Granville County Board of Education, the Lenoir County Board of Education and the Harnett County Board of Education as plaintiffs in the case.

The four school boards are suing State Treasurer Dale Folwell, the Board of Trustees of the Teachers and State Employee’s Retirement System, Steven Toole, the director of the retirement systems division, and the State of North Carolina.

The lawsuit revolves around money these districts were forced to pay into the state retirement program that were later ruled by the court as invalid charges. Edgecombe County specifically requested a refund of nearly $94,000. That refund was denied, which prompted the school board’s involvement in the lawsuit.

The issue began in 2014 when the N.C. General Assembly enacted a cap on the amount of benefits that the State Retirement System would be responsible for repaying based on employee contributions. At the same time, the law provided that retirees who were employed before Jan. 1, 2015, and whose benefits exceeded that cap, would not have their benefits reduced.

The difference would have to be paid by their last employer.

Deborah Stagner, attorney for Edgecombe County Public Schools, said the situation usually only applied to educators in high-level positions, such as superintendents.

As a result of the change in policy, Edgecombe County Public Schools was billed $93,894.42 to compensate for the difference in retirement funds needed to pay Karen H. Dameron. Dameron served in the school district for 10 years, retiring on July 1, 2015 as associate superintendent. The school district paid the amount billed in November 2015 from local funds.

Since then, four other school districts, including the Carrabus County Board of Education, filed a lawsuit stating that the new cap factor rules were invalid because they did not follow proper rule-making procedures. The lawsuit declared that the Board of Trustees for the Teachers and State Employee’s Retirement System did not publish a notice of the text of the proposed rule, failed to hold a public hearing, did not accept comments and did not “in any other way comply with the requirements of the law for the adoption of the rule.”

That lawsuit wound its way through the court system, and on Sept. 18, 2018, the Court of Appeals upheld a decision by the Superior Court in Wake County that declared these assessments “unlawful and void.”

Since that time, the cash-strapped Edgecombe County Public Schools has been trying to recover its money.

The original lawsuit by Carrabus County and the three other school districts is now being appealed and Edgecombe County’s lawsuit remains stalled until a decision is made.

Stagner said she hopes the state Supreme Court will hear the case by the end of the year.