End to pension ‘spiking’ worth support

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State pensions are a perk for government workers that many of us in the private sector would long to have for ourselves. We might not be able to control what our own workplaces offer, but we should at least be able to count on reasonable limits on the benefits for retired state employees.

Legislation sponsored in part by N.C. Rep. Jeff Collins, R-Nash, would add some of those reasonable limits.

Collins’ bill has passed both chambers of the N.C. General Assembly, but Gov. Pat McCrory has not weighed in on the legislation. Here’s hoping he sees the benefits of the proposal.

In recent years, a handful of education leaders have lobbied for contract changes that have greatly enhanced their pension benefits.

The restructuring has worked something like this: A community college president has a contract that pays a salary and also includes allowances for a car, travel and even housing. As the president approaches retirement age, he or she renegotiates the contract with the school’s board of trustees. The net worth of the contract remains the same, but instead of receiving separate allowances for some of the expenses mentioned above, the new contract does away with those perks and instead increases the base salary of the president.

Even though the president’s new contract isn’t costing any more per year, the real expense comes after the president decides to retire. At that point the pension benefit he or she receives is calculated based on a much higher rate of pay than the president was receiving when the housing and travel allowances were in place.

The result is a sweet deal for the president, but not so much for the pension fund or taxpayers.

Collins’ bill would put an end to that kind of pension “spiking.” It’s good common-sense legislation – a bill that deserves the governor’s signature.