Pension benefit changes raise questions

0 Comments | Leave a Comment

North Carolina’s pension system is the envy of many an employee who works for a private company. For those who qualify, the plan offers a fixed monthly benefit to retired state employees for the rest of their lives. And for a handful of community college presidents, that benefit has just grown significantly larger.

There is nothing improper about the increases, but they have raised an eyebrow in the state treasurer’s office, as they should.

The N.C. General Assembly in 2010 removed the cap on community college presidents’ salaries, opening the door to pay increases from local governments.

But at around the same time, four community college presidents asked their local boards of trustees to convert allowances for housing, travel, phone and other expenses into salary.

In the case of Wilkes Community College President Gordon Burns, for example, converting those expenses into salary netted an increase of more than $80,000. His net pay didn’t change, since he was receiving compensation for those expenses, anyway. But the conversion to salary will mean an increase of about $52,000 per year in the pension benefit he’ll receive after retiring.

Presidents at Cape Fear Community College, Central Piedmont Community College and Sandhills Community College requested and received similar changes. State Treasurer Janet Cowell has asked leaders in the N.C. General Assembly to address the issue in the 2014 short session.

For state employees as highly paid as community college presidents, the pension plan already provides a lucrative benefit. Using accounting methods to up the ante is taking unfair advantage of the system.

We urge the General Assembly to listen to Cowell’s advice on this policy.