Monday, February 27, 2012

End pension perks for N.C. lawmakers

Tomorrow's editorial tonight:

We sometimes wonder why anyone would want to be a state legislator. It’s a part-time job, with not-so-terrific pay despite some extra money for expenses. For that pay, you make decisions that are regularly scrutinized and criticized by your colleagues and constituents, not to mention editorial boards.

And sometimes, in North Carolina, you even have to work after midnight.

But there’s at least one benefit available to N.C. lawmakers that most state workers don’t receive. State law allows legislators to include their annual expense stipend as part of their base salary when calculating the pensions they will receive upon retirement, the (Raleigh) News & Observer reported Sunday. Add that to a couple other pension perks, and lawmakers can receive pensions worth 30 percent more than they might have had otherwise. That’s quite the pillowy landing for some elected officials. Legislators should reconsider how appropriate it is.

A pension primer: Along with a salary of $13,951, lawmakers receive a stipend of $6,708 per year for expenses not including travel and per diem, which are paid separately. The House speaker and Senate president pro tempore get about $10,000 more in expense stipends to go along with higher salaries. Top deputies and party leaders also get a heftier stipend.

Lawmakers calculate their pensions by multiplying compensation by 4.02 percent and the total years of service. (Most state workers get 1.82 percent.) In 1994, legislators allowed themselves to include their expense stipends in pension calculations.

That means former House Speaker Joe Hackney, a Chapel Hill Democrat who is not seeking reelection, will receive $41,330 a year in pension, almost $13,000 of which comes from the stipend benefit, according to the N&O. Rep. Dale Folwell, a Forsyth County Republican who is retiring to run for lieutenant governor, will receive $10,218 a year, about 20 percent more than if his pension were calculated like most other state workers.

Folwell benefits from another perk: Legislators can calculate pensions based on the highest compensation received in 12 consecutive months, while most other state workers must take an average of four highest-paid consecutive years. So Folwell, who was speaker pro tem last year, was able to calculate his pension based on his new salary and stipend total of $31,771.

Folwell, who said he was unaware of the benefits given to lawmakers, told the N&O that he thought legislators should “be on the same system” as state workers.

North Carolina is one of only a dozen states that let legislators include stipends and per diems in pension calculations, according to a 2011 investigation by USA Today into the perks that state legislators receive across the nation. In at least three states, including South Carolina, lawmakers are advancing bills that would cut back or eliminate benefits that result in more lucrative retirement parachutes.

N.C. legislators should do the same. Yes, some lawmakers put more hours into their jobs than they get back in pay, but so do a lot of workers. If lawmakers want to avoid the disconnect they often lament with voters, they shouldn’t treat themselves differently, no matter how hard their jobs might be.


Anonymous said...

Wow, this was front page news. I suppose the little hypocrites who run the state don't want people to know about their scheme. Shame on every state law maker in NC what a bunch of thieving toads!!

Anonymous said...

If these lawmakers are people, by the people and for the people then they should not enjoy pensions that corporate employees have lost.

Anonymous said...

$41,330 a year? That's not much of a pension, especially if it's before taxes and other deductions are taken out.

How about let's see some Observer editorial outrage and whining about the pensions and perks of some of your uppity town corporate CEO buddies?

Anonymous said...

$41,330 a year is well above average for what a teacher in NC will retire on. So, if you feel compassion for lawmakers then feel real compassion for those who teach your children.

Anonymous said...

This pension will go away just like all state pensions for government workers because there will be no money for them. They were a ponzi to begin with and in the next five years they all will be gone.

WashuOtaku said...

Why only the legislators? Why not also post what the Governor gets down to the judges at the state level. I suspect the real reason is because its run by Republicans and we know the strong bias the O-pinion has against them.

Anonymous said...

Unbelieveable, I cannot fathom the silliness of citizens. We do away with corporate pensions for 401k's which are not better retirement tools, and then we let lawmakers keep the cherries/pensions. What can you do!

Southernboy JJ

Anonymous said...

You can not fix all the underlying perks the democrats have given themselves over the last 100 years in this legislature in one session.

Give the R's a break.

Jim said...

@6:14 p.m.

It's a pretty sweet pension for a part-time job! Presumably, they have done some retirement preparation on the basis of their primary occupation and, also from the primary source of income, they'll have SS or RRRA.

Anonymous said...

isn't this theft?

Anonymous said...

Does anyone know if the pension regardless of what it is will be;"Ordinary Income" or "Earned Income"? There will be QUITE A DIFFERENCE IN TAXES IF ORDINARY! Buttttttt, they may have taken care of that too with different rules for them!

Warren (Hombre) Drye

Anonymous said...

So pensions were okay when the democrats were in control and only now someone (?) chooses to expose them and rant at Republicans?