Union County Public Schools will file a lawsuit against the North Carolina Department of the State Treasurer in response to a bill it received from the department for more than $500,000 in payments related to the retirement of outgoing Superintendent Dr. Mary Ellis.
Ellis retired June 1. As a state employee with a long tenure in the Union County school system, Ellis will collect a pension from the state retirement plan.
At the end of this school year, after Ellis had announced her retirement but before she was set to start drawing her pension, UCPS got a bill for $512,867.01 from the state retirement system. The bill was to offset Ellis’ higher pension payout stemming from a spike in salary she saw during her last three years on the job.
Information supplied by UCPS shows Ellis saw a $12,000 salary increase starting with the 2014-2015 school year. Her pay jumped from $190,000 to $202,000, the district said.
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Such an increase is known as a pension spike, a term used when highly paid government executives see a spike in their benefits in their final four years of work that raises their annual pension in retirement.
The North Carolina legislature passed a law in 2014 that required public sector employers to make up the costs incurred by the retirement system related to pension spiking.
On Your Side Investigates was first to report the school district’s half-million dollar bill related to Ellis’ retirement. At the time, a school spokeswoman said the district would pay the bill using money from the local employee retirement benefit account within the district’s budget.
But on Thursday, an attorney for UCPS said the district would file a lawsuit against the Department of the State Treasurer challenging the invoice. UCPS’ lawsuit will be filed separately from another pension spiking-related lawsuit filed by two other school districts earlier this year, attorney Michael Crowell explained. The lawsuit filed by those districts could be merged with the UCPS suit in the future.
A spokesman for the Department of the State Treasurer did not immediately respond to a request for comment Thursday morning.
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