Politics & Government

Police Chief Putney’s retirement plan in limbo amid dispute with state treasurer

Charlotte-Mecklenburg Police Chief Kerr Putney’s retirement — and post-retirement — plans remained in limbo Thursday over a dispute involving North Carolina pension law.

The city announced this week that Putney would retire at the end of the year and return as chief two months later, staying through the Republican National Convention in August.

But a state law prohibits a government employee from collecting a retirement pension with the “intent or agreement, expressed or implied, to return to service.”

State Treasurer Dale Folwell, who administers state retirement plans, said that could affect other city employees who have retired with any expressed commitment to return to a specific job.

“That’s totally in violation of the law that’s been on the books for decades,” Folwell told the Observer Thursday.

City spokesman Jason Schneider said the city is talking to the state.

“We’re going to let the process play itself out,” he said.

In a statement Tuesday, the city said, “There is no intent to circumvent the law. The statute does not prohibit from hiring back a retiree, which is a widely accepted practice across the country.”

Attorneys familiar with pension law say the law makes a distinction between permanent and temporary employment. Given Putney’s plan to retire and come back for a limited time, they say the arrangement appears within the law. (Folwell declined to discuss Putney’s specific case and made clear he was speaking hypothetically.)

In business and government, retirees often come back to work part-time. State retirees, for example, can come back after a one-month break in service and work no more than 1,000 hours per year.

To Folwell, the issue is whether an employee has an agreement, “expressed or implied,” to come back, regardless of whether it’s temporary.

‘Hire-backs’

Putney might not be the only one caught up in the pension dispute.

Chris Kopp, a former CMPD officer and spokesman for the Fraternal Order of Police, said the department has had a “hire-back” program for several years. Under the program, former officers retire and return after 30 days and continue to work in the same or other capacities.

Kopp said CMPD has made such arrangements before an officer actually retires, which is what Folwell contends is illegal.

“What happened was officers, before they left the department, made deals to come back in certain specified roles,” he said. “That was a common practice. . . . These officers were under the full impression that the hire-back program was compliant with state law.”

Police pensions can be generous. Kopp said an officer with 30 years of experience, for example, can retire with annual benefits equal to 80% of their salary.

“Now these officers are worried,” Kopp said. “The state may request these officers pay back the retirement they’re receiving.”

A police spokesman did not respond to the Observer’s emails.

Folwell said it’s unclear what would happen to those pension benefits.

“That’s something that we’re going to have to determine,” he said. “That’s why we need the city to be forthcoming . . . There is a process by which people can be rehired but it cannot include expressed or written directives.”

Folwell said the law is based on a requirement from the Internal Revenue Service.

“We only have one goal here,” he said, “and that is to protect the tax status of a plan that touches 1 out of 10 adult North Carolinians.”

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Jim Morrill, who grew up near Chicago, covers state and local politics. He’s worked at the Observer since 1981 and taught courses on North Carolina politics at UNC Charlotte and Davidson College. To subscribe to The Observer, go to: www.charlotteobserver.com/jim.
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