Politics & Government

Top NC House Democrat: GOP ‘secret society’ out to alter retirement plan

House Democratic Leader Larry Hall, center, was flanked by Rep. Garland Pierce and Rep. Susan Fisher at a news conference on the state budget Thursday. Hall says Republicans are considering a major overhaul to the state retirement system, but legislative leaders say that won’t happen this year.
House Democratic Leader Larry Hall, center, was flanked by Rep. Garland Pierce and Rep. Susan Fisher at a news conference on the state budget Thursday. Hall says Republicans are considering a major overhaul to the state retirement system, but legislative leaders say that won’t happen this year. ccampbell@newsobserver.com

House Democratic Leader Larry Hall called a press conference Thursday to tell reporters that a Republican “secret society” is planning sweeping changes to the state employee retirement system.

Hall said he’s heard that legislative leaders plan to switch to a defined contribution retirement system, either as part of the state budget deal or a separate bill this session.

But both House Speaker Tim Moore and Senate leader Phil Berger said Thursday that the claims aren’t true.

“People have been talking for years about changing the retirement system to a defined contribution as opposed to a defined benefit plan,” Berger told The News & Observer shortly after Hall’s press conference. “I think people probably are still talking about that, but there’s nothing in the budget about that. I don’t see anything happening this session about it.”

Moore also said no changes are afoot. “The House wanted to maintain the current system we have, and there will be no change to that this year,” he told reporters.

State employees currently have a defined benefit plan that calculates retirement benefits based on their years of employment and their salary. A defined contribution plan – common in the private sector – would make set contributions for each employee to an investment fund, with benefits that vary based on how well the investment fund performs. Examples of defined contribution plans are 401(k) plans in which a portion of the employees’ contributions are matched by the employer.

A switch to defined contribution could reduce the state’s retirement costs, but it could also mean less generous benefits for retirees.

Hall said a change would “turn upside down the state of North Carolina and our public workers.”

“That means there’s no guarantee, you don’t have the comfort of knowing you’re in a system that has delivered for North Carolina,” he added.

He said any last-minute efforts to add retirement changes to the budget deal would be wrong.

“A small group of people in this legislature are deciding, without informing the vast majority of members, that this is being considered,” he said, calling the group a “secret society.”

“They have these secret meetings and these secret efforts. I don’t know if they have a secret handshake.”

Neither Hall nor other House Democrats at Thursday’s news conference would say who told them about the possible retirement changes.

“It was from one of the (budget) negotiators, that’s all I can say,” said Rep. Verla Insko, a Chapel Hill Democrat.

Hall said he hasn’t spoken to Moore about the issue but “feels strongly enough from talking to other members and hearing from folks on staff that this is going on. If it’s absolutely not happening, it should be clear from the statements of folks in leadership.”

Sen. Tom Apodaca, who chairs the Senate committee that oversees the state pension system, also denied any changes in the works.

“Unless Rep. Hall knows something I don’t, that’s not something he’ll find in the budget,” Apodaca said through a spokeswoman Thursday.

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