From an editorial Tuesday in the (Raleigh) News & Observer:
The federal government puts limits on public pensions – for good reason. A pension is designed in theory to provide a measure of security for long and good work. It is not supposed to provide a retired worker with the same income received when he or she was working.
But in 1996, Congress gave public pension systems the chance to arrange for some retiring employees to get more than the standard as state systems found some employees bumping against the limit.
In 2013, North Carolina did just that, setting up a supplemental fund to pay some retirees a sum on top of their regular earned pensions. Presumably, this was to keep top employees working on, knowing they would earn higher pensions, rather than quitting when they hit the limit.
But in the vast majority of cases, public pensions in North Carolina are quite generous. And typically, those who are working and in a position to receive them are compensated beyond what they’d get in a pension if they kept working.
The big winner from the supplemental fund is former UNC-Chapel Hill Athletics Director Dick Baddour. Of his astonishing pension of $281,000 in 2014, some $64,000 came from the supplemental fund.
The state has a good system with a simple formula, and it should stay with that system for all employees. Setting up the fund might have been well-intentioned, but it has turned out to be a bad and increasingly costly idea.