Raleigh, N.C. — As state House and Senate budget writers work on a final compromise, retired teachers and school workers came to the legislature Wednesday to call for a cost-of-living increase to their pensions.
Cost-of-living adjustments for retirees, or COLAs, are one of the key differences between the House and the Senate budgets. The House plan included a 1.6 percent increase, while the Senate plan had no COLA at all.
Retirees say the state can and should do better. They say most of the cost of any COLA is covered by investment returns from the state pension plan, not from the general fund. They believe the plan can afford an increase of at least 2 percent.
State retirees have seen COLAs of just 2 percent since 2009. Meanwhile, said Sen. Joyce Waddell, D-Mecklenburg, herself a retired educator, the Consumer Price Index has increased by more than 12 percent, and health care and health insurance costs have risen even faster.
Waddell said retired teachers and state employees had put 6 percent of their salary every month into the pension fund.
"They always contributed, and they were told when they started off many years ago that you would take care of them, that the funds would be here for them," she said.
Retiree Linda Gunter said many retirees have had to take second jobs because they cannot get by on their pensions. For retired school employees like cafeteria workers or teaching assistants, the situation is even more dire.
"We have people making $1,000 or maybe less as a pension, and they're really struggling," Gunter said. "We should be a priority, not a liability."
"I’m of the generation that had my salary frozen for three years," said retired Surry County teacher Gloria Lawrence, "and now I feel like I’m getting messed with all over again."
But Senate budget writers say liability is what they're most worried about. They say they've been funneling hundreds of millions of dollars into the pension plan in recent years to address the need to pay for future retiree health insurance costs. Adding a COLA from a fund that already has unfunded liabilities, they say, would be fiscally irresponsible.
House and Senate leaders have just 15 days to complete their compromise spending plan before the end of the fiscal year. Rep. Becky Carney, D-Mecklenburg, a conference committee member for House Democrats, said House leaders do understand retirees' plight.
"This is one of our issues that we will hold out for," Carney said.