According to the Associated Press, the panel’s report doesn’t recommend drastic changes to benefits and plan expenses to the overall pension plan. Robert Clark, the commission’s chairman, said the current system is healthy compared to other states and the commission’s charge was to suggest ways the nearly 70-year-old system could meet needs of the work force for the next 50 years.
Clark said the defined contribution option is becoming common across private industry and reflects the reality that fewer people work for one employer throughout their career. Under the defined contribution plan being suggested, workers could take their accounts with them if they don’t retire as a government employee or could receive monthly payments at retirement through an annuity. The news report said, under the current pension plan, short-term workers only get a check back equal to their contributions, with perhaps some interest.
However, Ardis Watkins, lobbying director for the State Employees Association of North Carolina, said the defined contribution option could discourage smart, highly skilled people from staying longer in state government. He said the panel’s recommendations are “counterproductive to having a retirement system that does what it was intended to do when it was set up, and that’s to attract the best and the brightest employees,” according to the AP. Association President Charles Johnson served on the panel and voted against the option and the minimum age for full benefits.The commission comprised a 13-member panel of government workers, retirement and public policy advocates, and two lawmakers.