NC Court Rules Against Governor on Pension Plan Case

September 7, 2006 ( - A North Carolina Superior Court judge has ruled that Governor Mike Easley and other state leaders violated the state constitution by using pension money to solve a budget crisis.

The Raleigh News and Observer reported that state leaders diverted $130 million from the teacher and state employee pension plan to address the crisis in 2001. The judge did not order Easley to immediately repay the pension plan.

Easley and state attorneys argued the money was not technically taken from the plan, but was directed to other uses before reaching pension accounts, according to the news report. The governor and legislators are repaying the plan and have set aside $85 million for repayments in the past four years.

The court decision points out that the state constitution establishes the “inviolability” of state retirement system funds and says the funds cannot be used for anything other than retirement purposes. Lawyers for the employees said they would appeal for immediate repayment of the funds.

In a statement, according to the news report, the governor’s office said, “North Carolina has one of the best funded pensions in America, and Governor Easley will continue to make sure that every retiree gets the benefits that they have rightfully earned.”