SEANC to Appeal Dismissal of Suit Against NC Governor

June 6, 2001 ( - The State Employees Association of North Carolina (SEANC) will appeal Judge Narley Cashwell's dismissal of its lawsuit challenging Governor Mike Easley's use of $151 million slated for the state's defined benefit retirement plan, to balance the state budget.

In his ruling on May 23 this year, Judge Cashwell, held that SEANC lacked standing to file the lawsuit and had failed to include all members of the retirement systems as “necessary parties’ to the lawsuit. Further, he added that SEANC had filed the lawsuit prematurely since Governor Easley had not yet spent the funds.

SEANC believes that these grounds are without legal merit and that it is entitled to a ruling on the principal issue of the case, that is Governor Easley’s authority to withhold the contributions. The association also hopes to obtain a ruling establishing its right to file a suit on behalf of its members.

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Letter of the Law

The association is particularly concerned that a letter from the retirement systems’ actuary to the state retirement director, which states that “the employer rate cannot be reduced effective February 1, 2001 in an actuarially sound manner’ was not taken into account by the court.

Further, the note goes on to say that the retirement plan was not being funded in an actuarial sound manner since the actual contributions will be less than the annual required contributions.

In his emergency budget declaration, the governor had declared that the diversion of retirement monies should not impair the actuarial integrity of the state retirement system and directed the Office of State Budget, Planning and Management to confirm with the State Treasurer that no damage will occur before using the retirement funds for purposes other than retirement.

– Camilla Klein      

See also:

NC State Employees Sue Governor

Judge throws out NC state Employees Lawsuit