Group Will Assess the Need for Change in Public Retirement Systems

Raleigh, N.C. - On December 9, 2009, NCPBA Division President Randy Byrd was named as a member of the Future of Retirement Study Commission by State Treasurer Janet Cowell. The 13-member Commission, comprised of government employees and retirees, human resource experts, and private sector leaders, will proactively address the need for change by evaluating and making recommendations for the retirement benefits of North Carolina’s state and local government employees hired in the future.

The Commission will be chaired by Robert Clark, a national expert on retirement and pension issues who has a doctorate from Duke and is a professor of management and economics at North Carolina State University. Clark specializes in aging and labor economics and pension and retirement policies. He has served as a research director of the TIAA-CREF (Teachers Insurance and Annuity Association - College Retirement Equities Fund) Institute, is a senior fellow at the Center for the Study of Aging and Human Development, and is a member of the Pension Research Council.

“North Carolina is fortunate to have Robert Clark and this group of Commission members that bring such a wide range of expertise to this important issue,” stated Cowell. “This diverse group is committed to researching potential options to ensure a safe retirement for our public servants. Their work has the potential to be referred to nationally as our economy and workforce continue to change.”

The first meeting of the Commission will take place January 25, 2010, with the group working through the year and targeting the second quarter for initial findings. The department’s website will host a Study Along with the Commission section providing the public with the materials presented to the Commission and updates on discussions and events.

The current benefit design has been largely the same since 1963, despite significant changes to the workforce. Additionally, retirement systems across the country have started to attract national attention during the financial crisis and warrant increased attention as funding levels drop and many private sector employees have been forced to delay retirement.

As part of the commission’s work, the joint Boards of the North Carolina Retirement Systems has directed the Commission to recommend the retirement benefits that should be provided to future hires of state and local government in North Carolina. As part of this directive they provided guidance on what the Commission’s recommendation should seek to accomplish.  They are as follows:

• Provide adequate retirement income at a reasonable retirement age after a reasonable period of employment

• Provide a proper system for managing risk, including eliminating risk through pooling wherever possible

• Encourage employee behavior that best meets the workforce needs of the state and local governments

• Give control over retirement planning decisions to those best able to make those decisions

• Fund benefits in a sound manner through an appropriate mix of employee and employer contributions

• Comply with applicable laws, keep administration costs low, and be easy for stakeholders to understand

• Determine whether or not it is possible and appropriate to extend this benefit design to any of the existing employees.