A presidential and gubernatorial election year means lots of uncertainties, especially from an economic and investment perspective. At both the national and state levels, voters are tuned into proposed plans from respective candidates on retirement benefits and social security.
I recently read one in three Americans don’t have any retirement savings. Knowing this statistic, it makes sense that planning for retirement has become a significant stressor for many – those nearing retirement, in retirement and even Millennials.
By 2034, it’s anticipated our social security system will no longer be able to distribute comprehensive benefits. The funds will just not be there.
So what does this mean for retirees in North Carolina, particularly governmental retirees?
We need to advocate for keeping the defined-benefit system, versus changing it to a defined-contribution system. We need to encourage legislators to continue funding the State Health Plan to guarantee government retirees an 80/20 equivalent healthcare plan.
Last but not least, securing a cost of living adjustment is essential. The rate of inflation has increased at 12 percent over the last eight years, with state retirees receiving a two percent COLA and local government retirees receiving only .83 percent. The 1.6 percent bonus awarded in the latest General Assembly session to state and teacher retirees is appreciated, but not sustainable. Local government retirees’ received a .105 percent COLA. Local government pensions are on average $17,000, and teacher and state government retirees receive on average $20,500.
An improved economy has provided excess revenue collections for local governments and the state. With the economic recovery, local and state governments are now in a position to provide reasonable COLAs in support of their retirees.
The North Carolina Retired Governmental Employees’ Association receives phone calls from government retirees struggling on whether to fill a prescription or put food on the table with their fixed incomes. These government retirees are teachers who have educated our children; they’re policemen, firemen, EMS and highway patrolmen who have protected us; they’re public utility workers who have helped provide us with safe drinking water and the list goes on. They have worked hard, and NCRGEA is working hard to ensure they receive the benefits promised to them for their service to the state.
Now, it’s time for our state’s government to step up to the plate and fulfill their promises.
Executive Director, NCRGEA