Raleigh, N.C. — Social Security benefits will increase 5.9 percent next year – the largest increase in 39 years – to help retirees keep up with inflation.
Retired state workers are calling on lawmakers to follow Social Security’s lead, saying their state pensions have continued to lose ground to inflation since the recession more than a decade ago.
Unlike Social Security, North Carolina’s state pension system isn’t linked to the cost of living. Instead, state lawmakers decide when and by how much to increase payments, and they haven’t approved a significant boost in about 12 years.
“Inflation is real,” said Richard Rogers, executive director of the North Carolina Retired Governmental Employees’ Association.
The Teachers’ and State Employees’ Retirement System serves nearly 234,000 retirees and their survivors, earning an average annual pension of almost $21,100. Rogers said state retirees’ pension checks have lost so much ground to inflation in recent years that they’re getting only 84 cents to the dollar.
“They’re living on fixed incomes, and, you know, the reality is they’re trying to make decisions between health care, food and living,” he said.
This year, with a budget surplus nearing $8 billion, the retired state workers are asking for a 2 percent permanent increase to their pensions.
“With such a surplus and so much excess funds available, they could have funded the [cost-of-living adjustment] without any problem at all, in our opinion,” he said.
Gov. Roy Cooper’s budget proposal included that 2 percent raise, plus a 2 percent bonus both this year and next year. The House budget had the one-time bonuses but no permanent raise, while the Senate didn’t include anything for retired workers in its proposed budget.
A final budget is being negotiated by legislative leaders and Cooper’s administration. House Speaker Tim Moore said a permanent increase is on the table during the budget negotiations.
“Frankly, I support, whether it’s a bonus or whether it’s an increase, I think we ought to do something,” said Moore, R-Cleveland. “Inflation, things are more expensive now, and so I certainly think that’s something we ought to do.”
Rogers said a bonus would be welcome. But it doesn’t help maintain pension values in the long run.