North Carolina House Bill H564

North Carolina 2025-2026 Regular Session

• Introduced: 3/27/25
• Refer: 3/31/25

Caption

State Retirees Cost-of-Living Increase/Funds

Summary

House Bill 564 would provide a 2% cost-of-living adjustment (COLA) for certain retirees in North Carolina’s public retirement systems, including the Teachers’ and State Employees’ Retirement System, the Consolidated Judicial Retirement System, and the Legislative Retirement System. The increase would take effect July 1, 2025, and would apply to retirees whose benefits began on or before specified dates, with prorated increases for those who retired during the final part of the relevant period before June 30, 2025. The bill also directs that the adjustment be calculated by the applicable retirement boards based on months of benefit receipt during the covered period. To fund the benefit increase, the bill appropriates $106.2 million in recurring General Fund dollars for fiscal year 2025-2026 to the Reserve for Retiree Cost-of-Living Adjustments. The bill amends the statutes governing each of the three retirement systems by adding new subsections authorizing the COLA and setting the eligibility timing rules. If enacted, it would increase state retirement benefit obligations and require ongoing appropriations to support the added payments. The overall sentiment reflected by the bill itself is supportive of retirees, with the measure framed as a benefit enhancement rather than a restriction or reform. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of debate, but the bill’s title and structure suggest a straightforward effort to provide inflation relief to retired public employees and officials. No specific points of contention are documented in the provided materials. Potential areas of debate, however, would likely include the cost of the recurring appropriation, the fairness of applying the increase only to retirees meeting the bill’s cutoff dates, and the budget impact on the General Fund. Any opposition would most likely come from those concerned about recurring pension costs or the fiscal tradeoffs of dedicating state revenue to retiree benefits.

Impact

The bill would amend G.S. 135-5, G.S. 135-65, and G.S. 120-4.22A to authorize a 2% COLA for eligible retirees in the Teachers’ and State Employees’ Retirement System, the Consolidated Judicial Retirement System, and the Legislative Retirement System, with prorated increases for certain recent retirees. It would also appropriate $106.2 million in recurring General Fund money to the Reserve for Retiree Cost-of-Living Adjustments, increasing state spending and the long-term cost of retirement benefits.

Sentiment

The bill appears broadly favorable toward retirees and public pension recipients, as it is designed to increase retirement allowances to help offset inflation. No votes or committee remarks are provided, so there is no recorded opposition or support to measure directly, but the measure’s purpose suggests a positive reception among retiree advocates and affected beneficiaries. Any skepticism would likely center on fiscal impact rather than the policy goal itself.

Contention

The main likely points of contention are fiscal: the bill requires a large recurring appropriation from the General Fund, which may concern budget hawks and lawmakers focused on competing state priorities. Another possible issue is eligibility, since the COLA applies only to retirees whose benefits began by certain dates and provides prorated increases for later retirees, which could be viewed as uneven treatment among retirees. Supporters would likely emphasize inflation relief and retirement security, while critics would focus on cost and the precedent of recurring benefit increases.