House Bill 564 would provide a 2% cost-of-living adjustment (COLA) for certain North Carolina public retirement beneficiaries beginning July 1, 2025. The increase applies to retirees and beneficiaries of the Teachers’ and State Employees’ Retirement System, the Consolidated Judicial Retirement System, and the Legislative Retirement System, with full or prorated increases depending on when the retirement commenced during the relevant period. The bill also directs that the adjustment be calculated based on the allowance payable on specified dates in 2024 or 2025, depending on the retirement system.
In addition to changing retirement benefit formulas, 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 to fund the increase. The act would take effect July 1, 2025, and would amend the cited retirement statutes to authorize the new benefit increase for eligible retirees.
HB564 would amend North Carolina retirement law in G.S. 135-5, G.S. 135-65, and G.S. 120-4.22A to authorize a one-time 2% COLA for eligible retirees in the state’s major public retirement systems, including teachers and state employees, judicial retirees, and legislative retirees. It would also create a recurring appropriation from the General Fund to finance the adjustment, increasing state pension-related spending and affecting the Reserve for Retiree Cost-of-Living Adjustments.
The bill’s overall tone is supportive of retirees and pension beneficiaries, reflecting a policy choice to provide inflation relief to public retirees. Because the bill was only referred to committee and no votes or transcripts are available, there is no recorded floor or committee debate to indicate broader legislative sentiment. Based on the text alone, the measure appears framed as a straightforward benefit enhancement rather than a controversial structural change.
The main likely point of contention is fiscal: the bill requires a recurring $106.2 million General Fund appropriation, which could raise concerns about budget impact, competing spending priorities, and long-term pension obligations. Another possible issue is equity among retirees, since the COLA is limited to beneficiaries meeting specific retirement-date thresholds and is prorated for some newer retirees. No formal objections or recorded debate are available in the provided materials, so these concerns are inferred from the bill’s structure rather than documented opposition.