Convicted Officials Shouldn’t Get Public Pensions, Say North Carolina Lawmakers

Anger over a government worker who got a pension despite embezzling a small fortune in public money has sparked a push in the North Carolina legislature to limit retirement benefits to officials who have been convicted of crimes.

Government officials who are convicted of an offense—such as embezzlement or fraud—during their public service would give up pension benefits if they were not vested in the system by July 2007, according to the measure, which passed unanimously in a state House committee last week. Instead, convicted public workers would be able to receive only their contributions to the pension plan, plus interest.

Additionally, time rolled over after 2012 from previous employment or accrued through sick leave similarly would not be counted toward their retirement compensation, the bill said.

The legislation comes after a local government employee in the Wake County Register of Deeds office sued the state for withholding pension benefits after she made headlines in connection with $2.3 million that went missing during her time in office. Similar cases in the state’s Buncombe County stoked ire over corrupt former officials drawing pensions.

In 2018, former Wake County employee Laura Riddick pleaded guilty to six counts of embezzlement and was ordered to serve five to seven years in prison, though she was given a work release. She was also directed to pay $926,000 in restitution to the state.

However, Riddick sued the state after the Retirement Systems Division attempted to take back her pension, which amounted to $126,290 and was under the Local Governmental Employees’ Retirement System (LGERS).

The Retirement Systems Division Director Steven Toole said the pension was an overpayment given her crime and rolled back all years of service she earned under the LGERS system, as well as sick leave and six years of service accrued in previous employment under the Teachers & State Employees (TSERS) retirement system. Riddick was still entitled to contributions she made during her public service, as well as interest.

But in April 2019, the court decided that Riddick’s employment at TSERS should count toward calculations for her pension benefits, given that she had committed no crime under the previous employment.

In a statement in January 2019, state Treasurer Dale R. Folwell, who was also named in the suit, called on North Carolina residents to assist his department with detecting fraud from government employees.

“It’s important that felons who committed crimes while in service to the public aren’t allowed to continue taking advantage of the state by drawing pension benefits that they shouldn’t receive,” Folwell said in the statement.

“Any dollar that is inappropriately sent out is a dollar that can never be used for the benefit of law-abiding retirees,” he added.