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HB 90

State and Local Government Retirees Cost of Living Adjustment.

2025-2026 Session Introduced by Eric Ager and 42 co-sponsors

A one-time 3% cost-of-living increase for eligible NC public retirement retirees, funded by a $250 million General Fund reserve, effective July 1, 2025.

Passed 1st Reading
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WeVote Research Nonpartisan
Bill Summary · HB 90

Summary — HB 90: State and Local Government Retirees Cost‑of‑Living Adjustment

Status: Passed 1st Reading (House); effective date in bill: July 1, 2025
Filed/Introduced: 2025 (various procedural entries)
Primary subject areas: retirement systems (TSERS, LGERS, CJRS, LRS), appropriations, state & local fiscal impact

Purpose / Intent

To provide a one‑time, across‑the‑board cost‑of‑living adjustment (COLA) for eligible retirees and beneficiaries of North Carolina public retirement systems and to appropriate funds to a reserve to implement the increase.

Key provisions

  • COLA amount: a 3.0% increase in retirement allowances (one‑time), effective July 1, 2025.
  • Covered systems: Teachers’ and State Employees’ Retirement System (TSERS), Local Governmental Employees’ Retirement System (LGERS), Consolidated Judicial Retirement System (CJRS), and the Legislative Retirement System (LRS). (Statutory citations in the bill amend the enabling statutes for each system.)
  • Eligibility / proration:
    • Beneficiaries whose retirement commenced on or before a specified cutoff date receive the full 3% increase (cutoff dates are set in the amended statutes; the bill provides for prorated increases for those whose retirement began after the cutoff but before June 30, 2025).
    • The bill includes provisions to prorate the 3% increase for retirees with more recent commencement dates based on months of benefit payments during the referenced period.
  • Appropriation: $250,000,000 (two hundred fifty million dollars) in recurring General Fund funds is appropriated for FY 2025–26 to the “Reserve for Retiree Cost‑of‑Living Adjustments” to implement the COLA.
  • Effective date: the COLA provisions become effective July 1, 2025.

Who is affected

  • Directly affected: current retirees and beneficiaries of TSERS, LGERS, CJRS, and LRS who meet the bill’s eligibility dates (including retired teachers, state employees, local government employees, judges/magistrates, and legislators’ beneficiaries).
  • Indirectly affected: the retirement systems (administration and actuarial funding), state budget (General Fund), and potentially future employer contribution rates depending on long‑term actuarial impacts.

Fiscal impact and considerations

  • Immediate appropriation: $250 million recurring from the General Fund for FY 2025–26 to a reserve to fund the COLA.
  • Net ongoing fiscal effect: the bill creates a recurring General Fund obligation in the near term; the long‑term actuarial impacts on system liabilities and employer contribution rates are not specified in the bill text and would depend on system actuarial assumptions, number of beneficiaries receiving the COLA, and whether the appropriation is treated as a one‑time payment to the reserve or as recurring support.
  • Administrative: retirement system boards and administrators must implement the increase and apply proration rules; actuarial and administrative costs could arise.

Procedural / timeline notes

  • Enacted language amends the statutory sections governing each retirement system to authorize the July 1, 2025 COLA and to set proration rules.
  • The bill includes the appropriation to the Reserve for Retiree COLAs for FY 2025–26.
  • Implementation requires administrative action by the respective retirement systems (calculations, payroll adjustments, notices to beneficiaries).

Issues to monitor

  • Clarification of cutoff dates and the exact base allowance date used to compute the 3% in each statute (the bill text references specific June 1 dates and different retirement‑commencement cutoffs for various systems).
  • Final actuarial analysis to determine long‑term cost and impact on employer contribution rates (state and local).
  • Administrative timeline and systems changes required to process prorated payments and apply the COLA on July 1, 2025.

If you want, I can:
- Extract the exact statutory paragraphs amended and the cutoff dates used in each system section; or
- Draft a short one‑page explainer for retirees describing eligibility and how the proration would be calculated.

Compiled from official sources — confirm details with the bill’s official record.

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