MONROE, NC (WBTV) - Taxpayers in Union County will have to write a check for $512,867.01 to the state retirement system to help pay the retirement benefits of outgoing superintendent Dr. Mary Ellis.
Ellis is slated to retire on June 1, 2016.
Union County Public Schools received a letter from the Department of the State Treasurer, who administers the state retirement fund, seeking payment for the unexpectedly high costs of Ellis' estimated state pension caused by a jump in her salary late in her career.
Such an increase is known as a pension spike; a term used when highly-paid government executives see a spike in their benefits in their final four years of work that raises their annual pension in retirement.
Information supplied by UCPS shows Ellis saw a $12,000 salary increase starting with the 2014-2015 school year. Her pay jumped from $190,000 to $202,000, the district said.
The North Carolina legislature passed a law in 2014 that required public sector employers to make up the costs incurred by the retirement system related to pension spiking.
"Typically it's people in power or people who know people in power," Dale Folwell, a CPA and candidate for State Treasurer, said of those who spike their pensions.
"Unfortunately in many of these instances, the cost of pension spiking is being spread over all the folks out there who are serving North Carolinians, using their backs, using their hands, using their minds as law enforcement officers, teachers and so many other functions of state government," Folwell said.
Across the state, 34 other public sector employers have received bills from the treasurer's office for pension spiking.
The only employer who got a higher bill, though, was the Wilkes County School System, who was billed more than $580,000.
Wilkes County has joined with the Johnston County Board of Education in a lawsuit against the retirement system and its administrator challenging the 2014 law requiring the payment.
Johnston County has refused to pay a $435,913 bill associated with the early retirement of its superintendent.
A UCPS spokeswoman said the district will pay the retirement system's bill using money from the local employee retirement benefit account within the district's budget.
The district did not offer an explanation as to why it entered into a contract with Ellis and subjected it to the half-million-dollar payment.
Folwell, the candidate for treasurer, said the situation could be avoided by public sector employers with prior planning at the time of contract negotiations.
"Not only do you talk about what's happening in the front of the marriage but you have some discussion about what could happen at the end of it also," he said.