Cabarrus County Board of Education v. Department of State TreasurerAnnotate this Case
In this dispute concerning the manner in which the cost of pensions for certain retirees should be funded, the Supreme Court held that the Administrative Procedure Act's (APA) rulemaking procedures bind how the Retirement System's Board of Trustees adopt "cap factors" under the anti-pension spiking provision at issue in this case.
In order to calculate the retirement benefit cap applicable to each retiree, the Act to Enact Anti-Pension-Spiking Legislation by Establishing a Contribution-Based Benefit Cap directs the Retirement System's Board of Trustees to adopt a contribution-based benefit cap factor recommended by an actuary, which the Board had traditionally adopted by resolution. Here, the Retirement System determined that Dr. Barry Shepherd's pension benefits were subject the contribution-based benefit cap. The trial court concluded that the Board of Trustees' adoption of the cap factor was void because the action was subject to rulemaking under the APA. The Supreme Court affirmed, holding (1) the Board of Trustees was required to adopt the statutorily mandated cap factor utilizing the rulemaking procedures required by the APA; and (2) the Retirement System erred by billing the Board of Education an additional amount relating to Dr. Shepherd's pension, in light of the Board of Trustees' failure to adopt the necessary cap factor in an appropriate manner.