Frequently Asked Questions
What are the rules on paying special separation allowances to officers who go back to work for another local government?
with John Phelps, the League's senior assistant general counsel
Q.
A retired police officer from my town is going to work for another local government entity. I understand that, according to state statutes, retired law enforcement officers who go back to work for another state department, agency or institution are no longer required to receive special separation allowance. Is my municipality obligated to continue to make payments toward this particular officer's special separation allowance once he goes to work for another entity?
A.
As one would expect, a number of questions have surfaced over the years regarding the details of administering the allowance payments toward retired officers.
G.S. § 143-166.42 requires local governments to provide a special separation allowance to retired law enforcement officers who meet specified age and service requirements. (Those requirements include having completed 30 years of service or attained 55 years of age and completed 5 or more years of service; not have attained 62 years of age; and completed at least 5 years of continuous service as a law enforcement officer). The statute does not set forth a complete structure for local government implementation of the special separation allowance, but rather mandates it by making the provisions of G.S. § 143-166.41 [the special separation allowance for state law enforcement] applicable to local governments by reference.
The statutes yield no definitive answer as to whether payments to a retired officer must cease if the officer becomes reemployed by another local government or by a state department or agency. However, based on several recent decisions made by our state appellate courts, we now have some guidance on steps a local government may take to establish rules in the event a retired officer is reemployed.
G.S. § 143-166.42 provides that “the governing body for each unit of local government shall be responsible for making determinations of eligibility for their local [retired] officers.” The scope of this language was first discussed in Bowers v. City of High Point , 339 N.C. 413, 451 S.E.2d 284 (1994) where the Supreme Court acknowledged that the statute “explicitly makes local government responsible for certain aspects of administering the special separation allowance.”
The provision was applied to the reemployment issue in Campbell v. City of Laurinburg , 168 N.C. App. 566, 608 S.E.2d 98 (2005). In the Campbell case, the city of Laurinburg had adopted a policy in 1991 providing that any future officer receiving a special separation allowance who then became employed by another local government would no longer be eligible to receive special separation allowance payments. The plaintiff challenged the city's authority to adopt the policy. The Court of Appeals, citing Bowers , held that “under its authority to determine eligibility according to section 143-166.42,” the city council had appropriately enacted the policy and that upon plaintiff's reemployment, he lost the right to receive future separation allowance payments.
More recently, in Wiggs v. Edgecombe County , 361 N.C. 318, 643 S.E.2d 904 (2007), the Supreme Court, affirming the decision of the Court of Appeals in the same case, [ Wiggs v. Edgecombe County , 179 N.C. App. 47, 632 S.E.2d 249 (2006)], held that the Contract Clause of the U.S. Constitution prohibits the retroactive application of a policy barring payment of the special separation allowance upon reemployment.
Based on the opinions in the cases mentioned above, it appears that a local government may enact a policy -- to be applied prospectively only -- providing that, under specified circumstances, special separation allowance payments may be terminated upon a recipient's reemployment. Under the holding in the Laurinburg case, the reemployment of the retiree by another local government or agency thereof is one of those circumstances. Other circumstances may be subject to litigation.
Any municipality considering adoption of a reemployment policy should consult with its attorney and make certain that any policy applies prospectively only.
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