N.C. Dep't of State Treasurer v. Riddick
| Decision Date | 03 November 2020 |
| Docket Number | No. COA20-224,COA20-224 |
| Citation | 852 S.E.2d 376 |
| Parties | NORTH CAROLINA DEPARTMENT OF STATE TREASURER, Retirement Systems Division, Dale Folwell, State Treasurer (in official capacity only), Steven C. Toole, Director of Retirement Systems Division (in official capacity only), North Carolina Retirement System Commission Board of Trustees (in official capacity only), Petitioners, v. Laura M. RIDDICK, Respondent. Laura M. Riddick, Petitioner, v. North Carolina Department of State Treasurer, Retirement Systems Division, Dale Folwell, State Treasurer (in official capacity only), Steven C. Toole, Director of Retirement Systems Division (in official capacity only), North Carolina Retirement System Commission Board of Trustees (in official capacity only), Respondents. |
| Court | North Carolina Court of Appeals |
Attorney General Joshua H. Stein, by Special Deputy Attorney General Katherine A. Murphy, for the Retirement System parties.
Robert F. Orr, Asheville, and Gammon, Howard & Zeszotarski, PLLC, Raleigh, by Joseph E. Zeszotarski, Jr., for Laura M. Riddick.
Riddick was employed by the North Carolina Department of Natural and Cultural Resources from 1990 until 1996. Riddick was elected the Register of Deeds of Wake County and served from 1 December 1996 until she resigned on 31 March 2017. Riddick filed for retirement benefits on 1 April 2017.
Riddick embezzled public funds in an amount exceeding $600,000 while serving as Register of Deeds beginning in 2010 through 2016. Riddick entered guilty pleas to six (6) counts of felonious Embezzlement by a Public Official in Excess of $100,000, in violation of N.C. Gen. Stat. § 14-92 (2019). Riddick was sentenced to an active term in prison of 60 to 84 months. Riddick was also ordered to pay restitution in the amount of $926,615, which was paid in full after sentencing. These underlying criminal convictions and ordered restitution are not before us on this appeal.
The Retirement Systems Division oversees the relevant retirement systems: Teachers’ and State Employees’ Retirement System ("TSERS"), the Local Governmental Employees’ Retirement System ("LGERS"), and the Registers of Deeds’ Supplemental Pension Fund ("RDSPF").
TSERS is a defined benefit pension plan. State employee members make contributions to the plan by deduction of six percent (6%) of their paycheck over the course of their careers. The State also makes a contribution. In order to retire with benefits of TSERS, the member must be either: (1) at least sixty years old with five years of vested membership, or (2) have completed thirty years of creditable service. See N.C. Gen. Stat. § 135-5(a) (2019).
A TSERS member's full retirement benefit is calculated as 0.0182, multiplied by a member's average compensation over the highest average salary for four consecutive years, multiplied by the number of years of creditable service. N.C. Gen. Stat. § 135-5(b19)(2) (2019). A reduced benefit is calculated by taking the above formula then multiplying a reduction factor from N.C. Gen. Stat. § 135-5(b19)(2) b, c (2019).
Similar to the requirements above, local governmental employees, who are employed by entities that participate in LGERS, become members of LGERS. As with TSERS, employees have six percent (6%) withheld from their pay during each pay period. Under LGERS, an employee is eligible to retire upon: (1) being at least sixty years old with five vested years of creditable service; or, (2) have completed thirty years of creditable service. N.C. Gen. Stat. § 128-27(a1) (2019). An employee in LGERS is also eligible for early retirement at a reduced benefit, if they are at least fifty years old and accrued at least twenty years of creditable service. Id.
Full retirement benefits are calculated as .0185, multiplied by the employee's average compensation over four consecutive years which create the highest average, multiplied by the number of years of creditable service. See N.C. Gen. Stat. § 128-27(b21)(2) a. If an eligible employee takes an early retirement, a reduced benefit is calculated under the same formula as above. See id.
Any register of deeds, who retires from LGERS or an equivalent locally sponsored plan with at least ten years of eligible service as a register of deeds, is entitled to receive a monthly pension from RDSPF. N.C. Gen. Stat. § 161-50.5 provides the pension amount is to be calculated by one share for each full year of eligible service multiplied by the total number of years of eligible service. N.C. Gen. Stat. § 161-50.5 (2019). Each share is calculated by determining the total number of years of eligible service for all eligible retired registers of deeds on December 21 of each calendar year. Id. Payment cannot exceed the maximum retirement allowance. Id.
N.C. Gen. Stat. § 128-34(b) allows an employee to transfer benefits accrued in TSERS into an LGERS account. This transfers the accumulated contributing interest and service credits to LGERS and terminates the employee's eligibility and participation in TSERS.
In February 2017, Riddick completed a form to transfer accrued membership service from her TSERS account into her LGERS account. By completing this transfer, Riddick acknowledged she would "lose all pending and accrued rights to any benefits" from her prior membership in TSERS. When Riddick filed for retirement benefits on 1 April 2017, she was over fifty years old and had accrued at least twenty years of creditable employment service in LGERS. Her age and years accrued qualified her for a reduced retirement benefit from LGERS. Riddick was also eligible for payments from RDSPF, because she also had accrued at least ten years of service as a register of deeds.
When Riddick retired, her 618 days of unused sick leave were converted to 2.5833 years of additional credited service. See N.C. Gen. § 128-26(E) (2019). As of 1 April 2017, Riddick had 20.3333 years of creditable service in LGERS, 6.1667 years transferred from TSERS, and the 2.5833 years of credited sick leave to total 29.0833 years of creditable employment service in LGERS.
N.C. Gen. Stat. § 128-38.4A(a) mandates a member of LGERS, who is convicted of a felony, must forfeit retirement benefits from LGERS, if the offense is committed while the "member is in service" and the felonious act is "directly related to the member's office or employment." N.C. Gen. Stat. § 128-38.4A(a) (2019).
The Retirement System parties determined both statutory conditions in N.C. Gen. Stat. § 128-38.4A(a) were met and reduced Riddick's creditable service to 16 years. The Retirement System parties concluded Riddick forfeited 4.333 years of membership in LGERS earned between 1 December 2012 and her resignation on 31 March 2017, all 2.5833 years of converted credited sick leave accrued at retirement, and 6.667 years of vested service transferred from TSERS to LGERS.
With only 16 years remaining after forfeiture, Riddick was ineligible to retire from LGERS prior to age 60 at a reduced benefit. Under the statute, Riddick lacked the minimum age to receive benefits or twenty years of accrued creditable service necessary for early retirement. Because Riddick was ineligible for immediate retirement from LGERS, she was also ineligible to receive immediate benefits from RDSPF.
The Retirement System parties ceased benefit payments on 25 September 2018 and assessed Riddick $126,290.28 due for overpayment of retirement funds from her retirement on 1 April 2017 until 25 September 2018. The return of Riddick's contributions, after deducting for taxes, resulted in a refund of $47,724.77, which was credited against the assessed overpayment, reducing the amount Riddick owed to $78,565.51.
Riddick filed a petition for a contested case hearing. The temporary ALJ concluded Riddick forfeited only 4.333 years of membership service in LGERS and 1.25 years of accrued service for unused sick leave, as of 1 December 2012, reducing her creditable service from 29.0833 years to 23.5 years. As Riddick retained over twenty years of creditable service, the ALJ ordered the Retirement System parties to recalculate Riddick's early retirement. The ALJ further concluded Riddick was entitled to payments from RDSPF from the date of her retirement until the date of the Division's final agency decision on 25 September 2018.
Both parties petitioned for judicial review of the ALJ's decision. The trial court applied the proper standard of review and affirmed the decision of the ALJ. Both parties timely appealed.
This Court possesses jurisdiction pursuant to N.C. Gen. Stat. §§ 7A-27(b) and 150B-52 (2019).
Riddick argues the trial court erred by: (1) concluding the forfeiture provisions of N.C. Gen. Stat. § 128-38.4A applies to her without the sentencing judge in the underlying felonies finding the aggravating factor under N.C. Gen. Stat. § 15A-1340.16(d)(9) ; (2) concluding she had forfeited her rights to receive RDSPF benefits after notification by the Retirement System parties on 25 September 2018; (3) violated her rights under the Constitution of the United States and the North Carolina Constitution by applying the forfeiture statute retroactively, and by taking her property without just compensation; (4) violated her rights under the Constitution of the United States and the North Carolina Constitution by instituting a cruel and unusual punishment; and, (5) reducing her converted sick leave to accrued service after 1 December 2012.
The Retirement System parties argue the trial court erred by: (1) crediting instead of forfeiting any accruals after 1 December 2012; (2) not forfeiting all of Riddick's unused sick leave converted to credited service in her LGERS account; and, (3) concluding Riddick was entitled to benefits from the RDSPF.
"It is well settled that in cases appealed from administrative tribunals, questions of law receive de novo review, whereas fact-intensive issues such as sufficiency of the...
To continue reading
Request your trial
-
Sharpe-Johnson v. NC Dep't of Pub. Instruction
...the credibility of the witnesses and the weight to be given to the evidence as the finder of fact." N.C. Dep't of State Treasurer v. Riddick , 274 N.C. App. 183, 852 S.E.2d 376, 382 (2020). Moreover, a reviewing "court applying the whole record test may not substitute its judgment for the a......
-
Sharpe-Johnson v. NC Dep't of Pub. Instruction E. N. Carolina Sch. for the Deaf
...witnesses and the weight to be given to the evidence as the finder of fact." N.C. Dep't of State Treasurer v. Riddick, 274 N.C.App. 183, 852 S.E.2d 376, 382 (2020). Moreover, a reviewing "court applying the whole record test may not substitute its judgment for the agency's as between two co......
-
Sharpe-Johnson v. NC Dep't of Pub. Instruction E. N. Carolina Sch. for the Deaf
...... . . ¶. 5 Petitioner was a career state employee employed by ENCSD as. an Educational Development Assistant. .... . [are] available to me on the ENCSD. Intranet and/or the NC Dept of Public Instruction's. website and/or upon request to my manager or ... fact." N.C. Dep't of State Treasurer v. Riddick, 274 N.C.App. 183, 852 S.E.2d 376, 382 (2020). Moreover, a ......