A North Carolina teacher’s attempt to use an outdated state formula to buy back more than seven years of retirement credit has been denied by the North Carolina Court of Appeals. Richard D. Lemaster, Jr., a teacher who began his career in 1996, withdrew his contributions when he left his teaching position, ending his system membership and wiping out 7.3 years of retirement service credit.
Background
Lemaster rejoined the state pension system in 2011 and later spoke with a retirement system employee in 2018 about purchasing his past years of service. The employee advised him that most workers wait until they are close to retirement to execute a buyback, warning that the cost would rise by 6.5% each year. Lemaster chose to wait, reasoning that private investments would bring a better financial return in the meantime.
In June 2021, the North Carolina General Assembly changed the law, repealing the old calculation formula. The new rules, which took effect in July 2022, altered how the buyback cost was calculated and capped retirement service purchases at a maximum of five years. When Lemaster requested a new calculation in 2023, the state informed him he could only purchase five years of credit at a total cost of $51,660.83.
Court Ruling
Lemaster filed a contested-case petition with the Office of Administrative Hearings (OAH), alleging a breach of contract and arguing that the state unconstitutionally impaired his vested rights. An administrative law judge dismissed Lemaster’s petition, ruling that the OAH lacked subject-matter jurisdiction over the claims. A Union County Superior Court judge later affirmed that dismissal.
The Court of Appeals upheld those lower decisions, with Judge Valerie Zachary writing that administrative agencies like the OAH only have the powers explicitly given to them by lawmakers. The court ruled that the administrative court was the wrong venue for deciding whether the legislature’s new law unconstitutionally altered Lemaster’s contract rights.
Original reporting: Tampa Free Press — read the source article.
