Does a Superior Court or Appellate Court judge who took the bench before January 1, 1974 but retired after that date get later increases to keep his retirement at two-thirds of the current salary paid to the office he left?
Plain-English summary
E. T. Barnes, Director of the Retirement Systems Division within the Department of State Treasurer, posed three related questions about judges who took the bench before January 1, 1974 (the effective date of the Uniform Judicial Retirement System, Article 4 of Chapter 135) and retired afterward. The shared puzzle was whether the pre-1974 statutory rule (a two-thirds-of-current-salary tracking benefit, under G.S. 7A-51 and 7A-39.2) survived into the post-1974 system as a continuing entitlement to post-retirement increases.
The 1983 AG answered no to all three questions. The reasoning rested on a careful parsing of the savings clause in the new statute.
G.S. 135-58(c) protected pre-1974 judges by saying their retirement allowance "initially payable" upon retirement could not be less than what they would have received under the old Chapter 7A system. The word "initially" was decisive. The savings clause locked in a floor at the moment of retirement, but did not extend that floor into a continuous tracking guarantee. Once the judge retired and received the higher of the two calculations, the post-retirement adjustment rules of the new Uniform Judicial Retirement System took over.
The new system did not include any automatic adjustment tied to the salary of the sitting judge. Post-retirement increases came from one of two places: a general adjustment built into the Uniform Judicial Retirement System itself, or a specific appropriations-act adjustment passed by the General Assembly. A judge whose initial benefit was calculated under the old two-thirds formula could not, after retirement, claim a continued share of his successor's pay raises, longevity payments, or Senior Resident Superior Court Judge supplements.
The opinion also addressed a specific question about Section 221 of Chapter 761 of the 1983 Session Laws (the biennium appropriations act). That provision authorized a July 1, 1983 increase for beneficiaries on the retirement rolls as of July 1, 1982. A judge who retired August 1, 1982 was not on the rolls on July 1, 1982, and so was not eligible.
The constitutional question (does this scheme diminish a judge's salary in violation of Article IV, Section 21 of the North Carolina Constitution?) was raised and answered. The constitution protects against reduction in the amount payable while the judge is in office, not against later changes in the formula for calculating post-retirement benefits. Citing Harrill v. Retirement System and Bridges v. City of Charlotte, the AG treated retirement allowances as deferred salary, but a change in formula was not equivalent to a reduction in the deferred amount the judge had earned.
Currency note
This opinion was issued in 1983. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Uniform Judicial Retirement System has been substantially modified over the decades. Specific post-retirement adjustment mechanisms, salary supplements for Senior Resident Superior Court judges, and longevity payments have all been restructured. A retired judge's current entitlement depends on the version of the system in effect at the time of retirement and on subsequent legislative adjustments; consult a current statutory compilation and the Retirement Systems Division.
Historical context: what the AG concluded
The 1983 opinion is a textbook example of how the "initially payable" clause of a retirement savings provision shapes the long-run benefit structure.
It read "initially" strictly. The savings clause in G.S. 135-58(c) protected pre-1974 judges by ensuring their first retirement payment was no less than the old system would have produced. The word "initially" was treated as a temporal limit on the protection. After the first payment, the new system controlled.
It contrasted the old and new systems' design. The old judicial pension (G.S. 7A-51 for Superior Court, G.S. 7A-39.2 for Appellate Court) tied the retired judge's benefit to the salary of the sitting judge through a two-thirds formula. The retired judge automatically received raises when his successor received raises. The new Uniform Judicial Retirement System did not adopt that auto-tracking design; it used a fixed initial benefit with separate adjustment mechanisms.
It treated District Court judges differently. District Court judges had been members of the Teachers' and State Employees' Retirement System before the new judicial system was created. Their benefits under the new system were higher than the old system would have produced, so the savings-clause floor was not operative for them.
It split the constitutional question into amount versus formula. Article IV, Section 21 protects against diminishment of a judge's salary while in office. The AG treated this as protection of the amount actually payable during service, not as a guarantee that a particular post-retirement formula would continue. Retirement allowances are deferred salary (per Harrill and Bridges), but the deferred amount is fixed at retirement; subsequent formula changes do not retroactively diminish the in-office salary.
It cabined the Section 221 question. The 1983 appropriations act provided a post-retirement increase for beneficiaries on the rolls July 1, 1982. The August 1982 retiree missed the eligibility date by a month. The opinion did not stretch the appropriations-act language to cover the close-in retiree.
Background and statutory framework
Before January 1, 1974, judges of the appellate and superior courts retired under provisions of Chapter 7A. G.S. 7A-51 provided that a qualifying Superior Court judge would receive "two thirds of the annual salary from time to time received by the occupant of the office from which he retired." G.S. 7A-39.2 was the parallel for appellate judges. The "from time to time" language is what produced the salary-tracking effect: when active judges got raises, retired judges got proportional raises automatically.
District Court judges were not part of the judicial pension under Chapter 7A. They participated in the Teachers' and State Employees' Retirement System, which had a different benefit formula.
The 1973 Session Laws created the Uniform Judicial Retirement System, codified as Article 4 of Chapter 135 of the General Statutes, effective January 1, 1974. The new system covered all judges and justices in office on the effective date and all judges and justices taking office afterward. G.S. 135-58(c) was the savings clause: for judges in service immediately before January 1, 1974, the initial retirement allowance could not be less than what the old system would have produced.
Post-retirement adjustments under the new system came either from internal adjustment provisions or from specific appropriations-act increases. Section 221 of Chapter 761 of the 1983 Session Laws was an example of the appropriations-act mechanism, providing a July 1, 1983 increase for beneficiaries on the rolls July 1, 1982.
Article IV, Section 21 of the North Carolina Constitution provided that "the salaries of Judges shall not be diminished during their continuance in office."
Common questions
What is the practical difference for a judge who retired after 1974 under the old salary-tracking formula?
The judge received an initial benefit calculated under the old two-thirds formula (because that was higher than the new formula). But the benefit did not move up automatically as the sitting judge's salary moved up. The retired judge would receive a fixed amount, adjusted only when the General Assembly passed an appropriations-act increase or when the Uniform Judicial Retirement System triggered an internal cost-of-living adjustment.
Does this mean the retired judge's purchasing power eroded over time?
In practice, yes, unless and to the extent the General Assembly provided post-retirement increases. The contrast with the old salary-tracking formula is that automatic real-value maintenance was lost; protection against erosion depended on episodic legislative action.
Why was the August 1982 retiree denied the Section 221 increase?
The increase was structured to apply to beneficiaries "on the retirement rolls as of July 1, 1982." Eligibility was anchored to the July 1, 1982 snapshot. A judge who retired August 1, 1982 was not on the rolls on July 1, 1982. The opinion did not entertain an argument for prorating, equitable inclusion, or "essentially eligible" treatment.
What does Article IV, Section 21 actually protect?
It protects against reduction of the amount of money payable to a judge during the judge's continuance in office. The AG read it narrowly: the formula for calculating post-retirement benefits is not the same thing as the in-office salary. Changing the post-retirement formula does not diminish the in-office salary.
Can a retired judge sue for continued automatic increases tied to a successor's pay?
The 1983 opinion's view was that no such entitlement exists once the initial-benefit floor has been satisfied. A retired judge who was a pre-1974 judge and chose the better calculation at retirement would have no statutory hook for ongoing two-thirds tracking. The opinion does not address whether a contract-clause or due-process challenge might succeed under particular facts.
Source
Citations
- N.C.G.S. § 7A-51
- N.C.G.S. § 7A-39.2
- N.C.G.S. § 135-58(c)
- Section 221, Chapter 761, 1983 Session Laws
- N.C. Const. art. IV, § 21
- Harrill v. Retirement System, 271 N.C. 357, 156 S.E.2d 702 (1967)
- Bridges v. City of Charlotte, 221 N.C. 472, 20 S.E.2d 825 (1942)
Original opinion text
Requested by: E. T. Barnes, Director, Retirement Systems Division, Department of State Treasurer
Questions:
(1) Is a retired Superior or Appellate Court judge, who was serving prior to January 1, 1974, and who retired effective August 1, 1982 with a benefit based on the provisions of Chapter 7A, entitled to an adjustment of his retirement allowance under either the provisions of Chapter 7A or the provisions of § 221 of Chapter 761 of the 1983 Session Laws?
(2) Is a retired Superior or Appellate Court judge who was in service prior to January 1, 1974, but who retired after that date, entitled to an increase in his retirement allowance based on the provisions of Chapter 7A if, because of longevity payments, he is not currently receiving as much as two thirds of the salary of the occupant of the office from which he retired?
(3) Is a retired Superior Court judge, who was a judge prior to January 1, 1974, but who retired after that date with benefits computed under the provisions of G.S. § 7A-51, entitled to an increased retirement benefit if he is not currently receiving two-thirds of the salary of the occupant of the office from which he retired because his successor is now receiving additional payment for services as the Senior Resident Superior Court judge of that district?
Conclusions:
(1) No.
(2) No.
(3) No.
The Uniform Judicial Retirement System, Article 4 of Chapter 135 of the North Carolina General Statutes, governs retirement for all judges and justices who were judges and justices on January 1, 1974, or who have become judges or justices since that date. G.S. § 135-51(a). In order that those judges and justices who were already in office did not lose benefits under the new system, the statute provides that judges or justices serving immediately prior to January 1, 1974, should under no circumstances receive a retirement allowance "initially payable upon the retirement of" that member less than he or she would have been entitled to under the terms of the previous system. G.S. § 135-58(c). That section refers to the "allowance initially payable" and does not refer to post-retirement increases. (Emphasis added). Nor is there any similar section relating to post-retirement increases for those judges or justices who retired on or after January 1, 1974. (Different language applies to those judges and justices already retired on the effective date of the new provisions.)
The question has been raised whether a judge who retired on August 1, 1982, is entitled to an increase in his allowance under either the provisions of Chapter 7A or the provisions of § 221 of Chapter 761 of the 1983 Session Laws if that judge's benefit was initially calculated under the provisions of Chapter 7A. Similarly, the question has been asked whether a judge who retired after January 1, 1974, but who received an initial benefit based on Chapter 7A, is now entitled to post-retirement increases to reach two thirds of the salary paid his successor, when his successor has received increases because of longevity or status as Senior Resident Superior Court Judge. In other words, when the judge first retired, he would have received a higher benefit under the old system than under the new system. Therefore, he received that higher benefit as specifically provided.
Under the old judicial retirement provisions, as set out in G.S. § 7A-51, a Superior Court judge who qualified for retirement was entitled to receive "two thirds of the annual salary from time to time received by the occupant of the office from which he retired." Thus, a retired Superior Court judge's benefit would rise after retirement as the salary of active judges rose so that the retired judge would always receive two thirds of the salary of the judge occupying the office from which he retired. Similarly, a judge or justice of the appellate division would be entitled after retirement to receive two thirds of the annual salary of the office from which he retired. G.S. § 7A-39.2. On the other hand, District Court judges were members of the Teachers' and State Employees' Retirement System prior to the establishment of the Uniform Judicial Retirement System. Since the formula for calculation of benefits under the Uniform Judicial Retirement System is significantly higher than that for calculation of benefits under the Teachers' and State Employees' Retirement System, District Court judges would not be entitled to any higher amount under the old system than under the Uniform Judicial Retirement System.
If a Superior Court judge was serving prior to January 1, 1974, and has retired since that date, it is necessary to calculate his initial benefit both under the provisions of the Uniform Judicial Retirement System and under G.S. 7A-51. At the date of his retirement, he is entitled to the higher benefits. However, there is no provision in the Uniform Judicial Retirement System which requires his post-retirement increases to maintain the level of benefits which he might receive under G.S. § 7A-51. As emphasized above, the language of G.S. § 135-58(c) applied only to the initial allowance, not to the allowance that he may receive at a later date. Therefore, should a judge retire and have his benefit calculated under G.S. § 7A-51, he is nevertheless not entitled to later increases based on the two thirds provision of G.S. § 7A-51 and such additional payments received by his successor as salary increases, longevity or allowances for services as a Senior Resident Judge. Similarly, an Appellate Court judge retiring after January 1, 1974, would not be entitled to post-retirement increases based on G.S. § 7A-39.2.
Nothing in the North Carolina Constitution requires that retired judges continue to receive, at all times, two thirds of the salary currently received by the occupant of the office from which he retired. Section 21, Article IV of the Constitution of North Carolina does specify that "the salaries of Judges shall not be diminished during their continuance in office." As long as a judge or justice was in office and the relevant provisions of Chapter 7A were in effect, a judge or justice was entitled to two thirds of the then-current salary for his office upon retirement. This assumes, as suggested by the North Carolina Supreme Court, that retirement allowances are deferred payments of salary. See Harrill v. Retirement System, 271 N.C. 357, 156 S.E.2d 702 (1967); Bridges v. City of Charlotte, 221 N.C. 472, 20 S.E.2d 825 (1942). Even if the General Assembly could not reduce the amount of retirement benefit to which a judge is entitled under existing provisions of law, he or she is not necessarily entitled to the same formula for computing retirement benefits. The constitutional provision against diminishment of a judge's salary while in office contemplates an amount of money payable to him, not a method of calculating that amount of money. Since any judge who was in service prior to January 1, 1974, has received the higher of the two benefits, either under Chapter 7A or under Article IV of Chapter 135, he or she has received the full amount of the salary provided to him by law or while in office. Failure to provide post-retirement increases as active judges receive salaries does not constitute a diminishment of salary during the term of office even though the formula for determining the post-retirement amount has been changed. Consequently, a judge or justice serving prior to January 1, 1974, who retired after that date with at least two thirds of the salary he was receiving when he left office is not entitled to any post-retirement increases not specifically provided for by statute or by appropriation of the General Assembly.
An additional question was whether a judge who retired on August 1, 1982, was entitled to an adjustment of his retirement allowance under the provisions of § 221 of Chapter 761 of the 1983 Session Laws. That legislation is the Appropriations Act for the new biennium. The specific section referred to provides for post-retirement increases, effective July 1, 1983, to those beneficiaries on the retirement rolls as of July 1, 1982. Clearly, a judge who retired on August 1, 1982 does not meet the requirement for receiving this increment.
In conclusion, whether a judge was in service before or after January 1, 1974, once he has retired, any post-retirement increases must be based upon the provisions of Article IV of Chapter 135 of the North Carolina General Statutes, the Uniform Judicial Retirement System, or upon any other action by the General Assembly such as an increment provided for by appropriation. A judge or justice who does not meet the requirements of an appropriation provision or of any increase granted by the Uniform Judicial Retirement System pursuant to statutory authority is not entitled to have his retirement allowance increased or adjusted.
RUFUS L. EDMISTEN
Attorney General
Norma S. Harrell
Assistant Attorney General