When North Carolina expanded public access to state employee 'salary' to include benefits, did that mean retirement benefits become public too, even though they are paid by the state Retirement System and not the employee's own department?

Plain-English summary

Senators Tony Rand and David Hoyle asked the AG to interpret an awkward consequence of the 2007 personnel-records transparency law (Session Law 2007-508, Senate Bill 1546). That law broadly amended a series of statutes to expand the public's right to inspect public-employee compensation records. Section 4 of the law amended N.C.G.S. § 126-23 to define "salary" as including "pay, benefits, incentives, bonuses, and deferred and all other forms of compensation paid by the employing entity."

The phrase "paid by the employing entity" is what generated the question. Retirement benefits for state employees are not paid by the agency where the employee actually works. They are paid by the Teachers' and State Employees' Retirement System, a separate state entity governed by Chapter 135. So under a strict literal reading, retirement benefits would be public records only when "paid by the employing entity," which would be true only for employees of the State Treasurer's office (because the Retirement System sits within the Department of State Treasurer).

That would lead to a strange outcome: retirement benefit information would be public for Treasurer employees but confidential for every other state employee. The senators wanted to know whether the legislature really intended that.

AG Roy Cooper's office said no. The opinion applied standard rules of statutory construction:

• The first principle is to discern the intent of the legislature, citing State v. Jones.
• "Where a literal interpretation of the language of a statute will lead to absurd results, or contravene the manifest purpose of the legislation, as otherwise expressed, the reason and purpose of the law shall control," citing Frye Regional Medical Center v. Hunt.
• Courts "normally adopt an interpretation which avoids absurd or bizarre consequences," citing State ex rel. Commissioner of Insurance.

The title of the act was "An Act to Clarify the Public's Access to Public Employee Personnel Records and to Make Changes to the Law Pertaining to Confidentiality of Competitive Health Care Information." The act expanded public access in nine parallel statutes, all directed at the same purpose: more transparency. Reading "paid by the employing entity" to lock retirement benefits away for everyone except Treasurer employees would contradict that purpose. So the AG read the statute purposively: retirement benefit information is part of the public personnel record, available for inspection.

The opinion is signed by Grayson G. Kelley, Chief Deputy Attorney General.

Currency note

This opinion was issued in 2008. 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 2009 follow-up opinion on accrued leave balances cited and built on this opinion's reading of § 126-23. The 2010 NCDOJ opinion on personnel records as a whole interpreted parallel provisions of the same law. The statutory framework continues to evolve, and anyone applying this rule in 2026 needs to recheck the current text of Chapter 126 and any controlling court decisions.

Common questions

Q: What retirement benefit information is public under this opinion?
A: The opinion does not enumerate specific fields. The conclusion is that retirement benefit information falls within the personnel record that public employers must maintain for inspection under § 126-23. Implementing agencies would identify the specific fields (benefit amount, accrued service credits, employer contributions, etc.) in light of § 126-23 and the personnel confidentiality provisions of § 126-22.

Q: Does this apply only to current employees, or also to retirees?
A: The opinion addresses retirement benefit information as part of the personnel record under § 126-23. The personnel-records framework continues to govern retiree information that public employers maintain. The opinion does not explicitly distinguish between current and retired employees.

Q: What about employees of local governments, school districts, and community colleges?
A: Session Law 2007-508 amended nine statutes, parallel to § 126-23, covering public school employees, community college employees, mental health authority employees, county employees, municipal employees, water and sewer authority employees, and others. The same purposive reading should apply, but each statute is technically separate.

Q: Was this opinion controversial?
A: The AG had to choose between a strict literal reading and a purposive reading. The literal reading would have created a manifestly absurd two-tier system. Most courts would have reached the same conclusion under the same canons. But the question came up precisely because the statutory drafting was ambiguous enough to prompt the senators to ask.

Q: Is there a way to keep retirement information confidential?
A: Not under § 126-23 as the AG read it. The General Assembly could amend the statute to carve retirement information out of the disclosure mandate, but absent that, the AG opinion treated retirement information as part of the public personnel record.

Q: What about Social Security numbers and bank account information?
A: Those remain confidential under § 126-22 (the personnel-file confidentiality provision) and the constitutional and statutory privacy protections governing financial data. The 2007 amendment to § 126-23 covered compensation information, not personally identifying or financial-account information.

Background and statutory framework

North Carolina's public records framework is built on a presumption of openness, narrowed by statute. Chapter 132 is the general Public Records Act. Chapter 126 governs the State Personnel Act and includes both confidentiality (§ 126-22) and disclosure (§ 126-23) provisions for state employees. Parallel chapters govern parallel categories of public employees.

Before 2007, "salary" under § 126-23 was a narrower term. Critics complained that the public could not get the full compensation picture for state employees, especially as compensation packages got more complex (deferred compensation, performance bonuses, benefits, etc.). Session Law 2007-508 broadened the definition.

The "paid by the employing entity" phrase was likely included to make clear that an employer must disclose what it pays the employee, not what third parties may pay (e.g., honoraria from outside organizations). The drafters did not anticipate that the same phrase would create an apparent exemption for retirement benefits, which are paid through a separate state Retirement System rather than by the employing agency itself.

The AG's purposive reading is the conventional answer when text and clearly-stated legislative purpose diverge. Subsequent opinions in 2009 and 2010 continued the same approach, applying § 126-23 broadly in favor of disclosure.

Citations

• Session Law 2007-508 (Senate Bill 1546)
• N.C.G.S. § 126-23 (personnel information open to public inspection)
• N.C.G.S. § 135-2 (Retirement System)
• N.C.G.S. § 135-5(a)(1) (retirement application)
• N.C.G.S. § 136-22 (Retirement Systems Division records, as referenced in the opinion)
• State v. Jones, 359 N.C. 832, 616 S.E.2d 496 (2005)
• Frye Regional Medical Center, Inc. v. Hunt, 350 N.C. 39, 510 S.E.2d 159 (1999)
• State ex rel. Commissioner of Insurance v. North Carolina Automobile Rate Administrative Office, 294 N.C. 60, 241 S.E.2d 324 (1978)

Source

• Landing page: https://ncdoj.gov/legal-services/archived-opinions/

Original opinion text

February 5, 2008

The Honorable Tony Rand
North Carolina Senate
300 N. Salisbury Street, Room 300-C
Raleigh, NC 27603-5925

The Honorable David W. Hoyle
North Carolina Senate
300 N. Salisbury Street, Room 300-A
Raleigh, NC 27603-5925

Re: Advisory Opinion: Confidentiality of Retirement Benefit Information; Session Law 2007-508

Dear Senator Rand and Senator Hoyle:

I am responding to your request to Attorney General Roy Cooper for our opinion as to the proper interpretation of certain provisions of Session Law 2007-508 (Senate Bill 1546). Specifically, you have asked whether statutory amendments enacted by the General Assembly in this legislation made information concerning retirement benefits a part of the confidential information in a state employee's personnel file and not subject to public inspection or examination.

Senate Bill 1546, entitled "An Act to Clarify the Public's Access to Public Employee Personnel Records and to Make Changes to the Law Pertaining to Confidentiality of Competitive Health Care Information," was ratified by the General Assembly on August 2, 2007, signed by the Governor on August 30, 2007, and subsequently codified as Session Law 2007-508. In general, the legislation amended various statutes governing the personnel records of public employees by extending the information required to be open for public inspection to the terms of employment contracts and by expanding the definition of public salary information to include benefits, incentives, bonuses, deferred compensation and all other forms of compensation. Statutes applying to employees of local boards of education, community colleges, mental health authorities, public health authorities, counties, cities, water and sewer authorities and the State were amended in this manner by virtually identical language. Section 5.5 and Section 8.5 also amended certain provisions of Chapter 131E to make public additional information concerning the compensation packages of public hospital employees while maintaining the confidentiality of competitive health care information.

The question you pose is raised by the amendments in Section 4 of the legislation, which amend NCGS § 126-23. This statute requires each department, agency, institution, commission and bureau of the State to maintain a public record of each of its employees which makes available for inspection certain specified employment-related information. Prior to the enactment of Session Law 2007-508 "current salary" was one category of information available to the public. Section 4 amended this term by adding: "For the purposes of this section, the term 'salary' includes pay, benefits, incentives, bonuses, and deferred and all other forms of compensation paid by the employing entity." Based upon the plain language of this amendment, information showing benefits paid to an employee by the employing entity is now a part of the record required to be maintained for public inspection.

The concerns which have generated your question, however, involve the interpretation of the phrase "paid by the employing entity." It has been noted that retirement benefits are paid by the Teachers' and State Employees' Retirement System of North Carolina rather than by any individual "employing entity." NCGS § 135-2 states: "A Retirement System is hereby established and placed under the management of the Board of Trustees for the purpose of providing retirement allowances and other benefits under provisions of this Chapter for teachers and state employees of the State of North Carolina." Members of the Retirement System who retire must apply to the Board of Trustees to receive a retirement benefit. NCGS § 135-5(a)(1). It is therefore accurate to conclude that retirement benefits are paid by a state entity other than the "employing entity" of most state employees. A literal application of this premise requires a conclusion that the General Assembly did not intend for information concerning retirement benefits to be available for public inspection. This interpretation finds a measure of support in Section 4.5 of the legislation which amended NCGS § 136-22 to add employment-related information gathered by the Retirement Systems Division of the Department of the State Treasurer to the definition of "personnel file" information which is not subject to public inspection.

A literal interpretation of the amendment, however, also requires a conclusion that only the Department of State Treasurer is required to maintain a record of the retirement benefits of its own employees, since these benefits are in fact paid by the "employing entity." To accept this analysis, of course, requires some basis upon which to conclude that the General Assembly intended for the retirement benefit information of all public employees to be confidential, except that of employees of the State Treasurer.

We cannot conclude that the General Assembly intended such a result. The cardinal principle of statutory construction is to discern the intent of the legislature. State v. Jones, 359 N.C. 832, 616 S.E.2d 496 (2005). Furthermore, where a literal interpretation of the language of a statute will lead to absurd results, or contravene the manifest purpose of the legislation, as otherwise expressed, the reason and purpose of the law shall control and the strict letter thereof shall be disregarded. Frye Regional Medical Center, Inc. v. Hunt, 350 N.C. 39, 510 S.E.2d 159 (1999). In construing statutes, courts normally adopt an interpretation which avoids absurd or bizarre consequences, the presumption being that the legislature acted in accordance with reason and common sense and did not intend unfounded results. State ex rel. Commissioner of Insurance v. North Carolina Automobile Rate Administrative Office, 294 N.C. 60, 241 S.E.2d 324 (1978).

A careful review of the amendments contained in Session Law 2007-508 reflects new language added to nine separate statutes which expands the employee-related information available for public inspection. Most notably, the definition of "salary" is amended in each statute by clarifying that public salary information is not restricted to pay, but also includes benefits and all other forms of compensation. Read within this context, it is clear that the primary intent of the legislature in enacting these amendments was to make available for public inspection complete information as to the compensation of public employees. An interpretation of the amended definition of "salary" in a manner which makes public all information regarding compensation and benefits, except benefits paid by the Retirement System, contravenes this intent. When the absurd consequence that a literal interpretation places on employees of the Treasurer's Office is added to the analysis, it is clear that the General Assembly could not have intended such a result.

It is therefore our opinion that the General Assembly, in enacting Session Law 2007-508, did not intend to exclude retirement benefit information from the records required to be maintained for public inspection by each department, agency, institution, commission and bureau of the State in accordance with NCGS § 126-23. Such information, upon request, should be made available for inspection and copying.

Very truly yours,

Grayson G. Kelley
Chief Deputy Attorney General