GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2023
SESSION LAW 2024-10
HOUSE BILL 989
AN ACT to recodify and STANDARDIZE the laws relating TO service purchases, including by making technical, clarifying, and conforming changes, under the teachers' and state employees' retirement system, the local governmental employees' retirement system, the consolidated judicial retirement system, and the legislative retirement system.
The General Assembly of North Carolina enacts:
Part I. RECODIFY AND STANDARDIZE SERVICE PURCHASE UNDER THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM
SECTION 1. Article 1 of Chapter 135 of the General Statutes is amended by adding a new G.S. 135‑4.5 to be entitled "Creditable service purchases."
SECTION 2.(a) The second through sixth sentences of subsection (j2) of G.S. 135‑4 are recodified as subsection (a) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(b) The first and last sentences of subsection (j2) of G.S. 135‑4 are recodified as the first two sentences of subdivision (a)(1) of G.S. 135‑4.5, and subsection (k1) of G.S. 135‑4 is recodified as the third through eighth sentences of that subdivision. The remaining subsection catch line for subsection (k1) of G.S. 135‑4 is repealed.
SECTION 2.(c) Subsection (l2) of G.S. 135‑4 is recodified as subdivision (a)(2) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(d) Subsection (p2) of G.S. 135‑4 is recodified as subdivision (a)(3) of G.S. 135‑4.5, as created by Section 1 of this act, and the existing subunits of subsection (p2) of G.S. 135‑4 are redesignated accordingly.
SECTION 2.(e) Subsection (s) of G.S. 135‑4 is recodified as subdivision (a)(4) of G.S. 135‑4.5, as created by Section 1 of this act, and the existing subunits of subsection (s) of G.S. 135‑4 are redesignated accordingly.
SECTION 2.(f) Subsection (bb1) of G.S. 135‑4 is recodified as subdivision (a)(5) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(g) Subsection (z) of G.S. 135‑4 is recodified as subdivision (a)(7) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(h) Subsection (aa) of G.S. 135‑4 is recodified as subdivision (a)(8) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(i) Subsection (cc1) of G.S. 135‑4 is recodified as subdivision (a)(9) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(j) Subsection (hh) of G.S. 135‑4 is recodified as subdivision (a)(10) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(k) Subdivision (f)(7) of G.S. 135‑4 is recodified as subsection (b) of G.S. 135‑4.5, as created by Section 1 of this act, and the existing subunits of subdivision (f)(7) of G.S. 135‑4 are redesignated accordingly.
SECTION 2.(l) Subsection (r) of G.S. 135‑4 is recodified as subsection (c) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(m) Subsection (v) of G.S. 135‑4 is recodified as subsection (d) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(n) Subsection (ff) of G.S. 135‑4 is recodified as subsection (e) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(o) Subsection (dd) of G.S. 135‑4 is recodified as subsection (f) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(p) Subsection (ee) of G.S. 135‑4 is recodified as subsection (g) of G.S. 135‑4.5, as created by Section 1 of this act.
SECTION 2.(q) Subsections (j1), (p), and (cc) of G.S. 135‑4 are repealed.
SECTION 3. G.S. 135‑4.5, as created by Section 1 of this act and as amended by Section 2 of this act, reads as rewritten:
"§ 135‑4.5. Creditable service purchases.
Subject to the requirements of this
subsection, an employer may pay all or part of the cost of a service purchase
of a member in service. To the extent that the purchase is paid by the
employer, the cost amount paid by the employer shall be credited
to the pension accumulation fund. Pension Accumulation Fund. To
the extent that the purchase is paid by the member, the cost amount paid
by the member shall be credited to the member's annuity savings account.accumulated
contributions and interest in the Annuity Savings Fund.
The total amount of creditable service purchased under each subdivision of this section shall not exceed five years. No purchase of service credit under any subdivision of this section shall be made if a benefit is allowable under another public retirement system as a result of the service. If there is a conflict between a provision of G.S. 135‑4 and a provision of this subsection, then this subsection shall control.
The following purchases of creditable service are authorized under this subsection:
(1) Notwithstanding any
provision of this Chapter to the contrary on and after January 1, 2023, any
member in service with five or more years of membership service may purchase
creditable service for service as a member of the General Assembly not
otherwise creditable under this section, provided the service is not credited
in the Legislative Retirement Fund nor the Legislative Retirement System, by
paying a total lump sum payment. The creditable service of a member who was a
member of the Local Governmental Employees' Retirement System, the Consolidated
Judicial Retirement System, or the Legislative Retirement System, and whose
accumulated contributions and reserves are transferred from that System to this
System, includes service that was creditable in the Local Governmental
Employees' Retirement System, the Consolidated Judicial Retirement System, or
the Legislative Retirement System, and membership service with those Retirement
Systems is membership service with this Retirement System. Notwithstanding
any other provision of this Chapter to the contrary, on and after January 1,
2022, any member who withdrew his or her contributions in accordance with the
provisions of G.S. 127‑27(f) or G.S. 135‑5(f) or the
rules and regulations of the Law Enforcement Officers' Retirement System, and
who subsequently returns to service and completes five years of membership
service upon that return, while in service may purchase an amount of creditable
service totaling the amount of the membership service associated with the
withdrawn contributions, provided that the total of the creditable service
purchased under this subsection may not exceed five years. The member shall
purchase this service by paying a lump sum amount to the Annuity Savings Fund
equal to the full liability increase due to the additional service credits on
the basis of the assumptions used for the purposes of the actuarial valuation
of the liabilities of the Retirement System, except for the following
assumptions specific to this calculation: (i) the allowance shall be assumed to
commence at the earliest age at which the member could retire on an unreduced
retirement allowance and (ii) assumed annual postretirement allowance increases
as set by the Board of Trustees upon the advice of the consulting actuary. The
calculation of the amount payable shall also include an administrative fee to
be set by the Board.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.Withdrawn
service. Service withdrawn in accordance with the provisions of any of the
following, limited to a total maximum purchase of five years:
a. G.S. 120‑4.25.
b. G.S. 128‑27(f).
c. G.S. 135‑5(f).
d. G.S. 135‑62.
e. Any rules adopted under Article 12 of Chapter 143 of the General Statutes, as it existed prior to 1986.
Creditable
service under this subsection shall be allowed only at the rate of one year of
out‑of‑state service for each year of membership service in this
State, with a maximum allowable of five years of out‑of‑state
service. Such service State. Service
under this subdivision is limited to full‑time
service that would be allowable under the laws governing this Retirement
System. Credit will be allowed only if no benefit is allowable in another
public retirement system as a result of the service.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.
(3) Part‑Time Service
Credit. Notwithstanding any other provision of this Chapter to the contrary,
any member in service with five or more years of membership service may
purchase service Part‑time service. Service previously
rendered as a part‑time teacher or employee of an employer, as defined in
G.S. 135‑1(11) or G.S. 128‑21(11), except under either
G.S. 135‑1 or G.S. 128‑21. For the purposes of this
subdivision, the following service may not is not eligible to be
purchased:
a. Part‑time service rendered as a bus driver to a public school while a full‑time high school student.
b. Temporary or part‑time service rendered while a full‑time student in pursuit of a degree or diploma in a degree‑granting program, unless that service was rendered on a permanent part‑time basis and required at least 20 hours of service per week.
Payment
for service purchased The amount of the
single lump sum to be paid for the purchase of service credit under this subsection subdivision shall be made
in a single lump sum in an amount calculated by applying the ratio of
actual gross compensation earned as a part‑time employee to the gross
compensation that would have been earned as a full‑time employee to the
period of service rendered in months. The member shall purchase this service
by paying a lump sum amount to the Annuity Savings Fund equal to the full
liability increase due to the additional service credits on the basis of the
assumptions used for the purposes of the actuarial valuation of the liabilities
of the Retirement System, except for the following assumptions specific to this
calculation: (i) the allowance shall be assumed to commence at the earliest age
at which the member could retire on an unreduced retirement allowance and (ii)
assumed annual postretirement allowance increases as set by the Board of
Trustees upon the advice of the consulting actuary. The calculation of the
amount payable shall also include an administrative fee to be set by the Board.
The
Board of Trustees shall adopt rules regarding how much service in any year, as
based on compensation, is equivalent to one year of service in proportion to
earnable compensation, but in
In no case shall more than one year of service be creditable for all service in one year. Service rendered for the regular school year in any district shall be equivalent to one year of service.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.
(4) Credit at Full Cost
for Temporary Employment. Any member in service with five or more
years of membership service may purchase creditable service for State
employment when classified as service. Service previously rendered on a
temporary teacher or employee subject to all basis to an employer, as
defined under either G.S. 135‑1 or G.S. 128‑21, and that
meets both of the following conditions:
a. The member was employed by an employer as
defined in G.S. 135‑1(11) or G.S. 128‑21(11).
b.a. The member's
temporary employment met all other requirements of G.S. 135‑1(10) or
(25), or G.S. 128‑21(10).member would
have met the definition of employee or teacher under either G.S. 135‑1
or G.S. 128‑21 except for the temporary nature of the service.
c. The member has completed five years or more of
membership service.
d.b. The member has
acquired from the employer such all certifications of temporary
employment as that are required by the Board of Trustees.
The
amount of creditable service purchased under this subsection may not exceed a
total of five years. A member shall purchase this service by making a lump sum
payment into the Annuity Savings Fund equal to the full liability increase due
to the additional service credits on the basis of the assumptions used for the
purposes of the actuarial valuation of the liabilities of the Retirement
System, except for the following assumptions specific to this calculation: (i)
the allowance shall be assumed to commence at the earliest age at which the
member could retire on an unreduced retirement allowance and (ii) assumed
annual postretirement allowance increases as set by the Board of Trustees upon
the advice of the consulting actuary. The calculation of the amount payable
shall also include an administrative fee to be set by the Board.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.
(5) Credit at Full Cost
for Probationary Local Government Employment Purchased On and After
January 1, 2022. Notwithstanding any other provision of this Chapter, on and
after January 1, 2022, a member may purchase creditable service, prior to
retirement, for employment with local government service. Service
previously rendered to any local employer employer, as
defined in G.S. 128‑21(11) under G.S. 128‑21, when
considered to be performed in a probationary or employer‑imposed
waiting period status, status that occurred between the date of
employment and the date of membership service with the Local Governmental
Employees' Retirement System.
The
member shall purchase this service by making a lump sum amount payable to the
Annuity Savings Fund equal to the full liability increase due to the additional
service credits on the basis of the assumptions used for the purposes of the
actuarial valuation of the liabilities of the Retirement System, except for the
following assumptions specific to this calculation: (i) the allowance shall be
assumed to commence at the earliest age at which the member could retire on an
unreduced retirement allowance and (ii) assumed annual postretirement allowance
increases as set by the Board of Trustees upon the advice of the consulting
actuary. The calculation of the amount payable shall also include an
administrative fee to be set by the Board.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.
(7) Credit at Full
Cost for Leave Due to Extended Illness. Any member in service with
five or more years of membership service may purchase creditable service for
periods due to extended illness. Periods of interrupted service
while on leave without pay status due to the member's illness or injury,
excluding leave due to maternity, parental leave or pregnancy or
childbirth‑related leave, provided that any single such period
of interrupted service shall have included such a period
of time during which the member failed to earn at least two months membership service,
by making a lump sum amount payable to the Annuity Savings Fund equal to the
full liability increase due to the additional service credits on the basis of
the assumptions used for the purposes of the actuarial valuation of the
liabilities of the Retirement System, except for the following assumptions
specific to this calculation: (i) the allowance shall be assumed to commence at
the earliest age at which the member could retire on an unreduced retirement
allowance and (ii) assumed annual postretirement allowance increases as set by
the Board of Trustees upon the advice of the consulting actuary. The
calculation of the amount payable shall also include an administrative fee to
be set by the Board. The amount of creditable service purchased under this
subsection may not exceed a total of five years.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.service.
(8) Credit at Full Cost
for Parental Leave, Pregnancy or Childbirth‑Related Leave, or
Certain Involuntary Furloughs. Notwithstanding other provisions of this
Chapter, any member in service with five or more years of credited membership
service may purchase creditable service for periods leave and pregnancy
or childbirth‑related leave. Periods of interrupted service which
were interrupted due to parental leave, pregnancy or childbirth, or
involuntary administrative furlough due to a lack of funds to support the
position by making a lump sum amount payable to the Annuity Savings Fund equal
to the full liability increase due to the additional service credits on the
basis of the assumptions used for the purposes of the actuarial valuation of
the liabilities of the Retirement System, except for the following assumptions
specific to this calculation: (i) the allowance shall be assumed to commence at
the earliest age at which the member could retire on an unreduced retirement
allowance and (ii) assumed annual postretirement allowance increases as set by
the Board of Trustees upon the advice of the consulting actuary. The
calculation of the amount payable shall also include an administrative fee to
be set by the Board. The amount of creditable service purchased under this
subsection may not exceed a total of five years.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.pregnancy,
or childbirth.
(10) Credit at Full Cost for
Service With The University of North Carolina During Which a Member
Participated in the Optional Retirement Program. Notwithstanding any
other provisions of this Chapter to the contrary, any member in service with
five or more years of membership service may purchase creditable service for
periods Program service. Periods of employment with The University
of North Carolina during which the member participated in the Optional
Retirement Program Program, as provided for in G.S. 135‑5.1,
provided that the member is not receiving, and is not entitled to receive, any
retirement benefits resulting from this employment. The amount of creditable
service purchased under this subsection may not exceed a total of five years.
The member shall purchase this service by making a lump‑sum amount
payable to the Annuity Savings Fund equal to the full liability increase due to
the additional service credits on the basis of the assumptions used for the
purposes of the actuarial valuation of the liabilities of the Retirement
System, except for the following assumptions specific to this calculation: (i)
the allowance shall be assumed to commence at the earliest age at which the
member could retire on an unreduced retirement allowance and (ii) assumed annual
postretirement allowance increases as set by the Board of Trustees upon the
advice of the consulting actuary. The calculation of the amount payable shall
also include an administrative fee to be set by the Board.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.
(b) Armed Service Credit.
Notwithstanding any other provision of this Chapter, Article to
the contrary, any member and or any retired member as
herein described may purchase creditable service in the Armed Forces of the
United States, not otherwise allowed, States by paying a total
lump sum payment determined as follows:
(1) For On or
before December 31, 2038, members who completed 10 years of membership
service, and retired members who completed 10 years of membership service prior
to retirement, whose membership began on or prior to July 1, 1981, and who
make this may purchase this service within three years after
first becoming eligible, the cost shall be eligible by paying an
amount equal to the monthly compensation the member earned when the member
first entered membership service times the employee contribution rate at that
time times the months of service to be purchased, multiplied by a factor
equivalent to the investment return assumptions determined by the Board of
Trustees, compounded annually, from the initial year of membership to the year
of payment so as to equal one‑half of the cost of allowing this service,
plus an administrative fee to be set by the Board of Trustees.
(2) For members Members
who complete five years of membership service, and retired members
who complete five years of membership service prior to retirement, and eligible
members and retired members covered by paragraph a. of this subdivision,
whose membership began on or before July 1, 1981, and who were eligible
to purchase service credits under subdivision (1) of this subsection but
who did not or do not make this purchase within three years after first
becoming eligible, the cost shall be an amount equal to the full liability
of the service credits calculated on the basis of the assumptions used for the
purposes of the actuarial valuation of the System's liabilities and shall take
into account the retirement allowance arising on account of the additional
service credits commencing at the earliest age at which the member could retire
on an unreduced allowance, as determined by the Board of Trustees upon the
advice of the consulting actuary, plus an administrative fee to be set by the
Board of Trustees. Notwithstanding the foregoing provisions of this subsection
that provide for the purchase of service credits, the term "full
liability" includes assumed post‑retirement allowance increases, as
determined by the Board of Trustees, from the earliest age at which a member
could retire on an unreduced service retirement allowance.eligible, may purchase this service by paying a lump
sum amount to the Annuity Savings Fund. The amount payable shall be equal to
the full liability increase to the Retirement System due to the additional
service credits purchased plus an administrative fee that is set by the Board
of Trustees. The full liability increase shall be calculated on the basis of
the same assumptions used for the purposes of the actuarial valuation of the
liabilities of the Retirement System, except for the following assumptions
specific to this calculation: (i) the allowance shall be assumed to commence at
the earliest age at which the member could retire on an unreduced retirement
allowance and (ii) there shall be assumed annual postretirement allowance
increases set by the Board of Trustees upon the advice of the consulting
actuary.
Creditable service allowed under
this subdivision subsection shall be only for the initial period
of "active duty", as defined in 38 U.S. Code Section 101(21), in the
Armed Forces of the United States up to the date the member was first eligible
to be separated and released and for subsequent periods of "active
duty", as defined in 38 U.S. Code Section 101(21), as required by the
Armed Forces of the United States up to the date of first eligibility for
separation or release, but shall not include periods of active duty in the
Armed Forces of the United States creditable in any other retirement system
except the National Guard or any reserve component of the Armed Forces of the
United States, and shall not include periods of "active duty for
training", as defined in 38 U.S. Code Section 101(22), or periods of
"inactive duty training", as defined in 38 U.S. Code Section 101(23),
rendered in any reserve component of the Armed Forces of the United States. Provided,
creditable Creditable service may shall be allowed
only for active duty in the Armed Forces of the United States of a member that
resulted in a general or honorable discharge from duty. The member shall submit
satisfactory evidence of the service claimed. For purposes of this subsection,
membership service may shall include any membership or prior
service credits transferred to this Retirement System pursuant to G.S. 135‑18.1.
(c) Periods When in
Receipt of Benefits Under the North Carolina Workers' Compensation Act. Notwithstanding any other provision of this Chapter,
Article to the contrary, any member may purchase creditable service
for periods of employer approved leaves of absence when in receipt of benefits
under the North Carolina Workers' Compensation Act. This service All
of the following apply to purchases under this subsection:
(1) Service shall be purchased by paying a cost calculated in the following manner:
(1)a. Leaves of
Absence Terminated Prior to July 1, 1983. The cost to a A member
whose employer approved leave of absence, when in receipt of benefits under the
North Carolina Workers' Compensation Act, terminated upon return to service
prior to July 1, 1983, shall be may purchase creditable service for
that period by paying a lump sum amount payable to the Annuity
Savings Fund Fund. The amount payable shall be equal to the full
liability of the service credits calculated on the basis of the assumptions
used for purposes of the actuarial valuation of the system's liabilities, and
shall take into account the retirement allowance arising on account of the
additional service credit commencing at the earliest age at which the member
could retire on an unreduced retirement allowance, as determined by the board
of trustees upon the advice of the consulting actuary, plus an administrative
fee to be set by the board of trustees. Notwithstanding the foregoing
provisions of this subdivision that provide for the purchase of service
credits, the terms "full cost", "full liability", and
"full actuarial cost" include assumed annual post‑retirement
allowance increases, as determined by the Board of Trustees, from the earliest
age at which a member could retire on an unreduced service allowance.increase to the Retirement System due to the service credits
purchased plus an administrative fee that is set by the Board of Trustees. The
full liability increase shall be calculated on the basis of the same
assumptions used for the purposes of the actuarial valuation of the liabilities
of the Retirement System, except for the following assumptions specific to this
calculation: (i) the allowance shall be assumed to commence at the earliest age
at which the member could retire on an unreduced retirement allowance and (ii)
there shall be assumed annual postretirement allowance increases set by the
Board of Trustees upon the advice of the consulting actuary.
(2)b. Leaves of
Absence Terminating On and After July 1, 1983, but before January 1, 1988. The
cost to a A member whose employer approved leave of absence, when in
receipt of benefits under the North Carolina Workers' Compensation Act,
terminates upon return to service on and after July 1, 1983, but before January
1, 1988, shall be a may purchase creditable service for that period
by paying a lump sum amount due and payable to the Annuity Savings Fund
Fund. If the creditable service is purchased within six months from
return to service service, then the amount payable shall be equal
to the total employee and employer percentage rates of contribution in effect
at the time of purchase and based on the annual rate of compensation of the
member immediately prior to the leave of absence; Provided, however, the
cost to a member whose amount due absence. If the credit is not
purchased and the amount payable is not paid within six months from return
to service service, then the amount payable shall be the amount
due as if the purchase had taken place prior to six months from the end of
the leave of absence plus one percent (1%) per month penalty for each month
or fraction thereof the payment is made beyond the six‑month period.
(3)c. Leaves of
Absence Terminating On and After January 1, 1988. The cost to a A member
whose employer approved leave of absence, when in receipt of benefits under the
North Carolina Workers' Compensation Act, terminates on and after January 1,
1988, shall be due and payable may purchase creditable service for
that period by paying a lump sum amount to the Annuity Savings Fund within
six months from end of the leave of absence and absence. The amount
payable shall be a lump sum amount equal to the employee percentage
rate of contribution in effect at the time of purchase applied to the annual
rate of compensation of the member immediately prior to the leave of absence.
For members electing to make this payment, the member's employer which granted
the leave of absence, or the member's employer upon a return to service, or
both, shall make a matching lump sum payment to the Pension Accumulation Fund
within six months from the end of the leave of absence equal to the employer
percentage rate of contribution in effect at the time of purchase applied to
the annual rate of compensation of the member immediately prior to the leave of
absence. Such These purchases of creditable service are applicable
only when members have membership service credits within 30 days prior to the
leave of absence and within 12 months following the leave of absence and such
membership service is creditable service at the time of purchase. Notwithstanding
any other provision of this subdivision, the cost to a member and to a If
any portion of the amount payable is not paid within six months from the member's
return to service, then the member, the member's employer or former employer
or both employers employer, or both if applicable, whose amount due
is not paid within six months from return to service shall be service,
then the applicable amount due plus shall be increased one
percent (1%) per month penalty for each month or fraction thereof that the
payment is made after the six‑month period.
(2) A member who is in receipt of Workers' Compensation
during the period for which he or she would have otherwise been eligible to
receive short‑term benefits as provided in G.S. 135‑105 and
who subsequently becomes a beneficiary in receipt of a benefit as provided in
G.S. 135‑106 may purchase creditable service for any period of
employer approved leave of absence when in receipt of benefits under the North
Carolina Workers' Compensation Act. The cost to purchase such this creditable
service shall be as determined above provided under subdivision (1)
of this subsection. If the amount due if is not paid within
six months from the beginning of the long‑term disability period as
determined in G.S. 135‑106 under G.S. 135‑106, then
the amount payable for the purchase of the service credits shall be the initial
amount due plus one percent (1%) per month penalty for each month or
fraction thereof that the payment is made after the six‑month period.
(3) Whenever the creditable service purchased pursuant
to this subsection is for a period that occurs during the four consecutive
calendar years that would have produced the highest average annual compensation
pursuant to G.S. 135‑1(5) had the member not been on leave of
absence without pay, then the compensation that the member would have received
during the purchased period shall be included in calculating the member's
average final compensation. In such these cases, the compensation
that the member would have received during the purchased period shall be based
on the annual rate of compensation of the member immediately prior to the leave
of absence.
Nothing in this subsection prevents an employer from voluntarily paying all or a part of the employee portion of the total payment due for the service credit purchased. The employer shall not discriminate against any eligible law enforcement officer employed by the employer in paying all or a part of that portion of the total payment due. To the extent the employee portion of the total payment due is paid by the employer, the employee portion paid by the employer shall be credited to the Pension Accumulation Fund. To the extent the employee portion of the total payment due is paid by the member, the employee portion paid by the member shall be credited to the member's accumulated contributions and interest in the Annuity Savings Fund. A member shall pay any part of the employee portion of the total payment due that is not paid by the employer.
(d) Omitted Membership
Service. A member who (i) had service as an employee employee,
as defined in G.S. 135‑1(10) and G.S. 128‑21(10) under
G.S. 135‑1 or G.S. 128‑21, or as a teacher teacher,
as defined in G.S. 135‑1(25) under G.S. 135‑1,
and who (ii) was omitted from contributing membership through
error may shall be allowed the omitted membership service,
after submitting service if the requirements of
this subsection are met and the total payment required for that service under
this subsection is made. Submission of clear and convincing
evidence of the error, as follows:error is required prior to approval
of, and payment for, the omitted membership service. Payment for service under
this subsection shall be made in the following manner:
(1) Within 90 days of the
omission, by the payment of employee and employer contributions that would have
been paid; or paid.
(2) After 90 days and prior
to three years of the omission, by the payment of the employee and employer
contributions that would have been paid plus interest compounded annually at a
rate equal to the greater of the average yield on the pension accumulation
fund Pension Accumulation Fund for the preceding calendar year or
the actuarial investment rate‑of‑return assumption, as adopted by
the Board of Trustees; orTrustees.
(3) After three years of the
omission, by the payment of an amount equal to the full cost of the service
credits calculated on the basis of the assumptions used for the purposes of the
actuarial valuation of the system's liabilities, and shall take into account
the additional retirement allowance arising on account of such additional
service credit commencing at the earliest age at which a member could retire on
an unreduced retirement allowance, as determined by the Board of Trustees upon
the advice of the consulting actuary, plus an administrative fee to be set by
the Board of Trustees. Notwithstanding the foregoing provisions of this
subdivision that provide for the purchase of service credits, the terms
"full cost", "full liability", and "full actuarial
cost" include assumed annual post‑retirement allowance increases, as
determined by the Board of Trustees, from the earliest age at which a member
could retire on an unreduced service allowance.paying
a lump sum amount to the Annuity Savings Fund. The amount payable shall be
equal to the full liability increase of the Retirement System due to the
service credits purchased plus an administrative fee that is set by the Board
of Trustees. The full liability increase shall be calculated on the basis of
the same assumptions used for the purposes of the actuarial valuation of the
liabilities of the Retirement System, except for the following assumptions
specific to this calculation: (i) the allowance shall be assumed to commence at
the earliest age at which the member could retire on an unreduced retirement
allowance and (ii) there shall be assumed annual postretirement allowance
increases set by the Board of Trustees upon the advice of the consulting
actuary.
Nothing contained in this
subsection shall prevent an employer or member from paying all or a part of the
cost of required payment for the omitted membership service;
and to service. To the extent the amount is paid by the
employer, the cost amount paid by the employer shall be credited
to the pension accumulation fund; and to Pension Accumulation Fund.
To the extent the amount is paid by the member, the cost amount
paid by the members member shall be credited to the member's annuity
savings account; provided, however, an accumulated contributions and
interest in the Annuity Savings Fund. An employer does shall not
discriminate against any employed member or group of employed members
in his employ in paying all or any part of the cost of payment
required under this subsection for the omitted membership service.
(e) Retroactive Retroactively
Reinstated or Restored Membership Service. A member who is reinstated to
service as an employee as defined in G.S. 135‑1(10) or as a teacher
teacher, as either is defined in G.S. 135‑1(25)
under G.S. 135‑1, retroactively to the date of prior
involuntary termination with (i) back pay, as defined by the State Human
Resources Commission, and (ii) associated benefits may shall be
allowed membership service, after submitting service
for that period of reinstated service if the requirements of this subsection
are met and the total payment required for that service under this subsection
is made. Submission of clear and convincing evidence of the
reinstatement, payment of back pay, and restoration of associated benefits,
as follows:benefits is required prior to the approval of and payment for
the retroactive membership service. The amount payable for the service under
this subsection shall be calculated in the following manner:
(1) When If the
reinstatement to service is by court order, final decision of an Administrative
Law Judge, or with the approval of the Office of State Human Resources
Director, and is:
a. Within occurs within 90 days of the
involuntary termination, by the payment then the amount payable is
the amount of employee and employer contributions that would have been paid;
orpaid.
b. After
(2) If the reinstatement to service is by court
order, final decision of an Administrative Law Judge, or with the approval of
the Office of State Human Resources Director, and occurs after 90 days of
the involuntary termination, by the payment then the amount payable
is the amount of the employee and employer contributions that would have
been paid plus interest compounded annually at a rate equal to the greater of
the average yield on the pension accumulation fund Pension
Accumulation Fund for the preceding calendar year or the actuarial
investment rate‑of‑return assumption, as adopted by the Board of
Trustees.
(2)(3) When If
the reinstatement to service is by settlement agreement voluntarily entered
into by the affected parties, by the payment of a lump‑sum amount, the
member shall purchase this service by paying a lump sum amount to the annuity
savings fund then the amount payable is an amount equal to the full
liability increase to the Retirement System due to the additional
service credits plus an administrative fee that is set by the Board of
Trustees. The full liability increase shall be calculated on the basis of
the same assumptions used for the purposes of the actuarial valuation of
the liabilities of the Retirement System, except for the following assumptions
specific to this calculation: (i) the allowance shall be assumed to commence at
the earliest age at which the member could retire on an unreduced retirement
allowance and (ii) there shall be assumed annual postretirement
allowance increases as set by the Board of Trustees upon the advice of
the consulting actuary. The calculation of the amount payable shall also
include an administrative fee to be set by the Board.The amount payable
under this subdivision is required to be paid as a lump sum amount to the
Annuity Savings Fund.
Subject to the requirements of this
subsection, an employer may pay all or part of the cost of a service
purchase of amount payable due under this subsection for a member in
service. To the extent that the purchase amount is paid by the
employer, the cost amount paid by the employer shall be credited
to the pension accumulation fund. Pension Accumulation Fund. To
the extent the purchase amount is paid by the member, the cost
amount paid by the member shall be credited to the member's annuity
savings account; provided, however, that an accumulated contributions
and interest in the Annuity Savings Fund. An employer does shall not
discriminate against any employed member or group of employed members in paying
all or any part of the cost of payment required under this subsection
for the retroactive membership service.
In the event If a member received a
return of accumulated contributions subsequent to an involuntary termination as
provided in G.S. 135‑5(f), then the member may redeposit,
within 90 days after reinstatement retroactive to the date of prior involuntary
termination, in the annuity savings fund Annuity Savings Fund by
single payment payment, an amount equal to the total amount the
member previously withdrew plus regular interest and restore the creditable
service forfeited upon receiving the return of accumulated contributions.
(f) Purchase of Service
Credits Through Rollover Contributions From Certain Other Plans.
Notwithstanding any other provision of this Article, Article to the
contrary, subject to the requirements of this subsection and any rules adopted,
or policies established, by the Board of Trustees and without regard to any
limitations on contributions otherwise set forth in this Article, a member,
who is eligible to restore or purchase payments or repayments made for membership
or creditable service pursuant to the provisions of G.S. 135‑4, may,
subject to such rules and regulations established by the Board of Trustees,
purchase such service credits allowed under this section or any other
provision of this Article may be made by a member through rollover
contributions to the Annuity Savings Fund from (i) an any of the
following sources:
(1) An annuity contract described in Section
403(b) of the Internal Revenue Code, (ii) an Code.
(2) An eligible plan under Section 457(b) of the
Internal Revenue Code which that is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state, (iii) an state.
(3) An individual retirement account or annuity
described in Section 408(a) or 408(b) of the Internal Revenue Code that is
eligible to be rolled over and would otherwise be includible in gross income,
or (iv) a income.
(4) A qualified plan described in Section 401(a)
or 403(a) of the Internal Revenue Code. Notwithstanding the foregoing,
No rollover contribution shall
be made under this subsection, and the
Retirement System shall not accept any amount as a rollover contribution contribution,
unless such the amount required for the payment or
repayment is eligible to be rolled over to a qualified trust in accordance
with applicable law and the member provides evidence satisfactory to the
Retirement System that such the amount qualifies for rollover
treatment. Unless received by the Retirement System in the form of a direct
rollover, the rollover contribution must be paid to the Retirement System on or
before the 60th day after the date it was received by the member.
Purchase of Service Credits
Through Plan‑to‑Plan Transfers. Notwithstanding any other
provision of this Article, and without regard to any limitations on
contributions otherwise set forth in this Article, a member, who is eligible to
restore or purchase membership or creditable service pursuant to the provisions
of G.S. 135‑4, may, subject to such rules and regulations
established by the Board of Trustees, purchase such service credits through a
direct transfer to the Annuity Savings Fund of funds from (i) an annuity
contract described in Section 403(b) of the Internal Revenue Code or (ii) an
eligible plan under Section 457(b) of the Code which is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state.
(g) Purchase of Service
Credits Through Plan‑to‑Plan Transfers. Notwithstanding any other
provision of this Article, Article to the contrary, subject to the
requirements of this subsection and any rules adopted, or policies established,
by the Board of Trustees and without regard to any limitations on
contributions otherwise set forth in this Article, a member, who is eligible
to restore or purchase payments or repayments made for membership or
creditable service pursuant to the provisions of G.S. 135‑4, may,
subject to such rules and regulations established by the Board of Trustees,
purchase such service credits allowed under this section or any other
provision of this Article may be made by a member through a direct transfer
to the Annuity Savings Fund of funds from (i) the any of the
following sources:
(1) An annuity contract described in Section 403(b) of the Internal Revenue Code.
(2) An eligible plan under Section 457(b) of the Internal Revenue Code that is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state.
(3) Supplemental Retirement Income Plans A, B, or C of
North Carolina or (ii) anyCarolina.
(4) Any other defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code which that
is maintained by the State of North Carolina, a political subdivision of a
the State or any other state, or any agency or instrumentality of a
the State or any other state or political subdivision of a the
State or any other state."
SECTION 4.(a) G.S. 135‑1(8) reads as rewritten:
"(8) "Creditable
service" shall mean the total of "prior service" plus
"membership service" plus service, both noncontributory and
purchased, for which credit is allowable as provided in G.S. 135‑4.
under this Article. In no event, however, shall "creditable service"
be deemed "membership service" for the purpose of determining
eligibility for benefits accruing under this Chapter.Article."
SECTION 4.(b) G.S. 135‑4 is amended by adding a new subsection to read:
SECTION 5. G.S. 135‑8(b) reads as rewritten:
"(b) Annuity Savings
Fund. The annuity savings fund shall be a fund in which shall be
accumulated contributions Contributions from the compensation of
members to provide for their annuities. annuities shall be deposited
into the Annuity Savings Fund. Contributions to any and payments
from the annuity savings fund Annuity Savings Fund shall be made
as follows:
(5) The Board of Trustees may approve the purchase of creditable service by any member for leaves of absence or for interrupted service to an employer only for the purpose of acquiring knowledge, talents, or abilities and to increase the efficiency of service to the employer, subject to the provisions of this subdivision. A leave of absence or interrupted service may be approved for purchase under this subdivision for a period of employment as a teacher in a charter school. Any other leave of absence or interrupted service shall qualify for purchase under this subdivision only if (i) during the time of the leave or interrupted service the member is enrolled and participates in a full time degree program at an accredited institution of higher education, (ii) the member is not paid compensation, other than a stipend resulting from participation in a full‑time degree program, for the activity in which he or she is acquiring knowledge, talents, or abilities, and (iii) the service is not purchased for any month in which the member performed any services for any of the organizations listed in G.S. 135‑27(a) or G.S. 135‑27(f), or a successor to any of those organizations. Approval by the Board of Trustees under this subdivision shall be made prior to the purchase of the creditable service, is limited to a career total of six years for each member, and may be obtained in the following manner:
c. Educational program prior
to July 1, 1981. Creditable service for leaves of absence or interrupted
service for educational purposes prior to July 1, 1981, may be purchased on
or before December 31, 2038, by a member, before or after retirement, who
returned as a contributing employee or teacher within 12 months after completing
the educational program and completed 10 years of subsequent membership service,
service. Purchases under this sub‑subdivision shall be made by
making a lump sum payment into the annuity savings fund Annuity
Savings Fund equal to the full cost of the service credits calculated on
the basis of the assumptions used for purposes of the actuarial valuation of
the system's liabilities and shall take into account the retirement allowance
arising on account of the additional service credit commencing at the earliest
age at which the member could retire on an unreduced retirement allowance as
determined by the Board of Trustees upon the advice of the consulting actuary,
plus a fee to be determined by the Board of Trustees.
Payments
required to be made by the member, the employer, or both under subparagraphs
a or b sub‑subdivision a. or b. of this subdivision are due by
the 15th of the month following the month for which the service credit is
allowed and payments made after the due date shall be assessed a penalty, in
lieu of interest, of one percent (1%) per month or fraction thereof the payment
is made beyond the due date; provided, that these payments shall be made prior
to retirement and provided further, that if the member did not become a
contributing member within 12 months after completing the educational program
and failed to complete three years of subsequent membership service, except in
the event of death or disability, any payment made by the member including
penalty shall be refunded with regular interest thereon and the service credits
cancelled prior to or at retirement.
."
Part II. RECODIFY AND STANDARDIZE SERVICE PURCHASE UNDER THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM
SECTION 6. Article 3 of Chapter 128 of the General Statutes is amended by adding a new G.S. 128‑26.5 to be entitled "Creditable service purchases."
SECTION 7.(a) The second through sixth sentences of subsection (h2) of G.S. 128‑26 are recodified as subsection (a) of G.S. 128‑26.5, as created by Section 6 of this act.
SECTION 7.(b) The first sentence of subsection (h2) of G.S. 128‑26 is recodified as the first sentence of subdivision (a)(1) of G.S. 128‑26.5, and subsection (i1) of G.S. 128‑26 is recodified as the second through seventh sentences of subdivision (a)(1) of G.S. 128‑26.5, as created by Section 6 of this act. The remaining subsection catch line for subsection (i1) of G.S. 128‑26 is repealed.
SECTION 7.(c) Subsection (j3) of G.S. 128‑26 is recodified as subdivision (a)(2) of G.S. 128‑26.5, as created by Section 6 of this act.
SECTION 7.(d) Subsection (p1) of G.S. 128‑26 is recodified as subdivision (a)(3) of G.S. 128‑26.5, as created by Section 6 of this act, and the existing subunits of subsection (p1) of G.S. 128‑26 are redesignated accordingly.
SECTION 7.(e) Subsection (r) of G.S. 128‑26 is recodified as subdivision (a)(4) of G.S. 128‑26.5, as created by Section 6 of this act, and the existing subunits of subsection (r) of G.S. 128‑26 are redesignated accordingly.
SECTION 7.(f) Subsection (q1) of G.S. 128‑26 is recodified as subdivision (a)(5) of G.S. 128‑26.5, as created by Section 6 of this act.
SECTION 7.(g) Subsection (s) of G.S. 128‑26 is recodified as subdivision (a)(7) of G.S. 128‑26.5, as created by Section 6 of this act.
SECTION 7.(h) Subsection (j1) of G.S. 128‑26 is recodified as subsection (b) of G.S. 128‑26.5, as created by Section 6 of this act.
SECTION 7.(i) Subsection (l) of G.S. 128‑26 is recodified as subsection (c) of G.S. 128‑26.5, as created by Section 6 of this act.
SECTION 7.(j) Subsection (m) of G.S. 128‑26 is recodified as subsection (d) of G.S. 128‑26.5, as created by Section 6 of this act.
SECTION 7.(k) Subsection (v) of G.S. 128‑26 is recodified as subsection (e) of G.S. 128‑26.5, as created by Section 6 of this act.
SECTION 7.(l) Subsection (t) of G.S. 128‑26 is recodified as subsection (f) of G.S. 128‑26.5, as created by Section 6 of this act.
SECTION 7.(m) Subsection (u) of G.S. 128‑26 is recodified as subsection (g) of G.S. 128‑26.5, as created by Section 6 of this act.
SECTION 7.(n) Subsections (h1), (i), (j2), and (q) of G.S. 128‑26 are repealed.
SECTION 8. G.S. 128‑26.5, as created by Section 6 of this act and amended by Section 7 of this act, reads as rewritten:
"§ 128‑26.5. Creditable service purchases.
(a) The amount of
creditable service purchased under this subsection may not exceed a total of
five years. The member shall purchase this service General Purchases of
Service Credit. Any member in service with five or more years of membership
service may purchase creditable service authorized under this subsection by
paying a lump sum amount to the Annuity Savings Fund Fund. The amount
payable shall be equal to the full liability increase of the Retirement
System due to the additional service credits purchased plus an
administrative fee that is set by the Board of Trustees. The full liability
increase shall be calculated on the basis of the same assumptions
used for the purposes of the actuarial valuation of the liabilities of the
Retirement System, except for the following assumptions specific to this
calculation: (i) the allowance shall be assumed to commence at the earliest age
at which the member could retire on an unreduced retirement allowance and (ii) there
shall be assumed annual postretirement allowance increases as set by
the Board of Trustees upon the advice of the consulting actuary.
Subject to the requirements of this
subsection, an employer may pay all or part of the cost of a service purchase
of a member in service. To the extent that the purchase is paid by the
employer, the cost amount paid by the employer shall be credited
to the pension accumulation fund. Pension Accumulation Fund. To
the extent that the purchase is paid by the member, the cost amount paid
by the member shall be credited to the member's annuity savings account.accumulated
contributions and interest in the Annuity Savings Fund.
The total amount of creditable service purchased under each subdivision of this section shall not exceed five years. No purchase of service credit under any subdivision of this section shall be made if a benefit is allowable under another public retirement system as a result of the service. If there is a conflict between a provision of G.S. 128‑26 and a provision of this subsection, then this subsection shall control.
The following purchases of creditable service are authorized under this subsection:
(1) Notwithstanding any
provision of this Chapter to the contrary on and after January 1, 2023, any
member in service with five or more years of membership service may purchase
creditable service for service as a member of the General Assembly not
otherwise creditable under this section, provided the service is not credited
in the Legislative Retirement Fund nor the Legislative Retirement System, by
paying a total lump sum payment. Notwithstanding any other provision of this
Article to the contrary, on and after January 1, 2022, any member who withdrew
his or her contributions in accordance with the provisions of G.S. 128‑27(f)
or G.S. 135‑5(f) or the rules of the Law Enforcement Officers'
Retirement System, and who subsequently returns to service and completes five
years of membership service upon that return, while in service may purchase an
amount of creditable service totaling the amount of the membership service
associated with the withdrawn contributions, provided that the total of the
creditable service purchased under this subsection may not exceed a total of
five years. The member shall purchase this service by paying a lump sum amount
to the Annuity Savings Fund equal to the full liability increase due to the
additional service credits on the basis of the assumptions used for the
purposes of the actuarial valuation of the liabilities of the Retirement
System, except for the following assumptions specific to this calculation: (i)
the allowance shall be assumed to commence at the earliest age at which the
member could retire on an unreduced retirement allowance and (ii) assumed
annual postretirement allowance increases as set by the Board of Trustees upon
the advice of the consulting actuary. The calculation of the amount payable
shall also include an administrative fee to be set by the Board.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is paid
by the member, the cost paid by the member shall be credited to the member's
annuity savings account.Withdrawn service.
Service withdrawn in accordance with the provisions of any of the following,
limited to a total maximum purchase of five years:
a. G.S. 120‑4.25.
b. G.S. 128‑27(f).
c. G.S. 135‑5(f).
d. G.S. 135‑62.
e. Any rules adopted under Article 12 of Chapter 143 of the General Statutes, as it existed prior to 1986.
(2) Notwithstanding any
provision of this Article to the contrary, on and after January 1, 2022, any
member in service with five or more years of membership service may purchase
creditable service Federal, state, or local government service.
Service previously rendered to the federal government or to any state,
territory, or other governmental subdivision of the United States other than
this State by paying a total lump sum payment. The amount of creditable
service purchased under this subsection may not exceed a total of five years.
The member shall purchase this service by paying a lump sum amount to the
Annuity Savings Fund equal to the full liability increase due to the additional
service credits on the basis of the assumptions used for the purposes of the
actuarial valuation of the liabilities of the Retirement System, except for the
following assumptions specific to this calculation: (i) the allowance shall be
assumed to commence at the earliest age at which the member could retire on an
unreduced retirement allowance and (ii) assumed annual postretirement allowance
increases as set by the Board of Trustees upon the advice of the consulting
actuary. The increases as set by the Board of Trustees upon the advice of the
consulting actuary shall also include an administrative fee to be set by the
Board.
Creditable
service under this subsection shall be allowed only at the rate of one year of
out‑of‑state service for each year of membership service in this
State, with a maximum allowable of five years of out‑of‑state
service. Such service State. Service
under this subdivision is limited to full‑time
service that would be allowable under the laws governing this Retirement
System. Credit will be allowed only if no benefit is allowable in another
public retirement system as a result of the service.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.
(3) Part‑Time Service
Credit. Notwithstanding any other provision of this Article to the contrary,
any member in service with five or more years of membership service may
purchase service Part‑time service. Service previously
rendered as a part‑time teacher or employee of an employer, as defined in
G.S. 135‑1(11) or G.S. 128‑21(11), except under either
G.S. 135‑1 or G.S. 128‑21. For the purposes of this
subdivision, the following service may not is not eligible to be
purchased:
a. Part‑time service rendered as a bus driver to a public school while a full‑time high school student.
b Temporary or part‑time service rendered while a full‑time student in pursuit of a degree or diploma in a degree‑granting program, unless that service was rendered on a permanent part‑time basis and required at least 20 hours of service per week.
Payment
for service purchased The amount of the
single lump sum to be paid for the purchase of service credit under this subsection subdivision shall be made
in a single lump sum in an amount calculated by applying the ratio of
actual gross compensation earned as a part‑time employee to the gross
compensation that would have been earned as a full‑time employee to the
period of service rendered in months. The member shall purchase this service
by paying a lump sum amount to the Annuity Savings Fund equal to the full
liability increase due to the additional service credits on the basis of the
assumptions used for the purposes of the actuarial valuation of the liabilities
of the Retirement System, except for the following assumptions specific to this
calculation: (i) the allowance shall be assumed to commence at the earliest age
at which the member could retire on an unreduced retirement allowance and (ii)
assumed annual postretirement allowance increases as set by the Board of
Trustees upon the advice of the consulting actuary. The calculation of the
amount payable shall also include an administrative fee to be set by the Board.
The
Board of Trustees shall adopt rules regarding how much service in any year, as
based on compensation, is equivalent to one year of service in proportion to
earnable compensation, but in In no case shall more than one year of service be creditable
for all service in one year. Service rendered for the regular school year in
any district shall be equivalent to one year of service.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.
(4) Credit at Full Cost
for Temporary Government Employment. Notwithstanding any other
provisions of this Chapter, any member in service with five or more years of
membership service may purchase creditable service for government employment
when classified as service. Service previously rendered on a
temporary employee subject to all basis to an employer, as defined
under either G.S. 135‑1 or G.S. 128‑21, and that meets
both of the following conditions:
a. The member was employed by an employer as
defined in G.S. 128‑21(11) or G.S. 135‑1(11).
b.a. The member's
temporary employment met all other requirements of G.S. 128‑21(10),
or G.S. 135‑1(10) or (25).member would have met the
definition of employee or teacher under either G.S. 135‑1 or G.S. 128‑21
except for the temporary nature of the service.
c. The member has completed five years or more of
membership service.
d.b. The member has
acquired from the employer such all certifications of temporary
employment as that are required by the Board of Trustees.
The
amount of creditable service purchased under this subsection may not exceed a
total of five years. A member shall purchase this service by making a lump sum
payment into the Annuity Savings Fund equal to the full liability increase due
to the additional service credits on the basis of the assumptions used for the
purposes of the actuarial valuation of the liabilities of the Retirement
System, except for the following assumptions specific to this calculation: (i)
the allowance shall be assumed to commence at the earliest age at which the
member could retire on an unreduced retirement allowance and (ii) assumed
annual postretirement allowance increases as set by the Board of Trustees upon
the advice of the consulting actuary. The calculation of the amount payable
shall also include an administrative fee to be set by the Board.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.
(5) Credit at Full Cost
for Probationary Employment Purchased On or After January 1, 2022.
Notwithstanding any other provision of this Chapter, on and after January 1,
2022, a member in service with five or more years of service may purchase
creditable service for employment with an employer local government service.
Service previously rendered to any local employer, as defined in this Article
Article, when considered to be performed in a
probationary or employer‑imposed waiting period status and thereby not
regularly employed that occurred between date of employment and date
of membership service with the retirement system. The amount of creditable
service purchased under this subsection may not exceed five years.Retirement
System.
The
member shall purchase this service by paying a lump sum amount to the Annuity
Savings Fund equal to the full liability increase due to the additional service
credits on the basis of the assumptions used for the purposes of the actuarial
valuation of the liabilities of the Retirement System, except for the following
assumptions specific to this calculation: (i) the allowance shall be assumed to
commence at the earliest age at which the member could retire on an unreduced
retirement allowance and (ii) assumed annual postretirement allowance increases
as set by the Board of Trustees upon the advice of the consulting actuary. The
increases as set by the Board of Trustees upon the advice of the consulting
actuary shall also include an administrative fee to be set by the Board.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.
(6) Involuntary furlough. Periods of interrupted service due to involuntary administrative furlough caused by the lack of funds to support the position.
(7) Credit at Full Cost
for Employment Not Otherwise Creditable. Notwithstanding any other
provisions of this Chapter, any member in service with five or more years of
membership service may purchase creditable service for any employment not
otherwise creditable. Service not creditable in any other retirement system
or plan that was previously rendered as an employee, as defined in
G.S. 128‑21(10), under G.S. 128‑21, of a local
government employer not creditable in any other retirement system or plan,
provided that the that meets both of the following criteria:
a. The local government employer is, at the
time of purchase, a participating employer in the Retirement System but System.
b. The local government employer was not a
participating employer in the Retirement System at the time the service was
rendered by the member. The amount of creditable service purchased under
this subsection may not exceed a total of five years. A member shall purchase
this service by making a lump sum payment into the Annuity Savings Fund equal
to the full liability increase due to the additional service credits on the
basis of the assumptions used for the purposes of the actuarial valuation of
the liabilities of the Retirement System, except for the following assumptions
specific to this calculation: (i) the allowance shall be assumed to commence at
the earliest age at which the member could retire on an unreduced retirement
allowance and (ii) assumed annual postretirement allowance increases as set by
the Board of Trustees upon the advice of the consulting actuary. The
calculation of the amount payable shall also include an administrative fee to
be set by the Board.
Subject
to the requirements of this subsection, an employer may pay all or part of the
cost of a service purchase of a member in service. To the extent that the
purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.
(b) Armed Service Credit.
Notwithstanding any other provision of this Chapter, Article to
the contrary, any member and or any retired member as
herein described may purchase creditable service for service in the Armed
Forces of the United States, not otherwise allowed, States by
paying a total lump sum payment determined as follows:
(1) For On or
before December 31, 2038, members who completed 10 years of membership
service, and retired members who completed 10 years of membership service prior
to retirement, and whose membership began on or prior to January 1, 1988, and
who make such may purchase this service within three years
after first becoming eligible, the cost shall be eligible by paying an
amount equal to the monthly compensation the member earned when the member
first entered membership service times the employee contribution rate at that
time times the months of service to be purchased multiplied by a factor
equivalent to the investment return assumptions determined by the Board of
Trustees, compounded annually, from the initial year of membership to the year
of payment so as to equal one‑half of the cost of allowing such service,
plus an administrative fee to be set by the Board of Trustees.
(2) For members Members
who complete five years of membership service, and retired members
who complete five years of membership service prior to retirement, and eligible
members and retired members covered by paragraph (1) of this subdivision,
whose membership began on or before January 1, 1988, and who were
eligible to purchase service credits under subdivision (1) of this subsection but
who did not or do not make such purchase within three years after first
becoming eligible, the cost shall be an amount equal to the full liability
of the service credits calculated on the basis of the assumptions used for the
purposes of the actuarial valuation of the System's liabilities and shall take
into account the retirement allowance arising on account of the additional
service credits commencing at the earliest age at which the member could retire
on an unreduced allowance, as determined by the Board of Trustees upon the
advice of the consulting actuary, plus an administrative fee to be set by the
Board of Trustees. Notwithstanding the foregoing provisions of this subsection
that provide for the purchase of service credits, the term "full liability"
includes assumed post‑retirement allowance increases, as determined by
the Board of Trustees, from the earliest age at which a member could retire on
an unreduced service retirement allowance.eligible,
may purchase this service by paying a lump sum amount to the Annuity Savings
Fund. The amount payable shall be equal to the full liability increase to the
Retirement System due to the additional service credits purchased plus an
administrative fee that is set by the Board of Trustees. The full liability increase
shall be calculated on the basis of the same assumptions used for the purposes
of the actuarial valuation of the liabilities of the Retirement System, except
for the following assumptions specific to this calculation: (i) the allowance
shall be assumed to commence at the earliest age at which the member could
retire on an unreduced retirement allowance and (ii) there shall be assumed
annual postretirement allowance increases set by the Board of Trustees upon the
advice of the consulting actuary.
Creditable service allowed under
this subdivision subsection shall be only for the initial period
of "active duty", as defined in 38 U.S. Code Section 101(21), in the
Armed Forces of the United States up to the date the member was first eligible
to be separated and released and for subsequent periods of "active duty",
as defined in 38 U.S. Code Section 101(21), as required by the Armed Forces of
the United States up to the date of first eligibility for separation or
release, but shall not include periods of active duty in the Armed Forces of
the United States creditable in any other retirement system except the National
Guard or any reserve component of the Armed Forces of the United States, and
shall not include periods of "active duty for training", as defined
in 38 U.S. Code Section 101(22), or periods of "inactive duty
training", as defined in 38 U.S. Code Section 101(23), rendered in any
reserve component of the Armed Forces of the United States. Provided,
creditable Creditable service may shall be allowed
only for active duty in the Armed Forces of the United States of a member that
resulted in a general or honorable discharge from duty. The member shall submit
satisfactory evidence of the service claimed. For purposes of this subsection,
membership service may shall include any membership or prior
service credits transferred to this Retirement System pursuant to G.S. 128‑24.
(c) Periods When in Receipt
of Benefits Under the North Carolina Workers' Compensation Act. Notwithstanding
any other provision of this Chapter, Article to the contrary, any
member may purchase creditable service for periods of employer approved leaves
of absence when in receipt of benefits under the North Carolina Workers'
Compensation Act. This service All of the following apply to
purchases under this subsection:
(1) Service shall be purchased by paying a cost calculated in the following manner:
(1)a. Leaves of
Absence Terminated Prior to July 1, 1983. The cost to a A member
whose employer approved leave of absence, when in receipt of benefits under the
North Carolina Workers' Compensation Act, terminated upon return to service
prior to July 1, 1983, shall be a may purchase creditable service for
that period by paying a lump sum amount payable to the Annuity
Savings Fund Fund. The amount payable shall be equal to the full
liability of the service credits calculated on the basis of the assumptions
used for purposes of the actuarial valuation of the system's liabilities, and
shall take into account the retirement allowance arising on account of the
additional service credit commencing at the earliest age at which the member
could retire on an unreduced retirement allowance, as determined by the board
of trustees upon the advice of the consulting actuary, plus an administrative
fee to be set by the Board of Trustees. Notwithstanding the foregoing
provisions of this subdivision that provide for the purchase of service
credits, the terms "full cost", "full liability", and
"full actuarial cost" include assumed annual post‑retirement
allowance increases, as determined by the Board of Trustees, from the earliest
age at which a member could retire on an unreduced service allowance.increase
to the Retirement System due to the service credits purchased plus an
administrative fee that is set by the Board of Trustees. The full liability
increase shall be calculated on the basis of the same assumptions used for the
purposes of the actuarial valuation of the liabilities of the Retirement
System, except for the following assumptions specific to this calculation: (i)
the allowance shall be assumed to commence at the earliest age at which the
member could retire on an unreduced retirement allowance and (ii) there shall
be assumed annual postretirement allowance increases set by the Board of
Trustees upon the advice of the consulting actuary.
(2)b. Leaves of
Absence Terminating On and After July 1, 1983. The cost to a A member
whose employer approved leave of absence, when in receipt of benefits under the
North Carolina Workers' Compensation Act, terminates on and after July 1, 1983,
shall be a may purchase creditable service for that period by paying
a lump sum amount due and payable to the Annuity Savings Fund Fund.
If the creditable service is purchased within six months from end of the
leave of absence absence, then the amount payable shall be equal
to the total employee and employer percentage rates of contribution in effect
at the time of purchase and based on the annual rate of compensation of the
member immediately prior to the leave of absence; Provided, however, the
cost to a member whose amount due absence. If the creditable service is not
purchased and the amount payable is not paid within six months from the end
of the leave of absence shall absence, then the amount payable shall be
the amount due as if the purchase had taken place
prior to six months from the end of the leave of absence plus one
percent (1%) per month penalty for each month or fraction thereof the payment
is made beyond the six‑month period.
(2) Whenever the creditable service purchased pursuant
to this subsection is for a period that occurs during the four consecutive
calendar years that would have produced the highest average annual compensation
pursuant to G.S. 128‑21(5) had the member not been on leave of
absence without pay, then the compensation that the member would have received
during the purchased period shall be included in calculating the member's
average final compensation. In such these cases, the compensation
that the member would have received during the purchased period shall be based
on the annual rate of compensation of the member immediately prior to the leave
of absence.
(3) In the case of a law enforcement officer electing
to purchase service under this section subsection who is in
receipt of benefits under the North Carolina Workers' Compensation Act due to
serious bodily injury suffered in the line of duty as a result of an
intentional or unlawful act of another, as certified by the head of the
employing law enforcement agency, and whose approved leave of absence terminates
on or before a return to service on and after August 1, 2006, the employer
percentage rate of contribution payable under subdivision (2) sub‑subdivision
b. of subdivision (2) of this subsection shall be made by the employer that
granted the leave of absence. The cost to the law enforcement officer shall be
reduced by the amount paid by the employer. For purposes of this subsection,
subdivision, "serious bodily injury" means bodily injury
that creates a substantial risk of death, or that causes serious
permanent disfigurement, a coma, a permanent or protracted condition
that causes extreme pain, or a permanent or protracted loss or
impairment of the function of any bodily member or organ, or that results in
prolonged hospitalization.
Nothing in this subsection prevents
an employer from voluntarily paying all or a part of the employee portion of
the total cost of total payment due for the service credit purchased,
and the purchased. The employer does shall not
discriminate against any eligible law enforcement officer in this subsection
employed by the employer by paying all or a part of that portion of cost.
the total payment due. To the extent the employee portion of the
total payment due is paid by the employer, the employee portion paid by the
employer shall be credited to the Pension Accumulation Fund; to Fund.
To the extent the employee portion of the total payment due is paid
by the member, the employee portion paid by the member shall be credited to the
member's annuity savings account. accumulated contributions and
interest in the Annuity Savings Fund. A member shall pay any part of the
employee portion of the total cost payment due that is not paid
by the employer.
(d) Omitted Membership
Service. A member who (i) had service as an employee employee,
as defined in G.S. 135‑1(10) and G.S. 128‑21(10) under
G.S. 135‑1 or G.S. 128‑21, or as a teacher teacher,
as defined in G.S. 135‑1(25) under G.S. 135‑1,
and who (ii) was omitted from contributing membership through
error may shall be allowed the omitted membership service,
after submitting service if the requirements of this subsection are met
and the total payment required for that service under this subsection is made. Submission
of clear and convincing evidence of the error, as follows:error
is required prior to approval of, and payment for, the omitted membership
service. Payment for service under this subsection shall be made in the
following manner:
(1) within Within 90
days of the omission, by the payment of employee and employer contributions
that would have been paid; orpaid.
(2) after After 90
days and prior to three years of the omission, by the payment of the employee
and employer contributions that would have been paid plus interest compounded
annually at a rate equal to the greater of the average yield on the pension
accumulation fund Pension Accumulation Fund for the preceding
calendar year or the actuarial investment rate‑of‑return
assumption, as adopted by the Board of Trustees; orTrustees.
(3) after After three
years of the omission, by the payment of an amount equal to the full cost of
the service credits calculated on the basis of the assumptions used for the
purposes of the actuarial valuation of the System's liabilities, and shall take
into account the additional retirement allowance arising on account of such
additional service credit commencing at the earliest age at which a member
could retire on an unreduced retirement allowance, as determined by the Board
of Trustees upon the advice of the consulting actuary, plus an administrative
fee to be set by the Board of Trustees. Notwithstanding the foregoing
provisions of this subdivision that provide for the purchase of service
credits, the terms "full cost", "full liability", and
"full actuarial cost" include assumed annual post‑retirement
allowance increases, as determined by the Board of Trustees, from the earliest
age at which a member could retire on an unreduced service allowance.paying a lump sum amount to the Annuity Savings Fund.
The amount payable shall be equal to the full liability increase of the
Retirement System due to the service credits purchased plus an administrative
fee that is set by the Board of Trustees. The full liability increase shall be
calculated on the basis of the same assumptions used for the purposes of the
actuarial valuation of the liabilities of the Retirement System, except for the
following assumptions specific to this calculation: (i) the allowance shall be
assumed to commence at the earliest age at which the member could retire on an
unreduced retirement allowance and (ii) there shall be assumed annual
postretirement allowance increases set by the Board of Trustees upon the advice
of the consulting actuary.
Nothing contained in this
subsection shall prevent an employer or member from paying all or a part of the
cost of required payment for the omitted membership service;
and to service. To the extent the amount is paid by the
employer, the cost amount paid by the employer shall be credited
to the pension accumulation fund; and to Pension Accumulation Fund.
To the extent the amount is paid by the member, the cost amount
paid by the members member shall be credited to the member's annuity
savings account; provided, however, an accumulated contributions and
interest in the Annuity Savings Fund. An employer does shall not
discriminate against any employed member or group of employed members
in his employ in paying all or any part of the cost of payment
required under this subsection for the omitted membership service. In
the event an employer pays all or a part of the full actuarial cost as determined
in subdivision (3) of this subsection, the employer may, at its option, pay such
amount either in a lump sum or by increasing its "accrued liability contribution"
for the remainder of its accrued liability period. In the event an employer has
satisfied its accrued liability contribution, the employer may amortize its
portion of the full actuarial cost over a period not to exceed ten years. The
expense of making an actuarial valuation to determine the accrued liability
contribution or the additional accrued liability contribution, required to
amortize the portion of the full actuarial cost paid by the employer, shall be
paid by the employer in a lump sum at the time of the actuarial valuation.
(e) Retroactive Retroactively
Reinstated or Restored Membership Service. A member who is reinstated to
service as an employee employee, as defined in G.S. 128‑21(10)
under G.S. 128‑21, retroactively to the date of prior
involuntary termination with back pay and associated benefits may shall
be allowed membership service, after submitting service for that
period of reinstated service if the requirements of this subsection are met and
the total payment required for that service under this subsection is made. Submission
of clear and convincing evidence of the reinstatement, payment of back pay,
and restoration of associated benefits, as follows:benefits is
required prior to the approval of and payment for the retroactive membership
service. The amount payable for service under this subsection shall be
calculated in the following manner:
(1) When If the
reinstatement to service is by court order and is:
a. Within occurs within 90 days of the
involuntary termination, by the payment then the amount payable is
the amount of employee and employer contributions that would have been paid;
orpaid.
b. After
(2) If the reinstatement to service is by court
order and occurs after 90 days of the involuntary termination, by the
payment then the amount payable is the amount of the employee and
employer contributions that would have been paid plus interest compounded
annually at a rate equal to the greater of the average yield on the pension
accumulation fund Pension Accumulation Fund for the preceding
calendar year or the actuarial investment rate‑of‑return
assumption, as adopted by the Board of Trustees.
(2)(3) When If
the reinstatement to service is by settlement agreement voluntarily entered
into by the affected parties, by the payment of a lump‑sum amount, the
member shall purchase this service by paying a lump sum amount to the annuity
savings fund then the amount payable shall be equal to the full
liability increase to the Retirement System due to the additional
service credits plus an administrative fee that is
set by the Board of Trustees. The full liability increase shall be calculated on
the basis of the same assumptions used for the purposes of the actuarial
valuation of the liabilities of the Retirement System, except for the following
assumptions specific to this calculation: (i) the allowance shall be assumed to
commence at the earliest age at which the member could retire on an unreduced
retirement allowance and (ii) there shall be assumed annual
postretirement allowance increases as set by the Board of Trustees upon
the advice of the consulting actuary. The calculation of the amount payable
shall also include an administrative fee to be set by the Board.The
amount payable under this subdivision is required to be paid as a lump sum
amount to the Annuity Savings Fund.
Subject to the requirements of this
subsection, an employer may pay all or part of the cost of a service
purchase of amount payable due under this subsection for a member in
service. To the extent that the purchase amount is paid by the
employer, the cost amount paid by the employer shall be credited
to the pension accumulation fund. Pension Accumulation Fund. To
the extent the purchase amount is paid by the member, the cost
amount paid by the member shall be credited to the member's annuity
savings account; provided, however, that an accumulated contributions
and interest in the Annuity Savings Fund. An employer does shall not
discriminate against any employed member or group of employed members in paying
all or any part of the cost of payment required under this subsection
for the retroactive membership service.
In the event If a member received a
return of accumulated contributions subsequent to an involuntary termination as
provided in G.S. 128‑27(f), then the member may redeposit,
within 90 days after reinstatement retroactive to the date of prior involuntary
termination, in the annuity savings fund Annuity Savings Fund by
single payment, an amount equal to the total amount the member previously
withdrew plus regular interest and restore the creditable service forfeited
upon receiving the return of accumulated contributions.
(f) Purchase of Service
Credits Through Rollover Contributions From Certain Other Plans.
Notwithstanding any other provision of this Article, Article to the
contrary, subject to the requirements of this subsection and any rules adopted,
or policies established, by the Board of Trustees and without regard to any
limitations on contributions otherwise set forth in this Article, a member,
who is eligible to restore or purchase payments or repayments made for membership
or creditable service pursuant to the provisions of G.S. 128‑26,
may, subject to such rules and regulations established by the Board of
Trustees, purchase such service credits allowed under this section or any
other provision of this Article may be made by a member through rollover
contributions to the Annuity Savings Fund from (i) an any of the
following sources:
(1) An annuity contract described in Section
403(b) of the Internal Revenue Code, (ii) anCode.
(2) An eligible plan under Section 457(b) of the
Internal Revenue Code which that is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state, (iii) anstate.
(3) An individual retirement account or annuity
described in Section 408(a) or 408(b) of the Internal Revenue Code that is
eligible to be rolled over and would otherwise be includible in gross income,
or (iv) aincome.
(4) A qualified plan described in Section 401(a)
or 403(a) of the Internal Revenue Code.Notwithstanding the foregoing,
No rollover contribution shall
be made under this subsection, and the
Retirement System shall not accept any amount as a rollover contribution contribution,
unless such the amount required for the payment or repayment
is eligible to be rolled over to a qualified trust in accordance with
applicable law and the member provides evidence satisfactory to the Retirement
System that such the amount qualifies for rollover treatment.
Unless received by the Retirement System in the form of a direct rollover, the
rollover contribution must be paid to the Retirement System on or before the
60th day after the date it was received by the member.
Purchase of Service Credits
Through Plan‑to‑Plan Transfers. Notwithstanding any other provision
of this Article, and without regard to any limitations on contributions
otherwise set forth in this Article, a member, who is eligible to restore or
purchase membership or creditable service pursuant to the provisions of
G.S. 128‑26, may, subject to such rules and regulations established
by the Board of Trustees, purchase such service credits through a direct
transfer to the Annuity Savings Fund of funds from (i) an annuity contract
described in Section 403(b) of the Internal Revenue Code or (ii) an eligible
plan under Section 457(b) of the Code which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state.
(g) Purchase of Service
Credits Through Plan‑to‑Plan Transfers. Notwithstanding any other
provision of this Article, Article to the contrary, subject to the
requirements of this subsection and any rules adopted, or policies established,
by the Board of Trustees and without regard to any limitations on
contributions otherwise set forth in this Article, a member, who is eligible
to restore or purchase payments or repayments made for membership or
creditable service pursuant to the provisions of G.S. 128‑26,
may, subject to such rules and regulations established by the Board of
Trustees, purchase such service credits allowed under this section or any
other provision of this Article may be made by a member through a direct
transfer to the Annuity Savings Fund of funds from (i) the any of the
following sources:
(1) An annuity contract described in Section 403(b) of the Internal Revenue Code.
(2) An eligible plan under Section 457(b) of the Internal Revenue Code that is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state.
(3) Supplemental Retirement Income Plans A, B, or C of
North Carolina or (ii) anyCarolina.
(4) Any other defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code which that
is maintained by the State of North Carolina, a political subdivision of a
the State or any other state, or any agency or instrumentality of a
the State or any other state or political subdivision of a the
State or any other state."
SECTION 9.(a) G.S. 128‑21(8) reads as rewritten:
"(8) "Creditable
service" shall mean the total of "prior service" plus
"membership service" plus service, both noncontributory and
purchased, for which credit is allowable as provided in G.S. 128‑26.
under this Article. In no event, however, shall "creditable
service" be deemed "membership service" for the purpose of
determining eligibility for benefits accruing under this Chapter.Article."
SECTION 9.(b) G.S. 128‑26 is amended by adding a new subsection to read:
"(z) Creditable service may be purchased in accordance with G.S. 128‑26.5, or as otherwise provided for in this Article."
SECTION 10. G.S. 128‑30(b) reads as rewritten:
"(b) Annuity Savings
Fund. The annuity savings fund shall be a fund in which shall be
accumulated contributions Contributions from the compensation of
members to provide for their annuities. annuities shall be deposited
into the Annuity Savings Fund. Contributions to and payments from the annuity
savings fund Annuity Savings Fund shall be made as follows:
(4) The Board of Trustees may approve the purchase of creditable service by any member for leaves of absence or for interrupted service to an employer only for the purpose of acquiring knowledge, talents, or abilities and to increase the efficiency of service to the employer, subject to the provisions of this subdivision. A leave of absence or interrupted service may be approved for purchase under this subdivision for a period of employment as a teacher in a charter school. Any other leave of absence or interrupted service shall qualify for purchase under this subdivision only if (i) during the time of the leave or interrupted service the member is enrolled and participates in a full‑time degree program at an accredited institution of higher education, (ii) the member is not paid compensation, other than a stipend resulting from participation in a full‑time degree program, for the activity in which he or she is acquiring knowledge, talents, or abilities, and (iii) the service is not purchased for any month in which the member performed any services for any of the organizations listed in G.S. 135‑27(a) or G.S. 135‑27(f), or a successor to any of those organizations. Approval by the Board of Trustees under this subdivision shall be made prior to the purchase of the creditable service, is limited to a career total of four years for each member, and may be obtained in the following manner:
c. Educational program prior
to July 1, 1981. Creditable service for leaves of absence or interrupted
service for educational purposes prior to July 1, 1981, may be purchased on
or before December 31, 2038, by a member, before or after retirement, who
returned as a contributing employee or teacher within 12 months after
completing the educational program and completed 10 years of subsequent
membership service, service. Purchases under this sub‑subdivision
shall be made by making a lump sum payment into the annuity savings fund
Annuity Savings Fund equal to the full cost of the service credits
calculated on the basis of the assumptions used for purposes of the actuarial
valuation of the system's liabilities and shall take into account the
retirement allowance arising on account of the additional service credit
commencing at the earliest age at which the member could retire on an unreduced
retirement allowance as determined by the board Board of trustees
Trustees upon the advice of the consulting actuary, plus a fee to be
determined by the board Board of trustees.Trustees.
Payments
required to be made by the member and/or member, the employer employer,
or both under subparagraphs a or b sub‑subdivision a. or b.
of this subdivision are due by the 15th of the month following the month
for which the service credit is allowed and payments made after the due date
shall be assessed a penalty, in lieu of interest, of one percent (1%) per month
or fraction thereof the payment is made beyond the due date; provided, that
these payments shall be made prior to retirement and provided further, that if
the member did not become a contributing member within 12 months after
completing the educational program and failed to complete three years of
subsequent membership service, except in the event of death or disability, any
payment made by the member including penalty shall be refunded with regular
interest thereon and the service credits cancelled prior to or at retirement.
."
Part III. RECODIFY AND STANDARDIZE SERVICE PURCHASE UNDER THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM
SECTION 11. Article 4 of Chapter 135 of the General Statutes is amended by adding a new G.S. 135‑56.5 to be entitled "Creditable service purchases."
SECTION 12.(a) The third through seventh sentences of subsection (b1) of G.S. 135‑56 are recodified as subsection (a) of G.S. 135‑56.5, as created by Section 11 of this act.
SECTION 12.(b) The second sentence of subsection (b1) of G.S. 135‑56 is recodified as the first sentence of subdivision (a)(1) of G.S. 135‑56.5, as created by Section 11 of this act, and subsection (e1) of G.S. 135‑56 is recodified as the second through seventh sentences of that subdivision.
SECTION 12.(c) The first through fifth sentences and the seventh sentence of G.S. 135‑56.2 are recodified as subdivision (a)(2) of G.S. 135‑56.5, as created by Section 11 of this act.
SECTION 12.(d) Subsection (d1) of G.S. 135‑56 is recodified as subdivision (a)(11) of G.S. 135‑56.5, as created by Section 11 of this act.
SECTION 12.(e) Subsection (a) of G.S. 135‑56.3 is recodified as subsection (c) of G.S. 135‑56.5, as created by Section 11 of this act.
SECTION 12.(f) Subsection (b) of G.S. 135‑56.3 is recodified as subsection (d) of G.S. 135‑56.5, as created by Section 11 of this act.
SECTION 12.(g) Subsections (b), (b1), (d), and (e) of G.S. 135‑56 are repealed.
SECTION 12.(h) The sixth sentence of G.S. 135‑56.2 is recodified as subsection (c) of G.S. 135‑70.1.
SECTION 13. G.S. 135‑56.5, as created by Section 11 of this act and amended by Section 12 of this act, reads as rewritten:
"§ 135‑56.5. Creditable service purchases.
(a) The member shall
purchase this service General Purchases of Service Credit. Any member
in service with five or more years of membership service may purchase
creditable service authorized under this subsection by paying a lump sum
amount to the Annuity Savings Fund Fund. The amount payable shall be equal
to the full liability increase of the Retirement System due to the
additional service credits purchased plus an administrative fee that is set
by the Board of Trustees. The full liability increase shall be calculated on
the basis of the same assumptions used for the purposes of the actuarial
valuation of the liabilities of the Retirement System, except for the following
assumptions specific to this calculation: (i) the allowance shall be assumed to
commence at the earliest age at which the member could retire on an unreduced
retirement allowance and (ii) there shall be assumed annual
postretirement allowance increases as set by the Board of Trustees upon
the advice of the consulting actuary. The increases as set by the Board of
Trustees upon the advice of the consulting actuary shall also include an
administrative fee to be set by the Board.
Subject to the requirements of this
subsection, an employer may pay all or part of the cost of a service purchase
of a member in service. To the extent that the purchase is paid by the
employer, the cost amount paid by the employer shall be credited
to the pension accumulation fund. Pension Accumulation Fund. To
the extent that the purchase is paid by the member, the cost amount paid
by the member shall be credited to the member's annuity savings account.accumulated
contributions and interest in the Annuity Savings Fund.
The total amount of creditable service purchased under each subdivision of this section shall not exceed five years. No purchase of service credit under any subdivision of this section shall be made if a benefit is allowable under another public retirement system as a result of the service. If there is a conflict between a provision of G.S. 135‑56 and a provision of this subsection, then this subsection shall control.
The following purchases of creditable service are authorized under this subsection:
(1) If a member whose
creditable service has been cancelled in accordance with this subsection
subsequently returns to membership service and completes five years of
membership service upon that return, then the member may purchase an amount of
creditable service corresponding to the total of the membership service
associated with the withdrawn contributions, provided that the total amount of
creditable service purchased under this subsection may not exceed five years.
Notwithstanding any provision of this Chapter to the contrary, on and after
January 1, 2023, any member in service with five or more years of membership
service may purchase creditable service for service as a member of the General
Assembly not otherwise creditable under this section, provided the service is
not credited in the Legislative Retirement Fund nor the Legislative Retirement
System, by paying a total lump sum payment. The amount of creditable service
purchased under this subsection may not exceed a total of five years. The
member shall purchase this service by paying a lump sum amount to the Annuity
Savings Fund equal to the full liability increase due to the additional service
credits on the basis of the assumptions used for the purposes of the actuarial
valuation of the liabilities of the Retirement System, except for the following
assumptions specific to this calculation: (i) the allowance shall be assumed to
commence at the earliest age at which the member could retire on an unreduced
retirement allowance and (ii) assumed annual postretirement allowance increases
as set by the Board of Trustees upon the advice of the consulting actuary.
Subject to the requirements of this subsection, an employer may pay all or part
of the cost of a service purchase of a member in service. To the extent that
the purchase is paid by the employer, the cost paid by the employer shall be
credited to the pension accumulation fund. To the extent that the purchase is
paid by the member, the cost paid by the member shall be credited to the
member's annuity savings account.Withdrawn service. Service withdrawn
in accordance with the provisions of any of the following, limited to a total
maximum purchase of five years:
a. G.S. 120‑4.25.
b. G.S. 128‑27(f).
c. G.S. 135‑5(f).
d. G.S. 135‑62.
e. Any rules adopted under Article 12 of Chapter 143 of the General Statutes, as it existed prior to 1986.
(2) Any member may
purchase creditable service for service as a State teacher or employee, as
defined under G.S. 135‑1(10) and (25), and for service as an
employee of local government, as defined under G.S. 128‑21(10). A
member, upon the completion of 10 years of membership service, may also
purchase creditable service for periods of federal employment, provided that
the member is not receiving any retirement benefits resulting from this federal
employment, and provided that the member is not vested in the particular
federal retirement system to which the member may have belonged while a federal
employee. The member, after the transfer of any accumulated contributions from
the Teachers' and State Employees' Retirement System or Local Governmental
Employees' Retirement System, shall purchase this service by paying a lump sum
amount to the annuity savings fund equal to the full liability increase due to
the additional service credits on the basis of the assumptions used for the
purposes of the actuarial valuation of the liabilities of the Retirement
System, except for the following assumptions specific to this calculation: (i)
the allowance shall be assumed to commence at the earliest age at which the
member could retire on an unreduced retirement allowance and (ii) assumed
annual postretirement allowance increases as set by the Board of Trustees upon
the advice of the consulting actuary. Subject to the requirements of this
subsection, an employer may pay all or part of the cost of a service purchase
of a member in service. To the extent that the purchase is paid by the
employer, the cost paid by the employer shall be credited to the pension
accumulation fund. Notwithstanding the foregoing provisions of this section
that provide for the purchase of service credits, the terms "full
cost", "full liability", and "full actuarial cost" include
assumed annual post‑retirement allowance increases, as determined by the
Board of Trustees, from the earliest age at which a member could retire on an
unreduced service allowance.Federal, state, or local government service.
Service previously rendered to the federal government or to any state,
territory, or other governmental subdivision of the United States other than
this State. Service under this subdivision is limited to full‑time
service that would be allowable under the laws governing this Retirement
System.
(3) Part‑time service. Service previously rendered on a part‑time basis to an employer, as defined under either G.S. 135‑1 or G.S. 128‑21, for which the member would have met the definition of employee or teacher under either G.S. 135‑1 or G.S. 128‑21 except for the part‑time nature of the service. For the purposes of this subdivision, the following service is not eligible to be purchased:
a. Part‑time service rendered as a bus driver to a public school while a full‑time high school student.
b. Temporary or part‑time service rendered while a full‑time student in pursuit of a degree or diploma in a degree‑granting program, unless that service was rendered on a permanent part‑time basis and required at least 20 hours of service per week.
The amount of the single lump sum to be paid for the purchase of service credit under this subdivision shall be calculated by applying the ratio of actual gross compensation earned as a part‑time employee to the gross compensation that would have been earned as a full‑time employee to the period of service rendered in months.
In no case shall more than one year of service be creditable for all service in one year. Service rendered for the regular school year in any district shall be equivalent to one year of service.
(4) Temporary service. Service previously rendered on a temporary basis to an employer, as defined under either G.S. 135‑1 or G.S. 128‑21, and that meets both of the following conditions:
b. The member has acquired from the employer all certifications of temporary employment that are required by the Board of Trustees.
(5) Probationary local government service. Service previously rendered to any local employer, as defined under G.S. 128‑21, when performed in a probationary or employer‑imposed waiting period status that occurred between the date of employment and the date of membership service with the Local Governmental Employees' Retirement System.
(6) Involuntary furlough. Periods of interrupted service due to involuntary administrative furlough caused by the lack of funds to support the position.
(7) Leave due to extended illness. Periods of interrupted service while on leave without pay status due to the member's illness or injury, excluding leave due to parental leave or pregnancy or childbirth‑related leave, provided that any single period of interrupted service included a period of time during which the member failed to earn at least two months membership service.
(8) Parental leave and pregnancy or childbirth‑related leave. Periods of interrupted service due to parental leave, pregnancy, or childbirth.
(9) Charter school service. Periods of service previously rendered as an employee of a charter school operated by a private nonprofit corporation or a charter school operated by a municipality whose board of directors did not elect to participate in the Teachers' and State Employees' Retirement System under G.S. 135‑5.3.
(10) The University of North Carolina Optional Retirement Program service. Periods of employment with The University of North Carolina during which the member participated in the Optional Retirement Program, as provided for under G.S. 135‑5.1, provided that the member is not receiving, and is not entitled to receive, any retirement benefits resulting from this employment.
(11) Notwithstanding any
provision of this Chapter to the contrary, on and after January 1, 2023, any
member may purchase creditable service for service Employment not otherwise
creditable. Service not creditable in any other retirement system or plan
that was previously rendered as a judge, district attorney, or clerk of
superior court, when not otherwise provided for in this section, and or
as a judge of any lawfully constituted court of this State inferior to the
superior court, not to include service as a magistrate, justice of the peace,
or mayor's court judge. The member, after the transfer of any accumulated
contributions from the Teachers' and State Employees' Retirement System or
Local Governmental Employees' Retirement System, shall pay an amount equal to
the full cost of the additional service credits calculated on the basis of the
assumptions used for purposes of the actuarial valuation of the System's
liabilities, taking into account the additional retirement allowance arising on
account of the additional service credit commencing at the earliest age at
which the member could retire with an unreduced retirement allowance as
determined by the Board of Trustees upon the advice of the consulting actuary,
plus an administrative fee to be set by the Board of Trustees. Notwithstanding
the foregoing provisions of this subsection that provide for the purchase of
service credits, the terms "full cost", "full liability",
and "full actuarial cost" include assumed annual postretirement
allowance increases, as determined by the Board of Trustees, from the earliest
age at which a member could retire on an unreduced service allowance.
(b) Omitted Membership Service. A member who (i) had service qualifying for membership under G.S. 135‑55 as a judge, a clerk of superior court, a Director of Indigent Defense Services, a district attorney, or a public defender and (ii) was omitted from contributing membership through error shall be allowed the omitted membership service if the requirements of this subsection are met and the total payment required for that service under this subsection is made. Submission of clear and convincing evidence of the error is required prior to approval of, and payment for, the omitted membership service. Payment for service under this subsection shall be made in the following manner:
(1) Within 90 days of the omission, by the payment of employee and employer contributions that would have been paid.
(2) After 90 days and prior to three years of the omission, by the payment of the employee and employer contributions that would have been paid plus interest compounded annually at a rate equal to the greater of the average yield on the Pension Accumulation Fund for the preceding calendar year or the actuarial investment rate‑of‑return assumption, as adopted by the Board of Trustees.
(3) After three years of the omission, by paying a lump sum amount to the Annuity Savings Fund. The amount payable shall be equal to the full liability increase of the Retirement System due to the service credits purchased plus an administrative fee that is set by the Board of Trustees. The full liability increase shall be calculated on the basis of the same assumptions used for the purposes of the actuarial valuation of the liabilities of the Retirement System, except for the following assumptions specific to this calculation: (i) the allowance shall be assumed to commence at the earliest age at which the member could retire on an unreduced retirement allowance and (ii) there shall be assumed annual postretirement allowance increases set by the Board of Trustees upon the advice of the consulting actuary.
Nothing contained in this subsection shall prevent an employer or member from paying all or a part of the required payment for the omitted membership service. To the extent the amount is paid by the employer, the amount paid by the employer shall be credited to the Pension Accumulation Fund. To the extent the amount is paid by the member, the amount paid by the member shall be credited to the member's accumulated contributions and interest in the Annuity Savings Fund. An employer shall not discriminate against any employed member or group of employed members in paying all or any part of the payment required under this subsection for the omitted membership service.
(c) Purchase of Service
Credits Through Rollover Contributions From Certain Other Plans.
Notwithstanding any other provision of this Article, Article to the
contrary, subject to the requirements of this subsection and any rules adopted,
or policies established, by the Board of Trustees and without regard to any
limitations on contributions otherwise set forth in this Article, a member,
who is eligible to restore or purchase payments or repayments made for membership
or creditable service pursuant to the provisions of this Article, may,
subject to such rules and regulations established by the Board of Trustees,
purchase such service credits allowed under this section or any other
provision of this Article may be made by a member through rollover
contributions to the Annuity Savings Fund from (i) anany of the
following sources:
(1) An annuity contract described in Section
403(b) of the Internal Revenue Code, (ii) anCode.
(2) An eligible plan under Section 457(b) of the
Internal Revenue Code which that is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state, (iii) anstate.
(3) An individual retirement account or annuity
described in Section 408(a) or 408(b) of the Internal Revenue Code that is
eligible to be rolled over and would otherwise be includible in gross income,
or (iv) aincome.
(4) A qualified plan described in Section 401(a)
or 403(a) of the Internal Revenue Code. Notwithstanding the foregoing,
No rollover contribution shall
be made under this subsection, and the
Retirement System shall not accept any amount as a rollover contribution contribution,
unless such the amount required for the payment or
repayment is eligible to be rolled over to a qualified trust in accordance
with applicable law and the member provides evidence satisfactory to the
Retirement System that such the amount qualifies for rollover
treatment. Unless received by the Retirement System in the form of a direct
rollover, the rollover contribution must be paid to the Retirement System on or
before the 60th day after the date it was received by the member.
Purchase of Service Credits
Through Plan‑to‑Plan Transfers. Notwithstanding any other
provision of this Article, and without regard to any limitations on
contributions otherwise set forth in this Article, a member, who is eligible to
restore or purchase membership or creditable service pursuant to the provisions
of this Article, may, subject to such rules and regulations established by the
Board of Trustees, purchase such service credits through a direct transfer to
the Annuity Savings Fund of funds from (i) an annuity contract described in
Section 403(b) of the Internal Revenue Code or (ii) an eligible plan under
Section 457(b) of the Code which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state.
(d) Purchase of Service
Credits Through Plan‑to‑Plan Transfers. Notwithstanding any other
provision of this Article, Article to the contrary, subject to the
requirements of this subsection and any rules adopted, or policies established,
by the Board of Trustees and without regard to any limitations on
contributions otherwise set forth in this Article, a member, who is eligible
to restore or purchase payments or repayments made for membership or
creditable service pursuant to the provisions of this Article, may, subject
to such rules and regulations established by the Board of Trustees, purchase
such service credits allowed under this section or any other provision
of this Article may be made by a member through a direct transfer to the
Annuity Savings Fund of funds from (i) theany of the following
sources:
(1) An annuity contract described in Section 403(b) of the Internal Revenue Code.
(2) An eligible plan under Section 457(b) of the Internal Revenue Code that is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state.
(3) Supplemental Retirement Income Plans A, B, or C of
North Carolina or (ii) anyCarolina.
(4) Any other defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code which that
is maintained by the State of North Carolina, a political subdivision of a
the State or any other state, or any agency or instrumentality of a
the State or any other state or political subdivision of a the
State or any other state."
SECTION 14.(a) G.S. 135‑53(6) reads as rewritten:
"(6) "Creditable
service" shall mean for any member the total of his
prior service plus his membership service.service for
which credit is allowable under this Article. In no event shall creditable service
be deemed membership service for the purpose of determining eligibility for
benefits accruing under this Article."
SECTION 14.(b) G.S. 135‑56 is amended by adding a new subsection to read:
"(k) Creditable service may be purchased in accordance with G.S. 135‑56.5, or as otherwise provided for in this Article."
SECTION 14.(c) G.S. 135‑58(a6) reads as rewritten:
"(a6) Any member who
retires under the provisions of G.S. 135‑57(a) or G.S. 135‑57(c)
on or after July 1, 2008, after the member has either attained the member's
65th birthday or has completed 24 years or more of creditable service, shall
receive an annual retirement allowance, payable monthly, which monthly.
The payments shall commence on the effective date of the member's
retirement and shall be continued on the first day of each month thereafter
during the member's lifetime, the lifetime. The amount of which
the monthly retirement allowance payments shall be computed as the
sum of the applicable amounts in subdivisions (1), (2), (3), (4), and
(5) contained in the subdivisions of this subsection, provided that
in no event shall the annual allowance payable to any member be greater than an
amount which, when added to the allowance, if any, to which the member is
entitled under the Teachers' and State Employees' Retirement System, the
Legislative Retirement System, or the Local Governmental Employees' Retirement System
(prior System, prior in any case to any reduction for early
retirement or for an optional mode of payment), payment, would
total three‑fourths of the member's final compensation:compensation.
The following amounts shall be used for the purposes of calculations under this
subsection:
(1) Four and two hundredths
percent (4.02%) of the member's final compensation, multiplied by the number of
years of creditable service rendered as a justice of the Supreme Court, a judge
of the Court of Appeals, or the Director of the Administrative Office of the Courts;Courts.
(2) Three and fifty‑two
hundredths percent (3.52%) of the member's final compensation, multiplied by
the number of years of creditable service rendered as a judge of the superior court;court.
(3) Three and two hundredths
percent (3.02%) of the member's final compensation, multiplied by the number of
years of creditable service rendered as a judge of the district court, district
attorney, clerk of superior court, public defender, or the Director of Indigent
Defense Services;Services.
(4) A service retirement
allowance computed in accordance with the service retirement provisions of
Article 3 of Chapter 128 of the General Statutes using an average final
compensation as defined in G.S. 135‑53(2a) and creditable service
equal to the number of years of the member's creditable service that was
transferred or purchased from the Local Governmental Employees'
Retirement System to this System System, as provided in G.S.
135‑56; andfor under this Article.
(5) A service retirement
allowance computed in accordance with the service retirement provisions of
Article 1 of this Chapter using an average final compensation as defined in
G.S. 135‑53(2a) and creditable service, including any sick leave
standing to the credit of the member, equal to the number of years of the
member's creditable service that was transferred or purchased from the
Teachers' and State Employees' Retirement System or the Legislative Retirement
System to this System System, as provided in G.S. 135‑56.for
under this Article."
Part IV. RECODIFY AND STANDARDIZE SERVICE PURCHASE UNDER THE LEGISLATIVE RETIREMENT SYSTEM
SECTION 15.(a) Article 1A of Chapter 120 of the General Statutes is amended by adding a new G.S. 120‑4.12B to be entitled "Purchase of creditable service for service in Armed Forces."
SECTION 15.(b) Subsection (d) of G.S. 120‑4.12 is recodified as subsection (a) of G.S. 120‑4.12B, as created by subsection (a) of this section.
SECTION 15.(c) G.S. 120‑4.12(e) is repealed.
SECTION 16. G.S. 120‑4.12B, as created and amended by Section 15 of this act, reads as rewritten:
"§ 120‑4.12B. Purchase of creditable service for service in Armed Forces.
(a) Any On or
before December 31, 2024, any member of the Retirement System who has eight
or more years of creditable service as a member of the General Assembly may
purchase prior service credit for service in the Armed Forces of the United
States at the same rates and conditions as set forth in G.S. 120‑4.14
and G.S. 120‑4.16; provided that credit is allowed only for the
initial period of active duty in the Armed Forces of the United States up to
the time the member was first eligible to be separated or released therefrom,
and subsequent periods of such active duty as required by the Armed Forces of
the United States up to the date of first eligibility for separation or release
therefrom; and further provided that the member submits satisfactory
evidence of the service claimed and that service credit be allowed only for the
period of active service in the Armed Forces of the United States not
creditable in any other retirement system, except the National Guard or any
reserve component of the Armed Forces of the United States.therefrom.
(b) On or after January 1, 2025, any member or retired member with five or more years of membership service may purchase creditable service for service in the Armed Forces of the United States by paying a lump sum amount to the Annuity Savings Fund. The amount payable shall be equal to the full liability increase of the Retirement System due to the additional service credits purchased plus an administrative fee that is set by the Board of Trustees. The full liability increase shall be calculated on the basis of the same assumptions used for the purposes of the actuarial valuation of the liabilities of the Retirement System, except for the following assumptions specific to this calculation: (i) the allowance shall be assumed to commence at the earliest age at which the member could retire on an unreduced retirement allowance and (ii) there shall be assumed annual postretirement allowance increases set by the Board of Trustees upon the advice of the consulting actuary.
(c) Only periods of active service in the Armed Forces of the United States are eligible for the purchase of creditable service under this section, except that service in the National Guard or any reserve component of the Armed Forces of the United States shall be eligible. To make a purchase under this section, the member is required to submit satisfactory evidence of the claimed service in the Armed Forces of the United States. No purchase of service credit under this section shall be made if a benefit is allowable under another public retirement system as a result of the service in the Armed Forces of the United States."
SECTION 17.(a) G.S. 120‑4.8 reads as rewritten:
"§ 120‑4.8. Definitions.
The following words and phrases
as used definitions apply in this Article, unless the context
clearly requires otherwise, have the following meanings:otherwise:
(1) "Accumulated
contributions" means the Accumulated contributions. The sum
of all the amounts deducted from the compensation of a member and credited to
his individual account in the annuity savings fund, together with regular
interest as provided in G.S. 135‑7(b).
(2) "Actuarial
equivalent" means a Actuarial equivalent. A benefit of equal
value when computed upon the basis of the mortality tables as adopted by the
Board of Trustees, and regular interest.
(3) "Annuity"
means payment Annuity. Payment for life derived from the "Accumulated
contribution" accumulated contributions of a member. All "annuities"
annuities are payable in equal monthly installments.
(4) "Annuity
reserve" means the Annuity reserve. The present value of all
payments to be made on account of any annuity annuity, or benefit
in lieu of any annuity, computed upon the basis of the mortality tables as adopted
by the Board of Trustees, and regular interest.
(5) Board of Trustees. The Board of Trustees of the Teachers' and State Employees' Retirement System, which is responsible for administering the Legislative Retirement System.
(5)(6) "Compensation"
means salary Compensation. Salary and expense allowance paid for
service as a legislator in the North Carolina General Assembly, exclusive of
travel and per diem. Effective July 1, 2009, "compensation" compensation
also means includes payment of military differential wages.
(7) Creditable service. The total of a member's prior service plus membership service for which credit is allowable under this Article. In no event shall creditable service be deemed membership service for the purpose of determining eligibility for benefits accruing under this Article.
(6)(8) "Filing,"
when Filing. When used in reference to an application for
retirement, means the receipt of an acceptable application on a form
provided by the Retirement System.
(7)(9) "Highest
Highest annual salary" means the salary. The twelve
consecutive months of compensation authorized during a member's final
legislative term for the highest position that a member ever held as a member
of the General Assembly.
(8)(10) "Medical
Board" means the Medical Board. The board of physicians
provided for in G.S. 135‑6, which shall determine disability as
provided in this Article.
(9)(11) "Member
in service" means a Member in service. A member in service on
or after June 15, 1983.
(10)(12) "Pension
reserve" means the Pension reserve. The present value of all
payments to be made on account of any pension pension, or benefit
in lieu of any pension pension, computed upon the basis of the
mortality tables adopted by the Board of Trustees, and regular interest.
(11)(13) "Pensions"
means payments Pensions. Payment for life derived from money
provided by the State of North Carolina. All pensions are payable in equal
monthly installments.
(12)(14) "Present
member of the General Assembly" means a Present member of the General
Assembly. A person who is a member of the North Carolina General
Assembly on or after June 15, 1983.
(13)(15) "Regular
interest" means interest Regular interest. Interest compounded
annually at the rate determined by the Board of Trustees in accordance with
G.S. 135‑7(b) and G.S. 120‑4.10.
(14)(16) "Retirement"
means the Retirement. The withdrawal from active service with a
retirement allowance granted under the provisions of this Article. In order for
a member's retirement to become effective in any month, the member must render
no service at any time during that month.
(17) Retirement System. The Legislative Retirement System of North Carolina.
(15)(18) "Year"
as used in this Article shall mean the Year. The regular State fiscal
year beginning July 1, and ending June 30 in the following calendar year year,
unless otherwise defined by in rule of adopted by the
Board of Trustees."
SECTION 17.(b) G.S. 120‑4.12(c1) reads as rewritten:
"(c1) Any On or
before December 31, 2024, any member of the Retirement System who was a
member of the General Assembly as of January 1985 may purchase prior service
credit for the month of January 1985 based upon seven percent (7%) of the
compensation received for that period."
SECTION 17.(c) G.S. 120‑4.15 reads as rewritten:
"§ 120‑4.15. Repayment of contributions.
(b) On and after January 1, 2022, but before January 1, 2025, repayment of contributions withdrawn from the Legislative Retirement Fund and System shall be in an amount equal to the full liability increase due to the additional service credits on the basis of the assumptions used for the purposes of the actuarial valuation of the liabilities of the Retirement System, except for the following assumptions specific to this calculation: (i) the allowance shall be assumed to commence at the earliest age at which the member could retire on an unreduced retirement allowance and (ii) assumed annual postretirement allowance increases as set by the Board of Trustees of the Teachers' and State Employees' Retirement System upon the advice of the consulting actuary. The calculation of the amount payable shall also include an administrative fee to be set by the Board of Trustees of the Teachers' and State Employees' Retirement System.
Subject to the requirements of
this subsection, an employer may pay all or part of the cost of a service
purchase of a member in service. To the extent that the purchase is paid by the
employer, the cost paid by the employer shall be credited to the pension
accumulation fund. To the extent that the purchase is paid by the member, the
cost paid by the member shall be credited to the member's annuity savings
account.
SECTION 17.(d) G.S. 120‑4.16 reads as rewritten:
"§ 120‑4.16. Repayments and purchases.
(a) All repayments and purchases of service credit,
allowed under this Article, shall be made within two years after the member
first becomes eligible to make such repayments and purchases. All such
repayments and purchases not made within two years after the member becomes
eligible shall equal the full liability increase due to the additional service
credits on the basis of the assumptions used for the purposes of the actuarial
valuation of the liabilities of the Retirement System, except for the following
assumptions specific to this calculation: (i) the allowance shall be assumed to
commence at the earliest age at which the member could retire on an unreduced
retirement allowance and (ii) assumed annual postretirement allowance increases
as set by the Board of Trustees of the Teachers' and State Employees'
Retirement System upon the advice of the consulting actuary. The calculation of
the amount payable shall also include an administrative fee to be set by the
Board of Trustees of the Teachers' and State Employees' Retirement System.
(1) An annuity contract described in Section
403(b) of the Internal Revenue Code, (ii) anCode.
(2) An eligible plan under Section 457(b) of the
Internal Revenue Code which that is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state, (iii) anstate.
(3) An individual retirement account or annuity
described in Section 408(a) or 408(b) of the Internal Revenue Code that is
eligible to be rolled over and would otherwise be includible in gross income,
or (iv) aincome.
(4) A qualified plan described in Section 401(a)
or 403(a) of the Internal Revenue Code. Notwithstanding the foregoing,
No rollover contribution shall
be made under this section, and the
Retirement System shall not accept any amount as a rollover contribution contribution,
unless such the amount required for the payment or
repayment is eligible to be rolled over to a qualified trust in accordance
with applicable law and the member provides evidence satisfactory to the
Retirement System that such the amount qualifies for rollover
treatment. Unless received by the Retirement System in the form of a direct
rollover, the rollover contribution must be paid to the Retirement System on or
before the 60th day after the date it was received by the member.
(b1) Purchase of Service Credits Through Plan‑to‑Plan
Transfers. Notwithstanding any other provision of this Article, and without
regard to any limitations on contributions otherwise set forth in this Article,
a member, who is eligible to restore or purchase membership or creditable
service pursuant to the provisions of this Article, may purchase such service
credits through a direct transfer to the Annuity Savings Fund of funds from (i)
an annuity contract described in Section 403(b) of the Internal Revenue Code or
(ii) an eligible plan under Section 457(b) of the Code which is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state.
(1) An annuity contract described in Section 403(b) of the Internal Revenue Code.
(2) An eligible plan under Section 457(b) of the Internal Revenue Code that is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state.
(3) Supplemental Retirement Income Plans A, B, or C of
North Carolina or (ii) anyCarolina.
(4) Any other defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code which that
is maintained by the State of North Carolina, a political subdivision of a
the State or any other state, or any agency or instrumentality of a
the State or any other state or political subdivision of a the
State or any other state."
part v. cross‑reference conforming changes
SECTION 18.(a) G.S. 135‑5(a3)(1) reads as rewritten:
"(1) Determine an amount
equal to the member's accumulated contributions as required under G.S. 135‑8(b)(1)
for all years during which the member earned membership service, other than
service earned through armed service credit under G.S. 135‑4(f)
or G.S. 135‑4(f), G.S. 135‑4(g), or G.S. 135‑4.5,
used in the calculation of the retirement allowance that the member would
receive under this section."
SECTION 18.(b) G.S. 128‑27(a3)(1) reads as rewritten:
"(1) Determine an amount
equal to the member's accumulated contributions as required under G.S. 128‑30(b)(1)
for all years during which the member earned membership service, other than
service earned through armed service credit under G.S. 128-26(a1) or G.S. 128‑26(a1),
G.S. 128‑26(j1), or G.S. 128‑26.5, used in the
calculation of the retirement allowance that the member would receive under
this section."
SECTION 18.(c) G.S. 135‑53(1) reads as rewritten:
"(1) "Accumulated
contributions" with respect to any member shall mean the sum of all the
amounts deducted from the compensation of the member pursuant to G.S. 135‑68
since he the member last became a member and credited to his the
member's account in the annuity savings fund, plus any amount standing to his
the member's credit pursuant to G.S. 135‑67(c) as a
result of a prior period of membership, plus any amounts credited to his account
pursuant to G.S. 135‑28.1(b) or 135-56(b), purchased in
accordance with this Article, together with regular interest on all such
amounts computed as provided in G.S. 135‑7(b)."
SECTION 18.(d) The Revisor of Statutes shall replace the reference to "G.S. 135‑56(b)" with "G.S. 135‑56.5(a)" in G.S. 135‑62(a).
SECTION 18.(f) The Revisor of Statutes shall replace the reference to "G.S. 120‑4.8(1)" with "G.S. 120‑4.8" in G.S. 120‑4.19.
part vi. effective date
SECTION 19. This act is effective when it becomes law.
In the General Assembly read three times and ratified this the 13th day of June, 2024.
s/ Ralph Hise
Presiding Officer of the Senate
s/ Tim Moore
Speaker of the House of Representatives
s/ Roy Cooper
Governor
Approved 11:29 a.m. this 20th day of June, 2024