Recodifies GS 135-1(7b) as GS 135-1(7c), and GS 128-21(7b) as GS 128-21(7c).

Amends GS 135-6, pertaining to the administration of the Retirement System for Teachers and State Employees, and GS 128-28, pertaining to the administration of the Retirement System for Counties, Cities and Towns, to expand access by the Retirement Systems Divisions to persons and records needed in the Divisions' course of conducting fraud investigations to also include the same access when conducting compliance investigations. Enacts GS 135-1(7b) and GS 128-21(7b) to define compliance investigation to mean an independent review or examination by Retirement Systems Division staff or authorized representatives who are assisting the Division staff of records, activities, actions, or decisions by employers or other affiliated or associated entities having an impact on a Retirement System or benefits administered by the Board of Trustees. Establishes that the purpose of a compliance investigation is to help detect errors and ensure compliance and full accountability in the use of pension funds. Further amends GS 135-6 and GS 128-28 to require the Directors of the Retirement Systems to maintain a complete file of all compliance investigative reports for 10 years in addition to fraud investigative reports. Makes conforming changes to include compliance investigative reports in related provisions concerning investigative reports. Makes further conforming and technical changes to GS 135-6 and GS 128-28.

Under current law, GS 135-4(jj) and GS 128-26(y) pertaining to the contribution-based benefit cap under the Retirement Systems, the Retirement Systems can allow an employer of a member who became a member before January 1, 2015, or who has not earned at least five years of membership service in the retirement system after January 1, 2015, to pay the lump-sum amount required in these subsections on an installment plan to the annuity savings fund in order to restore the member's retirement allowance to the pre-cap amount. Current law requires that payment of the lump-sum on an installment plan must begin no less than 90 days after the retirement of the member and end no less than one year after the retirement of the member. This act instead provides that payment of the lump-sum amount on an installment plan can be under two options: (1) an installment plan ending no more than 15 months after the retirement of the member or (2) an installment plan ending no more than 27 months after the retirement of the member with interest assessed on the principal amount of the contribution-based benefit cap liability owed and applied to any installment payment plan term exceeding 12 months at a rate corresponding with the interest rate-based assumption based on the most recent actuarial valuation approved by the Board of Trustees. Makes conforming changes.

Amends GS 128-38.3 to provide that, for local employers who made arrangements with the Retirement System prior to January 1, 2017, any beneficiary who is a retiree from an employer in the Retirement System under Article 3 of GS Chapter 128 may authorize the periodic deduction from the beneficiary's retirement benefits as a designated lump sum to be paid to the beneficiary's former employer for the purpose of providing health benefits. Sets forth that the authorization will remain in effect until revoked by the beneficiary. Requires proof of the authorization to be available upon request by the Department of the State Treasurer. Prohibits the Department of the State Treasurer from making any arrangements to deduct from a beneficiary's retirement benefits an amount to be paid to the beneficiary's former employer for the purpose of providing health benefits. 

Amends GS 115C-436 to direct the school financial officer to transmit a copy of the report generated under GS 135-8(f)(2)f from the Teachers' and State Employees' Retirement System to the local board of education upon receipt of the report. This report contains a list of employees for whom the local board of education made a contribution to the Retirement System likely to require an additional employer contribution should the employee elect to retire in the following 12 months. Directs the school financial officer to also notify the board of county commissioners of the county in which the local administrative unit is located that the report was received and the number of employees listed in the report.

Enacts GS 135-8(j) and GS 128-30(j) to require the employer's chief financial officer to transmit a copy of the reports generated by the Retirement Systems under GS 135-8(f)(2)f concerning additional employee contributions required if the employee retires in 12 months to the chief executive of the employer and/or governing body of the employer, if applicable.

Effective July 1, 2017, and expiring July 1, 2022, amends GS 143-166.84 to set out a definition of eligible service as sheriff for the purposes of the Sheriff's Supplemental Pension Fund.

Amends GS 105-259(b) to allow the disclosure of tax information for the purpose of furnishing the Department of State Treasurer with information it requests related to an investigation or audit under GS 135-6(q) or GS 128-28(r).

Prohibits the Executive Administrator and the Board of Trustees of the State Health Plan from approving resolutions electing to cover retirees under the Plan for local government entities authorized under SL 2004-124, SL 2006-7, SL 2005-276, and SL 2006-249 to participate in the Plan but that did not opt to cover the retiree before January 1, 2017.

Amends GS 135-8(d) and GS 128-30(d), pertaining to contributions to and payments from the pension accumulation fund, to provide that, for fiscal years beginning subsequent to January 1, 2017, the sum of the "normal contribution" and the "accrued liability contribution" cannot be less than the employee contribution required under GS 135-8(b)(1) or GS 128-30(b), respectively. 

Includes a severability clause.