RETIREMENT ADMIN. CHANGES ACT OF 2017.-AB

View NCGA Bill Details2017-2018 Session
House Bill 183 (Public) Filed Wednesday, February 22, 2017
AN ACT TO MAKE CLARIFYING AND ADMINISTRATIVE CHANGES TO THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM AND THE LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM LAWS AND RELATED STATUTES.
Intro. by Collins, Ross, McNeill.

Status: Ch. SL 2017-129 (House Action) (Jul 20 2017)

Bill History:

H 183/S.L. 2017-129

Bill Summaries:

  • Summary date: Jul 25 2017 - More information

    AN ACT TO MAKE CLARIFYING AND ADMINISTRATIVE CHANGES TO THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM AND THE LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM LAWS AND RELATED STATUTES. Enacted July 20, 2017. Effective July 20, 2017, except as otherwise provided.


  • Summary date: Jun 22 2017 - More information

    Senate committee substitute makes the following changes to the 2nd edition.

    Modifies proposed amendments to GS 58-86-90 (Exemptions of pensions from attachment; rights nonassignable). Includes erroneous payments to members in the listed retirement and disability plans, as well as State Health Plan premiums or claims paid on behalf of any member who is later determined to have been ineligible for those benefits, or unentitled to those amounts, in the amounts that may be offset against any retirement allowance, return of contributions, or any other right accruing under the Article to the same person, the person's estate, or designated beneficiary.

    Modifies proposed amendment to GS 135-4(e). Replaces the currently proposed rate of creditable sick leave being reported to the Retirement System with one that divides the member's total hours of sick leave at retirement by the hours per month such leave was awarded under the employer's duly adopted sick leave policy, as the policy applied when the leave was accrued.

    Modifies proposed amendment to GS 128-26(e) to make changes identical to those in GS 135-4(e).

    Deletes Section 8, which amended GS 150B-1, GS 135-6(n), and GS 128-28(o).


  • Summary date: Mar 15 2017 - More information

    House committee substitute makes the following changes to the 1st edition.

    Amends GS 135-8(b)(1) to make a clarifying change. 

    Amends GS 128-30(b)(1) to make clarifying changes.

    Adds a section amending GS 147-69.2A, to provide that following a public procurement process, the specified designees must jointly and unanimously select a third-party professional investment management firm, subject to the rules and regulations of (was, registered with) the US Securities and Exchange Commission for fund administration. 

    Adds a section amending GS 147-86.73(g1) to refer to the ABLE Account application package instead of application form.

     


  • Summary date: Feb 22 2017 - More information

    Section 1

    Amends GS 58-86-90 to provide that any overpayment of benefits to a member in a State-administered retirement system, the Disability Salary Continuation Plan, or the Disability Income Plan of North Carolina, including any benefits paid to, or State Health Plan premiums paid on the behalf of, any member who is later determined to have been ineligible for those benefits can be offset against any retirement allowance, return of contributions, or any other right accruing under Article 86 of GS Chapter 58 (North Carolina Firefighters' and Rescue Squad Workers' Pension Fund) to the same person, the person's estate, or designated beneficiary. 

    Current law, GS 135-5(n), pertaining to the Retirement System for Teachers and State Employees, and GS 128-27(i), pertaining to the Retirement System for Counties, Cities, and Towns, prohibits a State, City, or either Retirement System from bringing any action against any member or former member or beneficiary respecting any overpayment of benefits or contributions more than three years after the overpayment was made. This act adds that those provisions do not affect the right of either Retirement System from recouping overpaid benefits as provided in GS 135-9 and GS 128-31, respectively.

    Section 2

    Amends GS 135-8(a) and GS 128-30(a) to provide that all the assets of both Retirement Systems must be credited according to the purpose for which they are held to one of two funds; namely, the annuity savings fund and the pension accumulation fund (was, to one of four funds, including the annuity reserve fund and the pension reserve fund). Makes technical changes to GS 135-8(b)(1) and GS 128-30(b)(1) by removing outdated language, and establishes that, with respect to the period of service commencing on July 1, 1975, each employer must uniformly deduct 6% of the compensation received by any member from the salary of each member on every payroll of the employer for every payroll period. 

    Makes conforming changes by repealing GS 135-8(b)(4) (providing for members of the Retirement System for Teachers and State Employees redepositing into the annuity savings funds an amount equal to amount previously withdrawn), GS 135-8(c) (providing for the annuity reserve fund pertaining to the Retirement System for Teachers and State Employees), and GS 128-30(c) (providing for the annuity reserve fund pertaining to the Retirement System for Counties, Cities and Towns). 

    Amends GS 135-8(d), concerning contributions to and payment from the pension accumulation fund under the Retirement System for Teachers and State Employees, to provide for contributions by employers based on the actuarially determined employer contribution rate (previously based on valuations as specified by statute). Provides that the actuarially determined employer contribution rate is to be calculated annually by the actuary using assumptions and a cost method approved by the Actuarial Standards Board of the American Academy of Actuaries and selected by the Board of Trustees. Mandates that the total amount payable each year to the pension accumulation fund cannot be less than the sum of the actuarially determined employer contribution rate of the total earned compensation of all members during the preceding year as adjusted higher under a contribution rate policy adopted by the Board of Trustees, known as the required employer contribution rate. Prohibits the Board of Trustees from adopting a contribution policy that results in a rate less than the normal contribution rate. Requires that all pension and benefits in lieu thereof payable from contributions of employer must be paid from the pension accumulation fund (previously, excepted those payable on account of members who received no prior service allowance). Makes conforming and technical changes. Makes language gender neutral. Makes conforming changes to GS 135-8(f)(2)e. 

    Amends GS 128-30(d), concerning contributions to and payments from the pension accumulation fund under the Retirement System for Counties, Cities and Towns, to provide for contributions based on the actuarially determined employer contribution rate (previously based on valuations as specified by statute). Provides that the actuarially determined employer contribution rate is to be calculated annually by the actuary using assumptions and a cost method approved by the Actuarial Standards Board of the American Academy of Actuaries and selected by the Board of Trustees. Replaces the term "accrued liability contribution" with the term "past service liability contribution." Sets the past service contribution rate for an employer to be the per centum of the total annual compensation of all members employed by the employer which is estimated to extinguish the liability in 24 years. Mandates that the total amount payable each year to the pension accumulation fund cannot be less than the sum of the actuarially determined employer contribution rate and the past service liability contribution rate of the total earned compensation of all members during the preceding year as adjusted by the Board of Trustees and known as the required employer contribution rate. Requires the actuary to set an additional rate for the required employer contribution for law enforcement officers rate that may be adjusted under a contribution rate policy adopted by the Board of Trustees and added to the employer's past service liability rate. Prohibits the Board of Trustees from adopting a contribution rate policy that results in a rate less than the normal contribution rate. Make conforming and technical changes. Makes language gender neutral. 

    Makes conforming changes by repealing GS 135-8(e) (providing for the pension reserve fund pertaining to the Retirement System for Teachers and State Employees), GS 128-30(e) (providing for the pension reserve fund pertaining to the Retirement System for Counties, Cities and Towns), and GS 135-8(f)(2)b (providing for the collection of employers' contributions until the first valuation has been made and computed as specified in subsection (d)).

    Amends GS 135-7(f) to establish that it is the intent of the General Assembly that the Retiree Health Benefit Fund (Fund) be a trust that provides an irrevocable source of funding to be used, to the extent the Fund's assets are sufficient, only for health benefits to retired and disabled employees and their applicable beneficiaries. Defines eligible Plan members to mean eligible retired and disabled employees, and their applicable beneficiaries, who are members of the State Health Plan for Teachers and State Employees as provided by GS Chapter 135. Clarifies that the Fund is a trust fund to be used only to provide health benefits to eligible Plan members after payment of any accrued reasonable investment and administrative expenses. Provides that employer and non-employer contributions to the Fund and earnings on those contributions are irrevocable (previously, did not include non-employer contributions). Exempts the assets of the Fund from the claims of any creditors of the contributing employers or non-employers, the Fund's trustees and administrators, or claims of creditors of eligible Plan members. Allows for Fund assets to be used to administer benefits provided by the Fund, at the approval of the Board of Trustees. Specifically includes offsets to the State budget to the Retirement Systems Division for staff administration of benefits. Makes conforming, clarifying, and technical changes. 

    Amends GS 135-110 to establish that it is the intent of the General Assembly that the Disability Income Plan of North Carolina Trust Fund (Fund) be a trust that provides an irrevocable source of funding to be used, to the extent the Fund's assets are sufficient, only for disability benefits to participants and beneficiaries. Removes the language allowing for other charges beyond benefits and expenses against the Plan to be drawn and disbursed from the Fund. Provides that employer and non-employer contributions to the Fund and earnings on those contributions are irrevocable. Exempts the assets of the Fund from the claims of any creditors of the contributing employers or non-employers, the Fund's trustees and administrators, or claims of creditors of participants and beneficiaries. Authorizes the assets of the Fund to be used for reasonable expenses to administer benefits provided by the Fund as approved by the Board of Trustees.

    Amends GS 135-7 to set out that it is the intent of the General Assembly that a master trust fund be created that provides an irrevocable source of funding to be used, to the extent the fund's assets are sufficient, only for the death benefits and disability benefits to the Plans' members, participants, and beneficiaries, pursuant to GS 120-4.27, GS 128-27(l), GS 128-27(12) through (16), GS 135-5(l), GS 135-64(k), and GS 143-166.60. Creates the North Carolina Teachers' and State Employees' Benefit Trust (Trust) as a master trust to which all recipients, transfers, appropriations, contributions, investments earnings, and all other income belonging to the Plans must be deposited, and all benefits and expenses against the Plan must be disbursed. Defines Plans to mean the retiree group death benefit trust established under GS 120-4.27, the Group Life Insurance Plan established under GS 128-27(l), the retiree group death benefit trust fund established under GS 128-27, the Group Life Insurance Plan established under GS 135-5(l), the retiree group death benefit trust fund established under GS 135-5(l), the retiree group death benefit trust fund established under GS 135-64(k), and the Separate Insurance Benefits Plan established under GS 143-166.60. Establishes the Board of Trustees of both the Teachers' and State Employees' Retirement System and the Local Governmental Employees' Retirement System as the trustee of the Trust. Requires the funds within the Trust to be accounted for separately and not commingled. Clarifies that the assets of one plan cannot be used to pay for liabilities of another plan within the Trust. Provides that employer and non-employer contributions to the Trust and earnings on those contributions are irrevocable. Exempts the assets of the Trust from the claims of any creditors of the contributing employers or non-employers, the Fund's trustees and administrators, or claims of creditors of members, participants, and beneficiaries. Makes conforming and clarifying changes to GS 120-4.27, GS 128-27(l), GS 128-27(16), GS 135-5(l), GS 135-64(k), and GS 143-166.60(b). Additionally, makes those statutes gender neutral.

    Effective June 30, 2017.

    Section 3

    Amends GS 135-5(f), GS 135-5(l) as amended by this act, GS 135-63, GS 128-27(f), GS 128-27(l), and GS 120-4.25 to remove the qualification that the member of each respective Plan must nominate a beneficiary prior to completing 10 years of service to receive the member's accumulated contributions upon the member's death prior to the member retiring. Makes language gender neutral. Effective January 1, 2018.

    Section 4

    Amends GS 135-1(11), which defines the term employer as the term is used in the provisions for the Retirement System for Teachers and State Employees, to include that for purposes of reporting under the pronouncements by the Governmental Accounting Standards Board, the Retirement System is a multi-employer plan. Effective June 30, 2017.

    Section 5

    Amends GS 135-7 and GS 128-29 to establish the Legislative Enactment Implementation Arrangement (LEIA) for the Retirement System for Teachers and State Employees and for the Retirement System for Counties, Cities and Towns, effective October 1, 2017, under the management of each Board of Trustees of the Retirement Systems. Establishes that the purpose of each LEIA is to provide for timely administrative implementation of legislative provisions regarding the retirement of, or payment of retirement benefits to, public officers and employees. Sets out parameters for each LEIA's administration and funding. Prohibits the Board of Trustees from directing any employer contributions to the LEIA after November 1, 2021. Authorizes the Board of Trustees to allocate LEIA funds to the implementation of legislative provisions regarding the retirement of, or payment for the retirement benefits to, public officers or public employees, subject to the specified restrictions. Directs that any assets of the LEIA not used to pay allowed administrative expenses for timely administrative implementation of legislative provisions be transferred to the respective Retirement System as an additional employer contribution. Directs the Department of State Treasurer to report to the respective Board of Trustees, the Joint Legislative Commission on Government Operations, and the Fiscal Research Division on or before August 1 of each year on specified information. Directs each Board of Trustees to post their respective report on its public website. Effective October 1, 2017.

    Section 6

    Enacts GS 147-68.2 to classify information contained in records held by the State about outstanding unpaid warrants issued by the State as confidential and not available for public inspection to the extent that the Treasurer determines that information would be sufficient to counterfeit a warrant.

    Section 7

    Amends GS 147-9.4 to allow the chief executive officer of an employer, on behalf of the employer, to contribute to a deferred compensation account of a teacher or employee additional funds, not in excess of limitations under federal law, so long as the funds are not constructively received by the teacher or employer in the year in which the funds were earned for State and federal income tax purposes. Makes clarifying changes. Makes language gender neutral.

    Section 8

    Amends GS 150B-1 to exempt from the rule-making provisions of the APA the Retirement System Board of Trustees established under GS 128-28 and GS 135-6 when adopting acturarial tables, assumptions, and contribution-based benefit cap factors after presentation of recommendations from the actuary. Sets out specific assumptions and rates this exemption applies to but is not limited to.

    Amends GS 135-6(n) and GS 128-28(o) to direct the Board of Trustees of each Retirement System to adopt necessary contribution-based benefit cap factors for its respective Retirement System.

    Section 9

    Amends GS 143B-426.40G (Issuance of warrants upon State Treasurer; delivery of warrants and disbursement for non-State entities) to provide that the State Treasurer can impose a fee on an agency with non-State funds (previously, did not clarify an agency with non-State funds) for each check drawn against the agency's disbursing account that causes the balance in the account to overdraft or while the account is in overdraft. Further provides that the financial officer must pay the fee from the agency's non-State funds (previously, from non-State or personal funds) to the General Fund to the credit of the miscellaneous nontax revenue account by the agency. Effective October 1, 2017.

    Section 10

    Amends GS 135-4(e) and GS 128-26(e) to require that creditable sick leave must be reported to the respective Retirement System as days granted as if the policy awarded sick leave with a day being equal to eight hours within a 40-hour workweek. Makes language gender neutral. Effective January 1, 2018.

    Section 11

    Includes severability clause. 


Printer-friendly: Click to view