RETIREMENT ADMINISTRATIVE CHANGES ACT OF 2013.

View NCGA Bill Details2013-2014 Session
House Bill 359 (Public) Filed Tuesday, March 19, 2013
A BILL TO BE ENTITLED AN ACT TO MAKE CHANGES TO ADMINISTRATION OF THE STATE RETIREMENT SYSTEMS THAT WILL EXTEND THE TRANSFER BENEFIT OPTION TO PARTICIPANTS IN THE 403(B) SUPPLEMENTAL RETIREMENT PLAN, CLARIFY THE TIMING OF THE SOCIAL SECURITY OFFSET FOR LONG‑TERM DISABILITY BENEFITS, ESTABLISH A 415(M) BENEFITS PRESERVATION ARRANGEMENT AS ALLOWED UNDER FEDERAL LAW, AND PROVIDE THAT DOMESTIC RELATIONS ORDERS DIVIDING INTERESTS UNDER THE RETIREMENT SYSTEM MUST BE SUBMITTED ON APPROVED FORMS, AND TO CORRECT AN OVERSIGHT IN THE DISABILITY INCOME PLAN, AND TO AMEND THE PROVISIONS FOR ALLOWANCE OF RETROACTIVE MEMBERSHIP SERVICE IN THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM AND THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM.
Intro. by Moffitt.

Status: Ch. SL 2013-405 (House Action) (Aug 23 2013)

SOG comments (2):

Long title Change.

House Committee substitute changes the long title.  The original long title was as follows:

A BILL TO BE ENTITLED AN ACT TO MAKE CHANGES TO ADMINISTRATION OF THE STATE RETIREMENT SYSTEMS THAT WILL EXTEND THE TRANSFER BENEFIT OPTION TO PARTICIPANTS IN THE 403(B) SUPPLEMENTAL RETIREMENT PLAN, CLARIFY THE TIMING OF THE SOCIAL SECURITY OFFSET FOR LONG-TERM DISABILITY BENEFITS, AND ESTABLISH A 415(M) BENEFITS PRESERVATION ARRANGEMENT AS ALLOWED UNDER FEDERAL LAW.

Long title change

Senate committee substitute to the second edition changed the long title. Previous long title was A BILL TO BE ENTITLED AN ACT TO MAKE CHANGES TO ADMINISTRATION OF THE STATE RETIREMENT SYSTEMS THAT WILL EXTEND THE TRANSFER BENEFIT OPTION TO PARTICIPANTS IN THE 403(B) SUPPLEMENTAL RETIREMENT PLAN, CLARIFY THE TIMING OF THE SOCIAL SECURITY OFFSET FOR LONG-TERM DISABILITY BENEFITS, ESTABLISH A 415(M) BENEFITS PRESERVATION ARRANGEMENT AS ALLOWED UNDER FEDERAL LAW, AND PROVIDE THAT DOMESTIC RELATIONS ORDERS DIVIDING INTERESTS UNDER THE RETIREMENT SYSTEM MUST BE SUBMITTED ON APPROVED FORMS.

Bill History:

H 359/S.L. 2013-405

Bill Summaries:

  • Summary date: Sep 3 2013 - More information

    AN ACT TO MAKE CHANGES TO ADMINISTRATION OF THE STATE RETIREMENT SYSTEMS THAT WILL EXTEND THE TRANSFER BENEFIT OPTION TO PARTICIPANTS IN THE 403(B) SUPPLEMENTAL RETIREMENT PLAN, CLARIFY THE TIMING OF THE SOCIAL SECURITY OFFSET FOR LONG‑TERM DISABILITY BENEFITS, ESTABLISH A 415(M) BENEFITS PRESERVATION ARRANGEMENT AS ALLOWED UNDER FEDERAL LAW, AND PROVIDE THAT DOMESTIC RELATIONS ORDERS DIVIDING INTERESTS UNDER THE RETIREMENT SYSTEM MUST BE SUBMITTED ON APPROVED FORMS, AND TO CORRECT AN OVERSIGHT IN THE DISABILITY INCOME PLAN, AND TO AMEND THE PROVISIONS FOR ALLOWANCE OF RETROACTIVE MEMBERSHIP SERVICE IN THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM AND THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM. Enacted August 23, 2013. Section 3 is effective January 1, 2014. Section 5 is effective January 1, 2012, and applies to persons retiring on or after that date. Section 4 is effective September 1, 2013. The remainder is effective July 1, 2013.


  • Summary date: Jul 17 2013 - More information

    Senate amendment to the 3rd edition makes the following changes. Makes Section 4 of the act (changes to statutes concerning exemption from garnishment, attachment, and execution) effective September 1, 2013 (was, July 1, 2013).


  • Summary date: Jun 26 2013 - More information

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

    Amends GS 135-5(m2) to allow a member of the Teachers' and State Employees' Retirement System (TSERS) who became a member of the Supplemental Retirement Income Plan (SRIP) before retiring and who remains a memberto make a one-time election to transfer eligible balances, not including any Roth after-tax contributions and earnings, from specified plans to SRIP, subject to applicable SRIP requirements, and then through SRIP to TSERS. Provides a list of the specified plans.

    Provides that an individual who transfers an eligible retirement plan under subsection (m2) to TSERS is taxed for state income tax purposes on the special retirement allowanceas if that special retirement allowance was paid directly by the eligible plan or the plan through which the transfer was made, whichever is most favorable to the member.

    Prohibits an eligible plan from assessing a fee specifically related to a transfer of accumulated contributions, but does not prohibit other fees assessable under the plan. Requires each plan, contract, account, or annuity to fully disclose to any member participating in a transferany surrender chargesor other fees contemporaneously with the initiation of the transfer by the member.

    Makes organizational changes to this section.

    Amends new GS 135-151(c) to provide that the supplemental benefit paid under the Qualified Excess Benefit Arrangement (QEBA) is taxable under NC law in the same manner as the benefit paid under TSERS. Amends new GS 128-38.10 (providing for QEBA under the Local Governmental Employees' Retirement System [LGERS]) to make identical provision regarding the taxability of the supplemental benefit paid under QEBA. Effective January 1, 2014.

    Amends GS 135-3(8)d to provide that a beneficiary who retired on an early or service retirement allowance and then returns to service as a teacher or employee and earns at least three years membership servicemust have creditable service earned while receiving disability benefits under GS Chapter 135, Article 6, counted as membership service for purposes of computing the member's retirement allowance. Effective January 1, 2012, and applies to persons retiring on or after that date.

    Amends GS 135-4(ff) pertaining to retroactive membership in TSERS. Provides that a member reinstated to service retroactively to the date of prior involuntary termination, with back pay, may be allowed membership service after submitting clear and convincing proof of the reinstatement, payment of the back pay, and restoration of associated benefits. Provides criteria for when the reinstatement is by courtorder and criteria when reinstatement is by settlement agreement. Makes identical amendments to GS 128-26(v) pertaining to retroactive membership service in LGERS.

    Adds a severability clause to this act. Amends the title of the act to reflect changes to the content.

    Except as otherwise indicated, this act becomes effective July 1, 2013 (was January 1, 2014).


  • Summary date: May 9 2013 - More information

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

    Changes long title.

    Amends GS 135-106(b), making clarifying changes to provisions dealing with long-term disability, providing that the amounts payable are to be reduced by Social Security disability benefits to which the beneficiary may be entitled, effective as of the first of the month following the month of initial entitlement.

    Amends title of GS Chapter 135, Article 7, changing it to Qualified Excess Benefit Arrangement.

    Amends GS 135-150, Definitions, deleting a reference to GS 128-28 in the definition of Board of Trustees. Amends the definition of Retirement Systems to only refer to the Teachers' and State Employees' Retirement System; deletes references to the NC Local Government Employees' Retirement System, the Consolidated Judicial Retirement System, and the Legislative Retirement System.

    Amends GS 135-151, Qualified Excess Benefit Arrangement, making clarifying and conforming changes. Enacts new GS 135-151(j), establishing a sunset provision for participation in QEBA, which provides that no member of the Teachers' and State Employees' Retirement System retiring on or after January 1, 2015, will be eligible to participate in the QEBA.

    Enacts new GS 128-38.10, Qualified Excess Benefit Arrangement, which amends the Retirement System for counties, cities, and towns to address QEBA. Establishes QEBA, effective January 1, 2014, and places it under the management of the Board of Trustees, with the sole purpose of providing part of the retirement allowance or benefit that would otherwise be payable by the NC Local Government Employees' Retirement System, except for the limitations under section 415(b) of the Internal Revenue Code (IRC).  Sets out other provisions and regulations for the QEBA that apply to the NC Local Government Employees' Retirement System, which are identical to the provisions for the QEBA for the Teachers' and State Employees' Retirement System, including the above added sunset provision.

    Amends GS 135-9, Exemption from garnishment, attachment, etc., and GS 128-31, Exemptions from execution, providing that an Application for System approval of a domestic relations order dividing a person's interest under the Retirement System must be accompanied by an order consistent with the system-design template order provided on the System's website.

     


  • Summary date: Mar 20 2013 - More information

    Amends GS 135-5(m2), allowing members of the North Carolina Public School Teachers' and Professional Educators' Investment Plan at any time coincident with or following retirement to make a one‑time election to transfer any portion of the member's eligible accumulated contributions, not including any Roth after‑tax contributions or earnings to the Teachers' and State Employees' Retirement System and receive a special retirement allowance, based on the member's transferred balance (previously, the Teachers' and Professional Educators' Investment Plan was not included under these provisions). Makes conforming, clarifying, and technical changes.

    Amends GS 135-106(b), making conforming and technical changes.

    Amends GS 135, by creating a new Article, Article 7 (Qualified Excess Benefit Arrangement for Certain Plans Administered by the Department of State Treasurer).

    Creates GS 135-150, (Definitions), adding the definitions for terms as they are to be applied to this section. Includes Board of Trustees, Internal Revenue Code, payee, Qualified Excess Benefit Arrangement, and retirement systems.

    Creates GS 135-151 (Qualified Excess Benefit Arrangement) (QEBA). QEBA is established and is effective January 1, 2014, placed under the management of the Board of Trustees, to provide the part of a retirement allowance or benefit that would  otherwise have been payable by a Retirement System except for limitations under section 415(b) of the Internal Revenue Code (IRC). QEBA is intended to constitute a qualified excess benefit arrangement under section 415(m) of the IRC.

    Eligibility to participate in the QEBA. Payees will participate in the QEBA effective as of January 1 , 2014, for any calendar year during which he or she receives retirement allowance or benefit  from one or more retirement systems that is reduced due to the application of the maximum benefit provision of section 415(b) of the IRC.

    Supplemental benefit payable under the QEBA. Effective January 1, 2014, a payee will receive a monthly supplemental benefit equal to the difference between the amount of that payee's monthly retirement paid under the applicable system on or after January 1, 2014, and the amount that would have been payable if not for the reduction due to the application of section 415(b) of the IRC. The supplemental benefit will be computed and payable under the same terms, at the the same time, and to the same person as the related benefit payable under the applicable retirement system. Supplemental payments cannot be deferred.

    Funding of the QEBA. The QEBA will be unfunded within the meaning of the federal tax law. No payee contributions or deferrals can be made or allowed.  The Board of Trustees, upon recommendation of the actuary engaged by the Board, will determine the employer contributions required to pay benefits due under the QEBA for each fiscal year. Required contributions will be paid by each employer with respect to which payee's benefit under QEBA is attributable. The required contributions will be deposited in a separate fund. The benefit liability of the QEBA will be determined each fiscal year and assets will not be accumulated to pay benefits in future fiscal years.

    Treatment of unused assets. Assets of the QEBA plan not used to pay benefits in the current fiscal year will be used for payment of the administrative expenses of the QEBA for the current or future fiscal years or will be paid to the appropriate Retirement System as an additional employer contribution.

    Assets subject to claims of creditor. A payee or payee's beneficiary or heirs have no right and no property interest in any assets held to support the liabilities under this Article. If any right to acquire and receive benefits under the QEBA exists, the right will be no greater than the right of any unsecured general creditor of the state of North Carolina or such other applicable employers.

    Administration. The QEBA will be administered by the Board of Trustees. They will compile and maintain all records necessary for administration. They will have full discretionary authority to interpret, construe, and implement the QEBA and to adopt any rules or regulations necessary to implement the provisions of this section.

    No assignment. Except as provided in other provisions or statutes, or court-ordered equitable distribution, supplemental benefits under this article will be exempt from levy and sale, garnishment, attachment, or any other process and will be unassignable, unless provided otherwise.

    Reservation of power to change.  The General Assembly reserves the right to modify or amend the provisions of the QEBA. No member of the Retirement System covered by this Article and no beneficiary of such a member will be deemed to have acquired any vested right to any supplemental payment under this Article.

    Effective January 1, 2014


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