Section 1 enacts new GS 143­166.43 (Separation buyouts for law enforcement officers) to authorize any State department, agency, or institution, or any local government employer to, at its discretion, offer a lump sum separation buyout to a law enforcement officer who leaves employment prior to reaching the officer's eligibility for a separation allowance, to be paid from funds available, and not to exceed the total that would otherwise be paid in separation allowance payments under GS 143­166.41 or GS 143­166.42.

Section 2 amends GS 135­5(m2) (concerning the Teacher's and State Employees' Retirement System) and GS 128­27(m2) (concerning the local Government Employees' Retirement System) to authorize transfers under those subsections to be paid in whole or in part with employer contributions paid directly to that retirement system at the time of transfer.

Section 3 amends GS 135­5(a)(4) and GS 128­27(a)(5) to allow law enforcement officers' retirement with full benefits after 25 years of creditable service, and makes a technical change. Amends GS 135­5(b19) and GS 128­27(b21) to limit the existing service retirement allowance to members retiring before January 1, 2018. Enacts new GS 135­5(b21) to provide a service retirement allowance to members retiring on or after January 1, 2018. New GS 135­5(b21) is substantially identical to GS 135­ 5(b19) with the following exceptions. The allowance provided in GS 135­5(b21)(1)b is identical to that in GS 135­5(b19)(1)b except that it is available to members that retire prior to their 50th birthday and after the completion of 25 years of creditable service, but before the completion of 30 years of creditable service, instead of members who retire on or after their 50th birthday and after the completion of 15 years of creditable service, but before the completion of 30 years of creditable service, and is calculated with member's creditable service at retirement plus four percent times the difference between age 50 and the member's age at retirement, instead of the member's credible service at retirement. Provides a new service retirement in GS 135­5(b21)(1)c to members who retire on or after their 50th birthday and before their 55th birthday with 15 or more years of creditable service and less than 30 years of creditable service, and specifies the calculation of that benefit. New GS 128­27(b22) is substantially identical to GS 128­27(b21), with exceptions identical to those described above occurring in GS 128­27(b22)(1)b and GS 128­ 27(b22)(1)c. Amends GS 135­5(m) and GS 128­27(m) to refer to new GS 135­5(b21)(1)c and GS 128­27(b22)(1)c instead of existing GS 135­5(b19)(1)b and GS 128­27(b21)(1)b, and to make technical changes.

Section 4 authorizes the Department of State Treasurer, Retirement Systems Division, in order to administer these changes, to increase receipts from the retirement assets of the corresponding retirement system or pay costs associated with the administration of these changes directly from the retirement assets.

Sections 2 and 3 are effective January 1, 2018. The remainder of the act is effective when it becomes law.