Bill Summaries: S719 RETIREMENT TECH./PROTECT./& OTHER CHANGES. (NEW)

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  • Summary date: Jun 29 2020 - More information

    AN ACT TO MAKE TECHNICAL CHANGES TO THE STATUTES GOVERNING THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM, THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, THE LEGISLATIVE RETIREMENT SYSTEM, THE SUPPLEMENTAL RETIREMENT INCOME PLAN, THE ACHIEVING A BETTER LIFE EXPERIENCE (ABLE) PROGRAM TRUST, THE NORTH CAROLINA NATIONAL GUARD PENSION FUND, THE NORTH CAROLINA PUBLIC SCHOOL TEACHERS' AND PROFESSIONAL EDUCATORS' INVESTMENT PLAN, AND THE NORTH CAROLINA STATE HEALTH PLAN FOR TEACHERS AND STATE EMPLOYEES; TO REQUIRE STRESS TESTING FOR THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, AS RECOMMENDED BY THE PEW FOUNDATION; TO MAKE AMENDMENTS RELATED TO THE PENSION SOLVENCY FUND; TO MAKE CHANGES TO THE UNCLAIMED PROPERTY STATUTES; TO MAKE CERTAIN CHANGES TO PRESERVE THE INTEGRITY OF AND CLARIFY THE POLICY OBJECTIVES OF THE GENERAL ASSEMBLY FOR THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM, THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, AND THE LEGISLATIVE RETIREMENT SYSTEM; AND TO AMEND THE SEPARATE INSURANCE BENEFITS PLAN OFFERINGS. SL 2020-48. Enacted June 26, 2020. Effective June 26, 2020, except as otherwise provided.


  • Summary date: Jun 3 2020 - More information

    House committee substitute makes the following changes to the 1st edition. Changes the act't titles.

    Makes organizational changes and adds the following content.

    Part I-A

    Section 1.1

    Amends GS 128-21 and GS 135-1, which define terms applicable to provisions governing the Retirement System for Counties, Cities, and Towns [Local Government Employees' Retirement System (LGERS)] and the Teachers' and State Employees' Retirement System (TSERS), to add the defined term duly acknowledged. Defines the term to mean notarized, including electronic notarization, or verified through an identity authentication service approved by the Department of State Treasurer.

    Section 1.2

    Amends the following statutes pertaining to the Retirement System specified to provide for payment of a member's contributions to the System in one lump sum, if the member is not eligible for a retirement benefit, when the member attains 72 years of age (currently, 70 and one-half years of age) or has ceased to be an employee of the respective System: GS 135-5(m4) (concerning TSERS); GS 128-27(m3) (concerning LGERS); GS 135-74(c1) (concerning the Judicial Retirement System); and GS 120-4.31(c1) (concerning the Legislative Retirement System). Consolidates repetitive language in each statute concerning members actively contributing to other Retirement Systems. Makes corrections to statutory cross-references and references to other Systems. Makes clarifying and technical changes to each, and makes language gender neutral. 

    Effective January 1, 2021, and applies to members on or after that date. Provides that the statute that is in effect on the day the member attains 70 and one-half years of age is applicable to a member that attains age 70 and one-half on or before December 31, 2019.

    Section 1.3

    Amends GS 135-90, concerning the purpose of the Supplemental Retirement Income Act, to remove disability from the specified conditions triggering supplemental retirement income payments as allowed under the Internal Revenue Code.

    Amends GS 135-92 to include individuals required under the Internal Revenue Code to be eligible for participation in the Supplemental Retirement Income Plan (Plan) in the Plan's stated membership eligibility, if the individuals voluntarily elect enrollment. Makes technical and clarifying changes.

    Amends GS 135-94 to remove the responsibility of the Department of State Treasurer and the Plan's Board of Trustees to provide members with alternative payment options for benefit distribution from the Plan upon disability.

    Section 1.4

    Amends GS 147-86.70, which sets forth defined terms applicable to Article 6F, Achieving a Better Life Experience (ABLE) Program Trust. Amends the definition given for ABLE account to add a sibling to those specified individuals that may act on behalf of the account owner. Makes conforming changes to GS 147-86.71 to add a sibling as an alternative to the specified parties who must sign the ABLE account application if the contributor is not the account owner, and clarifies that a sibling appointed as signatory of the account, like other specified account administrators, has no beneficial interest in the account. Adds sibling as a defined term and defines the term to mean a brother, sister, stepbrother, or stepsister (previously, this is the definition given for the term member of the family, which has now been eliminated). Makes conforming changes to replace member of the family with sibling throughout the Article. Applies to actions taken on behalf of an ABLE account owner on or after the date the act becomes law.

    Part I-B

    Amends GS 135-48.8, which sets out statements of public interest on health insurance by removing references to group insurance and benefits. Makes conforming changes to GS 135-48.40.

    Amends GS 135-48.40 by adding that nothing is to be construed to either permit a person to enroll, or require the State Health Plan for Teachers and State Employees (Plan) to enroll, a person in the plan when doing so would jeopardize the Plan's preferential tax exempt status as a governmental plan. 

    Amends GS 135-66 by adding that the assets of the Consolidated Judicial Retirement System include employers' contributions held with the Pension Accumulation Fund and employees' contributions held in the Annuity Savings Fund. Requires that the Board of Trustees have performed an annual actuarial valuation of the System and gives it the responsibility for maintaining the System on a generally accepted actuarial basis. Requires that an actuarially determined employer contribution be calculated annually by the actuary using the specified method. Allows the Board of Trustees to adopt a contribution policy that would recommend a contribution not less than the actuarially determined employer contribution. Prohibits the recommended employer contribution rate from being less than the actuarially determined employer contribution.

    Removes provisions governing the North Carolina National Guard Pension Fund from GS 127A-40(f) into new GS 127A-41 and adds the following. Specifies that the Fund is to include General Fund appropriations made to the State Treasurer and held with the Pension Accumulation Fund of the Teachers' and State Employees' Retirement System. Requires an actuarially determined employer contribution to be calculated annually by the actuary using the specified method. Allows the Board of Trustees to adopt a contribution policy that would recommend a contribution not less than the actuarially determined employer contribution. Prohibits the recommended employer contribution rate from being less than the actuarially determined employer contribution.

    Amends GS 135-8 (concerning the Retirement System for Teachers and State Employees) and GS 128-30 (concerning the Retirement System for Counties, Cities and Towns) by adding that if an employer made contributions on account of a retiree subject to the contribution-based benefit cap under GS 135-8(f)(2)f and that retiree later forfeits retirement benefits under the specified statutes concerning the forfeiture of retirement benefits for committing certain felonies, then the Retirement Systems Division may provide a credit to the employer. 

    Enacts new GS 135-5.5 (applicable to the Retirement System for Teachers and State Employees) and GS 128-23.1 (applicable to the Retirement System for Counties, Cities and Towns) to consider an employer as an inactive employer if the four specified criteria are met, including that the employer has no employees that qualify for membership in the System. Requires annual reporting on all employers determined to be inactive employers. 

    Amends GS 159-33.1 by amending the items to be included in the semiannual report of financial information to require that it include the total revenues received from building inspections, by sources (was, by type) and the total expenditures paid from all revenues received, by object (was, by type). Effective June 30, 2020.

    Amends GS 135-18.1 by removing outdated provisions. Provides that prior to retirement, any person who was a member of the North Carolina Governmental Employees' Retirement System (local system) and who becomes a member of the Retirement System for Teachers and State Employees is entitled to transfer to the system his or her credits for membership and prior service in the local system.

    Repeals the following statutes: GS 135-5.2 (concerning retirement of Chapel Hill utilities and telephone employees), GS 135-13 (which specified certain laws were not repealed and concerning suspension of payments and compulsory retirement), GS 135-14 (concerning pensions of certain former teachers and State employees), GS 135-14.1 (concerning retirement benefits for certain school superintendents and assistant superintendents), GS 135-16 (employees transferred to the North Carolina State Employment Service by act of Congress), GS 135-18.3 (conditions under which amendments to the system are void), and GS 135-18.5 (provision for emergency expenses of integration of System).

    Amends GS 135-16.1 by removing provisions concerning the enrollment of blind or visually impaired DHHS employees in the Teachers' and State Employees' Retirement System. Deletes outdated provisions. 

    Amends GS 128-23 to refer to the levy of property taxes as authorized by GS Chapter 153A, Article 7, instead of under GS 153-65.

    Amends GS 115D-25.4 by adding that the administrative costs of the North Carolina Public School Teachers' and Professional Educators' Investment Plan may be charged to members or deducted from members' accounts. 

    Amends GS 135-6.1 (applicable to the Retirement System for Teachers and State Employees) and GS 128-33.1 (applicable to the Retirement System for Counties, Cities and Towns) by adding that the Retirement Systems Division of the Department of State Treasurer may disclose to employers and former employers that made a contribution for an employee or former employee to the Retirement System any information that is not public under this statute regarding that employee necessary to conduct the business of the Retirement System. 

    Amends GS 135-8(f)(2)f and GS 128-30(g)(2)b to specify that the reports received under the statute are not public records. Also provides that pension-spiking reports are not public records. 

    Amends GS 135-48.47 to make a local government's election to participate in the State Health Plan irrevocable. 

    Amends GS 147-69.7(b)(1)f to correct a statutory cross reference. 

    Amends GS 1-359(d) to make technical changes to a statutory cross reference.

    Part II-A

    Amends GS 135-6 to require at least once in each five-year period that the actuary completes an actuarial experience review of (was, make an actuarial investigation into) the mortality, service, and compensation experience of the members and beneficiaries of the Retirement System for Teachers and State Employees. Adds that before undertaking each quinquennial actuarial experience review, the Board of Trustees must report to the NCGA and the Governor on 13 items concerning the Retirement System, including projections of assets, liabilities, pension debt, service costs, employee contributions, employer contributions and future contribution estimates, net amortization, benefit payments, payroll, and funded ratio for the Retirement System for each of the next 30 years based upon the then-current actuarial assumptions, including the assumed rate of return; the market value of the assets controlled by the Board of Trustees and an explanation of how the actuarial value assigned to those assets differs from the market value of those assets; and an assessment of how the changes of assumptions adopted by the Board of Trustees in the experience review affect any of the other results in the report. Allows the Retirement System Division to increase receipts from the retirement assets of the corresponding retirement system or allows the payment of costs directly from the retirement assets for payment for the administration of the required actuarial experience review, required report, and annual valuation of the assets and liabilities of the System funds.

    Part II-B

    Amends GS 143C-4-10 to expand upon the funds received by the Unfunded Liability Solvency Reserve to also include any funds, in an amount directed by the State Treasurer to be transferred, that meet the following: (1) the funds are the result of rebates received by the Department of State Treasurer from a company administering supplemental voluntary insurance benefits authorized under specified provisions; (2) the funds are not owed to a company administering, or individuals participating in, supplemental voluntary insurance benefits; and (3) as determined by the Board of Trustees of the Retirement System, the funds are not to be needed to pay future administrative costs of the supplemental voluntary insurance benefits.

    Amends GS 135-48.5 which requires that any unencumbered balance in excess of prepaid premiums or charges in the Public Employee Health Benefit Fund at the end of each fiscal year be used in three specified ways in the specified order. Adds, as the second use, that an amount determined by the State Treasurer, subject to approval by the Board of Trustees, not to exceed 25% of any unencumbered balance remaining after providing for incurred but unpresented claims may be transferred to the Retiree Health Benefit Fund.  Amends the final allowed use, which is to improve the plan, to make it as provided by the State Treasurer, subject to approval by the Board of Trustees, instead of as provided by the General Assembly. Makes additional clarifying changes.

    Amends GS 143C-4-10 by prohibiting transferring any portion of the Retiree Health Benefit Fund to the General Fund and providing that any appropriation made to the Fund does not revert.

    Effective July 1, 2020.

    Part III

    Renames Article 1 of GS Chapter 116B as General. Recodifies GS 116B-1 as GS 116B-2.1 and places it under new Article 1A, Escheats, of GS Chapter 116B. Recodifies GS 116B-2 as GS 116B-2.2 and amends it to make conforming changes. Amends GS 116-3 and GS 29-12 to also makes conforming changes reflecting the new statute numbers.

    Enacts new GS 116B-1.1, stating the state's policy to recover and transfer property to rightful owners in a way that is consistent with the interest of rightful owners. When the rightful owner cannot be determined, states that it is the policy that all benefits realized from any unclaimed or abandoned property accrue to the benefit of higher education. 

    Amends GS 116B-64 to require that when property is delivered or paid to the Treasurer under GS Chapter 116B (Escheats and Abandoned Property), the Treasurer must hold it without liability for loss, as well as income or gain.

    Amends GS 116B-75 by expanding upon the things that the Treasurer can call upon a person required to report, pay, or deliver property under the Chapter (or related specified individuals) to do, to also include producing reports (in addition to records), make the required payments, and make the required delivery of property.

    Amends GS 116B-60 to require all abandoned property holders to filed reports electronically (was, only those holders reporting 50 or more property owners' records were required to file the report electronically). Applies to reports filed on or after July 1, 2021.

    Amends GS 116B-60 to make exceptions to the requirement that amounts due to an owner may be reported in an aggregate amount without furnishing any of the specified information; those exceptions are for property subject to GS 116B-53(c)(4)(security or other equity interest in a business association, including a security entitlement unclaimed three years after the earlier of specified events), (c)(5) (debt of a business association, including debt evidenced by a matured or called bearer bond or an original issue discount bond, unclaimed three years after the date of an interest or principal payment unclaimed by the apparent owner), and (c)(5a) (any dividend, profit, distribution, interest, redemption, payment on principal, cash compensation held or owing by a business association for or to its shareholder, certificate holder, policyholder, member, bondholder, or other security holder, who has not claimed it, or corresponded in writing with the business association concerning it, within three years after the date prescribed for payment or delivery).

    Amends GS 116B-63 by adding that a holder who has in good faith paid or delivered property to the Treasurer in error may request a refund, and allows the Treasurer to issue a refund after the holder has filed a form on proof of the error. Makes additional technical and clarifying changes.

    Part IV

    Contains the content of the previous edition.

    Part V

    Repeals GS 143-166.60(d)(1) which requires the Boards of Trustees of the Teachers' and State Employees' Retirement System and the Local Governmental Employees' Retirement System to promulgate rules to establish accident and sickness disability benefits under the Separate Insurance Benefit Plan for State and Local Governmental Law Enforcement Officers. 

    Part VI

    Includes a severability clause.

    Part VII

    Includes the standard effective date provision.


  • Summary date: May 13 2020 - More information

    Section 1.1

    Amends GS 135-6(l) (concerning the Retirement System for Teachers and State Employees, TSERS) and GS 128-28(m) (concerning the Retirement System for Counties, Cities, and Towns, LGERS) with identical changes, requiring that the contribution-based benefit cap factor be included in the actuary of the retirement systems' periodic reports to the Board of Trustees. Clarifies that the actuary is to include experience studies, all other actuarial calculations, and all assumptions used by the actuary in the annual valuations of System assets provided to the Board of Trustees. Provides that the materials provided by the actuary to the Board of Trustees will become effective the first day of the month following adoption unless a different date is specified in the adopting resolution. Prohibits the effective date from retroactively affecting a contribution rate. Makes other clarifying changes.

    Amends GS 150B-1(d), adding subsection (30), exempting from the Rules of GS Chapter 150B, Article 2A, the Retirement System Board of Trustees established under GS 128-28 and GS 135-6 when adopting actuarial tables, assumptions, and contribution-based benefit cap factors after presentation of recommendations from the actuary. This exemption includes, but is not limited to, 11 specified actuarial tables, assumptions, methods, and factors. Applies to actuarial tables, assumptions, and contribution-based benefit cap factors adopted or changed on or after the date the act becomes law.

    Section 1.2

    Amends GS 135-6(n) and (o), and GS 128-28(o) and (p), with identical changes, requiring the Board of Trustees to adopt any necessary contribution-based benefit cap factors for the Retirement System, at least once in every five-year period, taking into account actuarial investigation results. Authorizes the Retirement Systems Division to increase receipts from retirement assets or pay the costs directly from the retirement assets in order to pay for the statutes' administration. Makes other clarifying changes.

    The above changes are effective when they become law and apply to actuarial investigations and calculations mode on or after that date.

    Section 2.1

    Repeals the following statutory subsections, which concern forfeiture of benefits under the specified retirement system for felony convictions found to be directly related to the member's office or employment: GS 135-18.10A(b) (concerning TSERS); GS 128-38.4A(b) (concerning LGERS); GS 135-75.1A(b) (concerning the Consolidated Judicial Retirement System, JRS); and GS 120-4.33A(b) (concerning the Legislative Retirement System (LRS).

    Section 3.1

    Amends the following statutory subsections to specify that the forfeiture of creditable service provided in each existing law applies, regardless of whether creditable service was earned by virtue of membership in the System, accrued by conversion of sick leave at the point of the member's retirement, accrued by transfer of service from another retirement system, purchased by the member, or accrued by any other means: GS 135-4(gg) (concerning elected government officials vested in TSERS on July 1, 2007); GS 135-4(ii) (concerning members vested in TSERS on December 1, 2012); GS 128-26(w) (concerning elected government officials vested in LGERS on July 1, 2007); GS 128-26(x) (concerning members vested in LGERS on December 1, 2012); GS 135-56(g) (concerning members vested in JRS on July 1, 2007); GS 135-56(j) (concerning members vested in JRS on December 1, 2012); GS 120-4.12(f) (concerning members vested in LRS on July 1, 2007); and GS 120-4.12(g) (concerning members vested in LRS on December 1, 2012). Clarifies that creditable service attributable to the conversion of sick leave accrues in the respective System on the date of retirement, service transferred to the respective System from another system accrues in the System on the effective date of the transfer, and purchased services accrues in the respective System on the date of the purchase.

    Section 3.2

    Amends the following statutes, which prohibits members whose retirement benefits have been forfeited under State law from subsequently purchasing or repurchasing either those benefits or any creditable service associated with those benefits, to further add that service cannot be used for purposes of eligibility for benefits in any retirement system that provides reciprocal benefits: GS 135-18.10B (concerning TSERS); GS 128-38.4B (concerning LGERS); GS 135-75.1 (concerning JRS); and GS 120-4.33B (concerning LRS).


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