Bill Summaries: H168 RETIREMENT ADMINISTRATIVE CHANGES ACT OF 2021.-AB

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  • Summary date: Jul 2 2021 - More information

    AN ACT MAKING ADMINISTRATIVE CHANGES RELATED TO CONTRIBUTION-BASED BENEFIT CAP LIABILITIES UNDER THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM (LGERS) AND THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM (TSERS); CLARIFYING WITHDRAWAL LIABILITIES UNDER LGERS AND TSERS; CLARIFYING AND STANDARDIZING THE DEFINITION OF "ACTUARIAL EQUIVALENT" UNDER LGERS AND TSERS; REQUIRING EMPLOYING UNITS TO ADOPT WRITTEN POLICIES FOR SPECIAL SEPARATION BUYOUTS FOR LAW ENFORCEMENT OFFICERS; GIVING THE DEPARTMENT OF STATE TREASURER AND THE SUPPLEMENTAL RETIREMENT BOARD OF TRUSTEES LIMITED AUTHORITY TO ADOPT ADMINISTRATIVE FEES UNDER CERTAIN PLANS; CLAWING BACK DISABILITY INCOME PLAN OVERPAYMENTS UNDER THE OPTIONAL RETIREMENT PROGRAM; AND ADDRESSING SPECIAL RETIREMENT ALLOWANCE PAYMENTS UPON THE DEATH OF THE DESIGNATED BENEFICIARY. SL 2021-75. Enacted July 2, 2021. Effective July 1, 2021.


  • Summary date: Jun 10 2021 - More information

    Senate committee substitute amends the 3rd edition as follows. 

    Deletes the content of Section 1.2 of the act, which enacted GS 128-30(d)(4a) and GS 135-8(f)(5), requiring adjusting the required employer contribution rate under the Local Governmental Employees' Retirement System (LGERS) and the Teachers' and State Employees' Retirement System (TSERS) to include an additional amount equal to a rate per centum that is estimated to extinguish the contribution-benefit base cap liability on an amortization schedule selected by the respective Board of Trustees that has been applied to unfunded liabilities in the most recent actuarial valuation, with specified limitations.

    Modifies the proposed changes to GS 135-91, which authorize the Department of State Treasurer and the Board of Trustees of the Supplemental Retirement Plan, the NC Deferred Compensation Plan, and the NC Public School Teachers' and Professional Educators' Investment Plan to adopt a new or amended rule at a public meeting to impose or change administrative fees under the respective Plan. Decreases the cap set on administrative fees based on Plan, now ranging from 0.025% to 0.05% (was, 0.05% to 0.25%), with the cap changed to 0.025% of the assets of the Supplemental Retirement Income Plan, and 0.025% of the assets of the Deferred Compensation Plan (both of which were previously capped at 0.25%).


  • Summary date: Mar 23 2021 - More information

    House committee substitute amends the 2nd edition as follows. 

    Makes the following identical changes to the proposed changes to GS 128-27(m2)(1), concerning the Local Governmental Employees' Retirement System, and GS 135-5(m2)(1), concerning the Teachers' and State Employees' Retirement System, regarding payment of a member's special retirement allowance guaranteed by the respective Board of Trustees for a number of months to the member's designated beneficiary. Now provides that if the member's designated beneficiary (must be designated under Option 2, 3, or 6 set forth in subsection (g) of each statute, as required by existing law) begins receiving monthly payments and dies before the specified number of monthly payments have been made in combination to the member and the beneficiary, a one-time payment will be paid to the member's legal representatives, rather than estate, as previously specified.


  • Summary date: Mar 17 2021 - More information

    House committee substitute amends the 1st edition as follows. 

    Adds the following provisions. 

    Makes the following identical changes to GS 128-27(m2)(1), concerning the Local Governmental Employees' Retirement System and GS 135-5(m2)(1), concerning the Teachers' and State Employees' Retirement System. Expands upon the provisions applicable to the payment of a member's special retirement allowance guaranteed by the respective Board of Trustees for a number of months to the member's designated beneficiary. Now provides that if the member's designated beneficiary (must be designated under Option 2, 3, or 6 set forth in subsection (g) of each statute, as required by existing law) begins receiving monthly payments and dies before the specified number of monthly payments have been made in combination to the member and the beneficiary, a one-time payment will be paid to the member's estate equal to the initial monthly special retirement allowance, multiplied by the specified number of months, less the total of the monthly payments made to the member and the beneficiary (current law more generally directs for remaining payments to be made to the member's estate if the designated beneficiary dies before receiving payments for the specified number of months). Additionally provides that if the member dies before the expiration of the specified number of months and the member has not selected Option 2, 3, or 6 set forth in subsection (g) of each statute, the member's designated beneficiary will receive a one-time payment equal to the initial monthly special retirement allowance, multiplied by the specified number of months, less the total of the monthly payments made to the member (current law directs payment to the designated beneficiary for the remainder of the specified number of months). 

    Includes a severability clause.

    Make conforming organizational changes and makes conforming changes to the act's long title.


  • Summary date: Feb 25 2021 - More information

    Part I

    Amends GS 159-30.1 to permit a local government, public authority, eligible entity, or local school administrative unit to establish and fund an irrevocable trust to pay contribution-based benefit cap liabilities to the Local Government Employees' Retirement System (LGERS), in addition to the existing authorization to pay post-employment benefits for which the entity is liable.

    Enacts GS 128-30(d)(4a) and GS 135-8(f)(5) to require adjusting the required employer contribution rate under LGERS and the Teachers' and State Employees' Retirement System (TSERS) to include an additional amount equal to a rate per centum that is estimated to extinguish the contribution-benefit base cap liability on an amortization schedule selected by the respective Board of Trustees that has been applied to unfunded liabilities in the most recent actuarial valuation; limited to the beginning of the fiscal year following 90 days after the assessment of a contribution-based benefit cap liability is not paid as a lump-sum payment. Applies to assessments imposed on or after July 1, 2021, to reduce an employer's contribution-based benefit cap liability. 

    Amends GS 128-30(g)(3) and GS 135-8(f)(3), concerning the withholding of State appropriations due to an employer for delinquent contributions to the Retirement Systems Division, to specify that payment is due for contribution-based benefit cap liability under LGERS and TSERS the later of 12 months after the member's effective date of retirement, or the first day of the month coincident with or next following six months after the date of the invoice (previously, 12 months after the member's effective date of retirement). Applies to contribution-based benefit cap liability payments due from an employer on or after July 1, 2021.

    Part II

    Further amends GS 128-30 and GS 135-8, concerning procedures for withdrawing from LGERS and TSERS, to require employing units which by sale, dissolution, or otherwise changing to a business or legal form not eligible for participation as an employer in the applicable Retirement System under federal law to follow the specified procedures for ceasing participation. Applies to a participation withdrawal by an employing unit on or after July 1, 2021.

    Part III

    Amends GS 128-21(2) and GS 135-1(2) to define actuarial equivalent, as the term is used in both LGERS and TSERS provisions, to mean a benefit of equal value when computed upon the basis of actuarial assumptions as adopted by the respective Board of Trustees (previously specified calculation based on mortality tables; TSERS definition also included regular interest). Applies to benefit calculations performed on or after July 1, 2021. 

    Part IV

    Amends GS 143-166.43 to require State departments, agencies, or institutions, and local government employers to have written, adopted policies that prohibit employees from choosing between accepting the lump sum separation buyout for law enforcement officers as a cash payment or transferring the lump sum separation buyout to TSERS or LGERS. Applies to lump sum separation buyouts offered to law enforcement officers on or after July 1, 2021.

    Part V

    Amends GS 135-91 to authorize the Department of State Treasurer and the Board of Trustees of the Supplemental Retirement Plan, the NC Deferred Compensation Plan, and the NC Public School Teachers' and Professional Educators' Investment Plan to adopt a new or amended rule at a public meeting to impose or change administrative fees under the respective Plan. Details notice and comment requirements of the draft rule, and posting requirements of adopted rules. Places caps on administrative fees based on Plan, ranging from 0.05% to 0.25%. Applies to administrative fees established or changed pursuant to rules adopted by the above provisions prospectively to any amounts owed on or after July 1, 2021.

    Part VI

    Amends GS 135-107 to require a participant of the Optional Retirement Program who owes an overpayment to the Disability Income Plan at the time the beneficiary would first qualify for an unreduced retirement benefit had the member elected to be a TSERS member, to pay the total overpayment amount due to the Disability Income Plan, with failure to pay within six months after the earliest age of retirement on an unreduced income allowance resulting in bar from enrollment in a new year of coverage under the NC State Health Plan for Teachers and State Employees until payment is made in full or the participant makes approved payment arrangements. Applies to overpayments owed on or after July 1, 2021. 


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