Bill Summary for H 1134 (2015-2016)

Summary date: 

May 31 2016

Bill Information:

View NCGA Bill Details2015-2016 Session
House Bill 1134 (Public) Filed Wednesday, May 18, 2016
AN ACT TO MAKE ADMINISTRATIVE CHANGES TO THE RETIREMENT SYSTEM AND TO MAKE OTHER CHANGES AFFECTING THE STATE TREASURER.
Intro. by McNeill, Ross, Hurley.

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Bill summary

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

Section 3

Amends the definition of normal retirement age in GS 135-1(14a), as it applies to the Retirement System for Teachers and State Employees, to mean, for persons who became members on or after January 1, 2017: (a) for members who are not law enforcement officers or eligible former law enforcement officers, (1) 50 years of age or older (previously, 55 years of age or older) with 30 years of creditable service, (2) 60 years of age or older with 25 years of creditable service, or (3) 65 years of age or older with five years of membership service and (b) for members who are law enforcement officers or eligible former law enforcement officers, 50 years of age or older with 30 years of creditable service or 55 years of age or older with five years of membership service and five years of creditable service as a law enforcement officer that may or may not be concurrent to the five years of membership service (previously, did not require 55 years of age or older to have five years of creditable service as a law enforcement officer that may or may not be concurrent to the five years of membership service).

Amends GS 135-5(a), subdivision (4b), to provide that any member who is a law enforcement officer and who attains age 50 and completes 30 or more years of creditable service in that capacity or who attains age 55 and completes five or more years of membership service in that capacity (previously, was a law enforcement officer who has attained normal retirement age) may retire as specified. Establishes that a law enforcement officer may retire upon electronic submission or written application to the Board of Trustees of the Retirement System for Teachers and State Employees, provided that the member at the time specified for the member's retirement in the electronic submission or written application will have attained normal retirement age. Makes technical changes.

Amends GS 135-5(b21)(1)a by providing that, if the member is a law enforcement officer or an eligible former law enforcement officer, and the member's service retirement date occurs on or after the member's 55th birthday and completion of five years membership service as a law enforcement officer, or after the completion of 30 years creditable service (previously, if the member has attained normal retirement age), the service retirement allowance is 1.82% of the member's average final compensation multiplied by years of creditable service. Amends GS 135-5(b21)(1)b to provide that, if the member's service retirement date occurs on or after the member's 50th birthday, and before the member's 55th birthday, with 15 or more years of creditable service as a law enforcement officer and prior to the normal retirement age (previously, and prior to completion of 30 years of creditable service), the member's retirement allowance is equal to the greater of the amount of subsubsubdivisions 1 and 2. Changes the computation of subsubsubdivision 2 to now provide the service retirement allowance as computed under GS 135-5(21)(1)a, reduced by the sum of 5/12 of 1% thereof for each month by which the member's retirement date precedes the first day of the month coincident with or next following the month the member would have attained normal retirement age had the member continued working (previously, provided the allowance as computed under GS 135-5(21)(1)a reduced by 5% multiplied by the difference between 30 years and the member's creditable service at retirement).

Amends GS 135-5(b21)(2), providing that a member who is not a law enforcement officer or an eligible former law enforcement officer will receive a service retirement allowance computed as specified in subsubdivisions (a) through (c), by making the following changes. Amends subsubdivision (a) to provide that, if a member's service retirement date occurs on or after the member's 65th birthday upon completion of five years of membership service, or on or after the member's 60th birthday upon completion of 25 years of creditable service, or on or after the member's 50th birthday upon completion of 30 years of creditable service (previously, if the member has attained normal retirement age), the allowance is 1.82% of the member's average final compensation multiplied by years of creditable service. Amends subsubdivision (c) to provide that, if the member's early service retirement date occurs on or after the member's 50th birthday and before the member's 60th birthday and after completion of 20 years creditable service but prior to the normal retirement age (previously, but prior to the completion of 30 years of creditable service), the early service retirement allowance is to be equal to the greater of the amounts specified in subsubsubdivisions 1 and 2. Changes the computation of subsubsubdivision 2 to now provide the service retirement allowance as computed under GS 135-5(21)(2)a reduced by the sum of 5/12 of 1% thereof for each month by which the member's retirement date precedes the first day of the month coincident with or next following the month the member would have attained normal retirement age had the member continued working (previously, provided the allowance as computed under GS 135-5(b21)(2)a reduced by 5% multiplied by the difference between 30 years and the member's creditable service at retirement).

Amends GS 128-21(14a) to make the identical change to subdivision (a) of the definition of normal retirement age, as it applies to the Retirement System for Counties, Cities and Towns as the change made by the act to GS 135-1(14a), subdivision (a), as the term applies to the Retirement System for Teachers and State Employees.

Amends GS 128-27(a)(6) to make identical changes to the statute concerning service retirement benefits in the Retirement System for Counties, Cities and Towns as those made to GS 135-5(a)(4b) for the Retirement System for Teachers and State Employees.

Amends GS 128-27(b22), subdivisions (1) and (2), to make identical changes to the statute concerning service retirement allowance for members of the Retirement System for Counties, Cities and Towns who became members on or after January 1, 2017, as those made by this act to GS 135-5(b21), subdivisions (1) and (2), for the service retirement allowance for members of the Retirement System for Teachers and State Employees. 

Amends GS 135-53(12a), to change the definition of normal retirement age as it applies to the Consolidated Judicial Retirement Act, to mean, only for persons who became members on or after January 1, 2017, 50 years of age or older (previously, 55 years of age or older) with 30 years of creditable service or 65 years of age or older with five years of membership service.

Makes technical change to GS 135-58(b1).

Requires the Joint Legislative Program Oversight Committee to include in the 2016 Work Plan for the Program Evaluation Division of the General Assembly an examination of other states that have implemented a normal retirement age for a pension system that was already in place and to compare various elements of the total compensation and benefit package for the employees covered by each state's pension system to the employees covered by the pension systems amended by Section 3 of the act. Sets out six items to be included in the examination of other states' systems. Requires the Program Evaluation Division to submit its findings and recommendations to the Joint Legislative Program Evaluation Oversight Committee, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division on a date as determined by the Joint Legislative Program Evaluation Oversight Committee. Provides that this new subsection (n) of Section 3 of the act is effective when it becomes law.

Section 10

Amends GS 135-7(g), concerning the Legislative Enactment Implementation Arrangement (LEIA) under the Retirement System for Teachers and State Employees, by enacting a new subdivision (5), which requires the Department of the State Treasurer to annually report to the Board of Trustees, the Joint Legislative Commission on Government Operations, and the Fiscal Research Division on or before August 1 on the amounts and sources of funds collected by year pursuant to the statute and the amounts expended, the projected for which those funds were expended, and the current status of the projects. Also requires the Board of Trustees to post the report on its public website.

Amends GS 128-29(g), concerning the LEIA under the Retirement System for Counties, Cities and Towns, by enacting a new subdivision (5) that requires the same reporting as that required under new GS 135-7(g)(5) as enacted by this act under the Retirement System for Teachers and State Employees.

Section 13

Amends GS 127A-40(h1) to provide that any member of the North Carolina National Guard who is qualified for benefits under the statute and who is a member of a domiciled employees' or retirees' association that has at least 10,000 members (previously, that has at least 2,000 members), the majority of whom are active or retired employees of the State or public school employees, may authorize, in writing, the periodic deduction from the member's retirement benefits a designated lump sum to be paid to the employees' or retirees' association. Establishes new requirement that proof of the authorization must be available upon request to the Department of the State Treasurer.

Eliminates the previous language repealing GS 135-18.8(a), GS 135-75(a), GS 128-38.3(a), GS 128-38.3(c), and GS 120-4.32(a). 

Section 14

Deletes the previous language of Section 14(a) of the third edition, which amended GS 135-106(b), and its effective date set out previously in Section 14(b). Instead, new Section 14 of the act repeals SL 2015-68, Section 2, which eliminated the power of the Treasurer to destroy or dispose of property having no substantial commercial value and the Treasurer's immunity from liability under the North Carolina Unclaimed Property Act in GS 116B-70(a).

Section 19

Amends GS 135-8 by adding a new subsection (j) to require, upon the receipt of a report from the Retirement System generated pursuant to GS 135-8(f)(2)(f) containing a list of employees for whom the employer made a contribution to the North Carolina Teachers' and State Employees' Retirement System that is likely to require an additional employer contribution should the employee elect to retire in the following 12 months, the employer's chief financial officer to transmit a copy of the report to the chief executive of the employer, as well as to the governing body of the employer, including any board which exercises financial oversight of the employer, if applicable.

Amends GS 128-30 by adding a new subsection (j) to require, upon receipt of a report from the Retirement System generated pursuant to GS 135-8(f)(2)(f) containing a list of employees for whom the employer made a contribution to the North Carolina Local Governmental Employees' Retirement System that is likely to require an additional employer contribution should the employee elect to retire in the following 12 months, the employer's chief financial officer to transmit a copy of the report to the governing body of the employer, if applicable.

Section 21

Amends GS 135-109, concerning reports of earning under the Disability Income Plan of North Carolina, to establish that the Department of State Treasurer and Board of Trustees may require (previously, must require) each beneficiary to annually provide a statement of the beneficiary's income received as compensation for services, as described in the existing language. Establishes that the benefit payable to a beneficiary who does not or refused to provide the information requested within 120 days (previously, within 60 days) after the request may be suspended (previously, must not be paid a benefit) until the information so requested is provided, and should such refusal or failure to provide such information continue for 180 days (previously, 240 days) after such request, the right of a beneficiary to a benefit under Article 6 of GS Chapter 135 (Disability Income Plan of North Carolina) may be terminated.

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