AN ACT TO AUTHORIZE THE COLLECTION OF ADDITIONAL CONTRIBUTIONS FROM EMPLOYING UNITS; TO ADDRESS RESPONSIBILITIES FOR CONTRIBUTION-BASED BENEFIT CAP LIABILITIES WHEN THE FINAL EMPLOYER OF A MEMBER IS NOT THE MEMBER'S EMPLOYER FOR AVERAGE FINAL COMPENSATION CALCULATIONS AND TO ADJUST THE FORMULA FOR REDUCED RETIREMENTS WITH CONTRIBUTION-BASED BENEFIT CAP LIABILITIES UNDER THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM AND THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM; TO PUT A LITIGATION PAUSE IN PLACE AND ESTABLISH A WORKGROUP THAT MAY REPORT TO THE GENERAL ASSEMBLY; AND TO PROVIDE EARLY NOTIFICATION TO THE LOCAL GOVERNMENT COMMISSION
13 OF PROPOSED FINANCING ARRANGEMENTS.
Adds annualized final compensation to the defined terms set forth for the Teachers' and State Employees' Retirement System (TSERS) in GS 135-1, defined as compensation received during the final year of service that is included in the member's average final compensation.
Amends GS 135-5(a3), regarding the anti-pension-spiking contribution-based benefit cap, to specify that the retirement allowance of a TSERS member with a final average compensation, as defined, of more than $100,000, as indexed, is not subject to the contribution-based benefit cap if the compensation was earned from multiple simultaneous employers, unless an employer's share of the annualized average final compensation exceeds $100,000, as indexed. Revises the provisions applicable for a member who became a member before January 1, 2015, or who has not earned at least five years of membership service in TSERS after January 1, 2015. Provides that if the retirement allowance of such a member exceeds the member's contribution-based benefit cap, then that member's retirement allowance cannot be reduced, but an additional contribution is required, as calculated under GS 135-4(jj) and GS 135-8(f)(2)f. (previously the member's last employer is required to make an additional contribution as specified in GS 135-8(f)(2)f.). Makes the additional contribution required from: (1) if the member's annualized final compensation from the member's last employer is $100,000 or more, as indexed, then the additional contribution is required from the member's last employer; (2) if the member's annualized final compensation, as defined, from the member's last employer is less than $100,000, as indexed, and if the member was not eligible to retire with an unreduced benefit at the time of hire by the last employer, then the additional contribution is required to be paid from the member's last employer; (3) if the member's annualized final compensation, as defined, from the member's last employer is less than $100,000, as indexed, and if the member was eligible to retire with an unreduced benefit at the time of hire by the last employer, then the additional contribution is required from the most recent employer from which the member earned an annualized final compensation of $100,000 or more, as indexed. Makes conforming deletions in GS 135-8(f)(2)f. regarding employer contributions for employees who became a member on or after January 1, 2015, and who earned at least five years of membership service after January 1, 2015. Effective retroactively to January 1, 2019, and applies to TSERS members who retire on or after that date.
Bars local boards of education from filing any legal actions against the State regarding the anti-pension spiking contribution-based benefit cap established in GS 135-5(a3), as amended, from the period beginning on the date the act becomes law and ending on June 30, 2026.
Establishes an annual reporting requirement for the Board of Trustees of TSERS (Board), beginning January 31, 2022, and ending in 2027, to report to the NCGA regarding all legal actions filed by local boards of education, included contested cases, regarding the anti-pension spiking contribution-based benefit cap of GS 135-5(a3), as amended. Details required content. Requires applicable local boards to provide a statement of legal fees and costs associated with each legal action to the Board by January 1 of each year, beginning with the first required report, including both cumulative totals and itemized costs incurred.