NORTH CAROLINA GENERAL ASSEMBLY

1965 SESSION

 

 

CHAPTER 781

HOUSE BILL 692

 

 

AN ACT TO AMEND ARTICLE 3 OF CHAPTER 128 OF THE GENERAL STATUTES, RELATING TO THE NORTH CAROLINA LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM.

 

The General Assembly of North Carolina do enact:

 

Section 1.  Chapter 128 of the General Statutes, as the same appears in the 1964 Replacement Volume of the General Statutes, is hereby amended as set out below:

(1)        Subdivision (5) of G.S. 128-21 is hereby amended to read as follows:

"(5)      Average final compensation shall mean the average annual compensation of a member during the five consecutive calendar years, within the last ten calendar years of his creditable service, producing the highest such average."

(2)        G.S. 128-24 is hereby amended in the following respects:

(A)       Subdivision (1) thereof is amended by adding at the end the following:

"On and after July 1, 1965, new Extension Service employees in the employ of a county participating in the Local Governmental Employees' Retirement System are hereby excluded from participation in the Teachers' and State Employees' Retirement System to the extent of that part of their compensation derived from a county; provided that on and after July 1, 1965, new Extension Service employees who are required to accept a Federal Civil Service appointment may elect in writing on a form acceptable to the Retirement System, to be excluded from the Teachers' and State Employees' Retirement System and the local Retirement System."

(B)       Subdivision (4) thereof is amended by adding thereto a new first paragraph to read as follows:

"The provisions of this subdivision (4) shall apply to any member whose retirement became effective prior to July 1, 1965, and became entitled to benefits hereunder in accordance with the provisions hereof. Such benefits shall be computed in accordance with the provisions of G.S. 128-27(b1) as in effect at the date of such separation from service."

(C)       A new subdivision (5) is hereby added thereto to read as follows:

"(5)      The provisions of this subdivision (5) shall apply to any member whose membership is terminated on or after July 1, 1965, and who becomes entitled to benefits hereunder in accordance with the provisions hereof. Such benefits shall be computed in accordance with the provisions of G.S. 128-27(b1).

"a.        Notwithstanding any other provision of this Chapter, any member who separates from service prior to the attainment of the age of sixty (60) years for any reason other than death or retirement for disability as provided in G.S. 128-27, subsection (c), after completing fifteen (15) or more years of creditable service, and who leaves his total accumulated contributions in said system shall have the right to retire on a deferred retirement allowance upon attaining the age of sixty (60) years; provided that such member may retire only upon written application to the board of trustees setting forth at what time, not less than thirty (30) days nor more than ninety (90) days subsequent to the execution and filing thereof, he desires to be retired. Such deferred retirement allowance shall be computed in accordance with the provisions of G.S. 128-27, subsection (b1).

"b.        In lieu of the benefits provided in paragraph 'a' of this subdivision (5), any member who separates from service on or after July 1, 1965, and prior to the attainment of the age of sixty (60) years, for any reason other than death or retirement for disability as provided in G.S. 128-27, subsection (c), after completing twenty (20) or more years of creditable service and after attaining the age of fifty (50) years, and who leaves his total accumulated contributions in said system, may elect to retire on an early retirement allowance; provided that such member may so retire only upon written application to the board of trustees setting forth at what time, not less than thirty (30) days nor more than ninety (90) days subsequent to the execution and filing thereof, he desires to be retired; provided further that such application shall be duly filed within sixty (60) days following the date of such separation. Such early retirement allowance so elected shall be the actuarial equivalent of the deferred retirement allowance otherwise payable at the attainment of the age of sixty (60) years upon proper application therefor.

"c.        The provisions of paragraph 'c' of the preceding subdivision (4) shall apply equally to this subdivision (5)."

(3)        G.S. 128-27 is hereby amended in the following respects:

(A)       Subdivision (b) thereof is amended to read as follows:

"(b)      Service Retirement Allowance of Persons Retiring on or After July 1, 1959, but Prior to July 1, 1965. Upon retirement from service on or after July 1, 1959, but prior to July 1, 1965, a member shall receive a service retirement allowance which shall consist of:

"(1)      An annuity which shall be the actuarial equivalent of his accumulated contributions at the time of his retirement; and

"(2)      A pension equal to the annuity allowable at the age of sixty-five (65) years or at his retirement age, whichever is the earlier, on the basis of contributions made prior to such earlier age; and

"(3)      If he has a prior service certificate in full force and effect, an additional pension which shall be equal to the annuity which would have been provided at the age of sixty-five (65) years, or at the earlier age of retirement if prior thereto, by twice the contributions which he would have made during such period of service had the system been in operation and he contributed thereunder at the rate of

"a.        Six and twenty-five hundredths per centum (6.25%) of his compensation if such certificate is a Class A certificate, or

"b.        Five per centum (5%) of his compensation if such certificate is a Class B. certificate, or

"c.        Four per centum (4%) of his compensation if such certificate is a Class C certificate."

(B)       Subdivision (b1) thereof is amended to read as follows:

"(b1)    Service Retirement Allowances of Persons Retiring on or After July 1, 1965. Upon retirement from service on or after July 1, 1965, a member shall receive a service retirement allowance which shall consist of:

"(1)      If the member's service retirement date occurs on or after his sixty-fifth (65) birthday, such allowance shall be equal to the sum of (i) one per centum (1%) of the portion of his average final compensation not in excess of forty‑eight hundred dollars ($4800.00), plus one and one-half per centum (1 ˝%) of the portion of such compensation in excess of forty-eight hundred dollars ($4800.00) multiplied by the number of years of his creditable service rendered prior to January 1, 1966, and (ii) one per centum (1%) of the portion of his average final compensation not in excess of fifty-six hundred dollars ($5600.00) plus one and one-half per centum (1%%) of the portion of such compensation in excess of fifty-six hundred dollars ($5600.00), multiplied by the number of years of his creditable service rendered after January 1, 1966.

"(2a)     If the member's service retirement date occurs on or after his sixtieth (60) birthday but before his sixty-fifth (65) birthday, his service retirement allowance shall be computed as in (1) above but shall be reduced by five-twelfths of one per centum (5/12 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following his sixty-fifth (65) birthday.

"(2b)    If the member's service retirement date occurs before his sixtieth (60) birthday, his service retirement allowance shall be the actuarial equivalent of the allowance payable at the age of sixty (60) years as computed in (2a) above.

"(3)      Notwithstanding the foregoing provisions, any member whose creditable service commenced prior to July 1, 1965, and uniformed policemen or firemen not covered under the Social Security Act employed thereafter, shall receive not less than the benefit provided by G.S. 128-27(b)."

(C)       Subdivision (d) thereof is amended to read as follows:

"(d)      Allowance on Disability Retirement of Persons Retiring Prior to July 1, 1965. Upon retirement for disability, in accordance with subsection (c) above, prior to July 1, 1965, a member shall receive a service retirement allowance if he has attained the age of sixty (60) years, otherwise he shall receive a disability retirement allowance which shall consist of:

"(1)      An annuity which shall be the actuarial equivalent of his accumulated contributions at the time of the retirement;

"(2)      A pension equal to seventy-five per centum (75%) of the pension that would have been payable upon service retirement at the age of sixty-five (65) years had the member continued in service to the age of sixty-five (65) years without further change in compensation."

(D)       A new subsection (d1) is added immediately following subsection (d) to read as follows:

"(d1)    Allowance on Disability Retirement of Persons Retiring on or After July 1, 1965. Upon retirement for disability, in accordance with subsection (c) above, on or after July 1, 1965, a member shall receive a service retirement allowance if he has attained the age of sixty (60) years, otherwise he shall receive a disability retirement allowance which shall be computed as follows:

"(1)      Such allowance shall be equal to the service retirement allowance which would have been payable had he continued in service without further change in compensation, to the age of sixty (60) years, minus the actuarial equivalent of the contributions he would have made during such continued service.

"(2)      Notwithstanding the foregoing provisions, any member whose creditable service commenced prior to July 1, 1965, and uniformed policemen or firemen not covered under the Social Security Act employed thereafter, shall receive not less than the benefit provided by G.S. 128-27(d)."

(E)       Subsection (f) is amended by rewriting the third sentence as follows:

"Upon receipt of proof satisfactory to the board of trustees of the death, prior to retirement, of a member or former member there shall be paid to such person or persons as he shall have nominated by written designation duly acknowledged and filed with the board of trustees, if such person or persons is living at the time of the member's death, otherwise to the member's legal representatives, the amount of his accumulated contributions at the time of his death."

(F)       The first paragraph of subsection (g) thereof is hereby amended by rewriting said paragraph to read as follows:

"Election of Optional Allowance. With the provision that until the first payment on account of any benefit becomes normally due, or his first retirement check has been cashed, any member may elect to receive his benefits in a retirement allowance payable throughout life, or he may elect to receive the actuarial equivalent of such retirement allowance in a reduced allowance payable throughout life under the provisions set forth in options one, two, three, or four below: provided further, that an optional election may be made after attainment of age sixty (60) without establishment of a date of retirement. Such election will be effective thirty (30) days after execution and filing thereof with the Retirement System. The election of option two or option three or nomination of the person thereunder shall be revoked if such person nominated dies prior to the date the first payment becomes normally due or the first retirement check has been cashed. Such election may be revoked by the member prior to the date the first payment becomes normally due or his first retirement check has been cashed. Any member dying in service after his optional election has become effective shall be presumed to have retired on the first day of the month following the date of death."

(G)       Subsection (g) thereof is amended so that option one shall read as follows:

"Option One. (a) In the Case of a Member Who Retires Prior to July 1, 1965. If he dies before he has received in annuity payments the present value of his annuity as it was at the time of his retirement, the balance shall be paid to such person as he shall nominate by written designation duly acknowledged and filed with the board of trustees or, if none, to his legal representative.

"(b)      In the Case of a Member Who Retires on or After July 1, 1965. If he dies within ten (10) years from his retirement date, an amount equal to his accumulated contributions at retirement, less one one-hundred twentieth (1/120th) thereof for each month for which he has received a retirement allowance payment, shall be paid to such person as he shall nominate by written designation duly acknowledged and filed with the board of trustees or, if none, to his legal representative; or".

(H)       Subsection (g) thereof is amended so that option four shall read as follows:

"Option Four. Adjustment of Retirement Allowance for Social Security Benefits. Until the first payment on account of any benefit becomes normally due, any member may elect to convert his benefit otherwise payable on his account after retirement into a retirement allowance of equivalent actuarial value of such amount that with his benefit under Title II of the Federal Social Security Act, he will receive, so far as possible, approximately the same amount per year before and after the earliest age at which he becomes eligible, upon application therefor, to receive a Social Security benefit. A member who makes an election in accordance with this option shall be deemed to have made a further election of option one above."

(4)        G.S. 128-28 is hereby amended as follows:

(A)       Line three of subsection (h) is hereby amended by striking out the word "secretary" and substituting in lieu thereof the word "director".

(B)       Line two of subsection (1) is hereby amended by striking out the word "three" and substituting in lieu thereof the words "not less than three nor more than five".

(5)        G.S. 128-30 is hereby amended by adding at the end of subsection (b)(1) a new paragraph to read as follows:

"Notwithstanding the foregoing, effective July 1, 1965, with respect to the period of service commencing on July 1, 1965, and ending December 31, 1965, the rates of such deductions shall be four per centum (4%) of the portion of compensation not in excess of forty-eight hundred dollars ($4800.00) and six per centum (6%) of the portion of compensation in excess of forty‑eight hundred dollars ($4800.00); and with respect to the period of service commencing January 1, 1966, the rate of such deduction shall be four per centum (4%) of the portion of compensation not in excess of fifty-six hundred dollars ($5600.00) and six per centum (6%) of the portion of compensation in excess of fifty-six hundred dollars ($5600.00). Such rates shall apply uniformly to all members of the Retirement System, irrespective of class; provided, however, that with respect to uniformed policemen or firemen not covered under the Social Security Act, commencing July 1, 1965, the rate of such deductions shall be six per centum (6%) of compensation."

Sec. 2.  All laws and clauses of laws in conflict with this Act are hereby repealed.

Sec. 3.  This Act shall become effective July 1, 1965.

In the General Assembly read three times and ratified, this the 2nd day of June, 1965.