GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
SESSION LAW 2002-153
SENATE BILL 1238
AN ACT to allow the purchase of withdrawn service in the local governmental employees' retirement system, to CORRECT the calculation of benefits for members of the teachers' and state employees' retirement system who purchase withdrawn service, and to increase appropriations to the retirement systems division.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 128-26(i) reads as rewritten:
"(i) Notwithstanding
any other provision of this Chapter, any person who withdrew his contributions
in accordance with the provisions of G.S. 128-27(f) or 135-5(f) or the rules
and regulations of the Law Enforcement Officers' Retirement System and who
subsequently returns to service may, upon completion of 10 five
years of prior and current membership service, repay in a total lump sum any
and all of the accumulated contributions previously withdrawn with sufficient
interest added thereto to cover one half of the cost of providing such
additional credit plus a fee to cover expense of handling which shall be
determined by the Board of Trustees and receive credit for the service
forfeited at time of withdrawal(s), provided that he left service prior to July
1, 1975. interest compounded annually at the rate of six and one-half
percent (6.5%) for each calendar year from the year of withdrawal to the year
of repayment plus a fee to cover expense of handling which shall be determined
by the Board of Trustees, and receive credit for the service forfeited at time
of withdrawal(s). Any person who leaves service after June 30, 1975, and
who withdraws his contributions in accordance with G.S. 128-27(f) or 135-5(f)
or the rules and regulations of the Law Enforcement Officers' Retirement System
and who subsequently returns to service may, upon completion of 10 years of
prior and current membership service, repay in a total lump sum any and all of
the accumulated contributions previously withdrawn with sufficient interest
added thereto to cover the full cost of providing such additional credit plus a
fee to cover expense of handling which shall be determined by the Board of
Trustees and receive credit for the service forfeited at time of withdrawal(s).
These provisions shall apply equally to retired members who had attained 10
five years of prior and current membership service prior to retirement. Cost
as used in this subsection shall mean the amount of money required to provide
additional retirement benefits based on service credit allowed at the time any
adjustment to the service credit of a member is made. The retirement
allowance of a retired member who restores service under this subsection shall
be increased the month following the month payment is received. The increase in
the retirement allowance shall be the difference between the initial retirement
allowance, under any optional allowance elected at the time of retirement, and
the amount of the retirement allowance, under any optional allowance elected at
the time of retirement, to which the retired member would have been entitled
had the service not been previously forfeited, adjusted by any increases in the
retirement accrual rate occurring between the member's date of retirement and
the date of payment. The increase in the retirement allowance shall not include
any adjustment for cost-of-living increases granted since the date of
retirement."
SECTION 2. G.S. 128-26(k) reads as rewritten:
"(k) Notwithstanding any language to the contrary of any provision of this section, or of any repealed provision of this section that was repealed with the inchoate and accrued rights preserved, all repayments and purchases of service credits, allowed under the provisions of this section or of any repealed provision of this section that was repealed with inchoate and accrued rights preserved, must be made within three years after the member first becomes eligible to make such repayments and purchases. Any member who does not repay or purchase service credits within said three years after first eligibility to make such repayments and purchases may, under the same conditions as are otherwise required, repay or purchase service credits provided that the repayment or purchase equals the full cost of the service credits calculated on the basis of the assumptions used for purchases of the actuarial valuation of the System's liabilities and shall take into account the additional retirement allowance arising on account of such additional service credit commencing at the earliest age at which such member could retire on an unreduced retirement allowance as determined by the Board of Trustees upon the advice of the consulting actuary. Notwithstanding the foregoing provisions of this subsection that provide for the purchase of service credits, the terms "full cost", "full liability", and "full actuarial cost" include assumed annual post-retirement allowance increases, as determined by the Board of Trustees, from the earliest age at which a member could retire on an unreduced service allowance. Notwithstanding the foregoing, on and after January 1, 2003, the provisions of this subsection shall not apply to the repayment of contributions withdrawn pursuant to subsection (i) of this section."
SECTION 3. G.S. 128-26(n) is repealed.
SECTION 4. G.S. 135-4(k) reads as rewritten:
"(k) Notwithstanding any
other provision of this Chapter, any person who withdrew his contributions in
accordance with the provisions of G.S. 128-27(f) or G.S. 135-5(f) or the rules
and regulations of the Law-Enforcement Officers' Retirement System and who
subsequently returns to service may, upon completion of five years of
membership service, repay in a total lump sum any and all of the accumulated
contributions previously withdrawn with interest compounded annually at the
rate of six and one-half percent (6.5%) for each calendar year from the year of
withdrawal to the year of repayment plus a fee to cover expense of handling
which shall be determined by the Board of Trustees, and receive credit for the
service forfeited at time of withdrawal. These provisions shall apply equally
to retired members who had attained five years of membership service prior to
retirement. The retirement benefit shall be increased the month following
the receipt of payment. The retirement benefit shall not include any benefit as
a result of retirement adjustments or cost-of-living increases granted since
the date of retirement. The retirement benefit will be calculated based in the
accrual rate at the time of purchase. The retirement allowance of a
retired member who restores service under this subsection shall be increased
the month following the month payment is received. The increase in the
retirement allowance shall be the difference between the initial retirement
allowance, under any optional allowance elected at the time of retirement, and
the amount of the retirement allowance, under any optional allowance elected at
the time of retirement, to which the retired member would have been entitled
had the service not been previously forfeited, adjusted by any increases in the
retirement accrual rate occurring between the member's date of retirement and
the date of payment. The increase in the retirement allowance shall not include
any adjustment for cost-of-living increases granted since the date of
retirement.
Notwithstanding any provision to the contrary, a law
enforcement officer who was transferred from the Law Enforcement Officers'
Retirement System to this Retirement System pursuant to Article 12C of Chapter
143 of the General Statutes and withdrew his accumulated contributions prior to
January 1, 1985, in accordance with G.S. 128-27(f) or G.S. 135-5(f) for non-law
enforcement service and who has five years or more of membership service
standing to his credit may repay in a total lump sum the accumulated
contributions previously withdrawn with interest compounded annually at the
rate of six and one-half percent (6.5%) for each calendar year from the year of
withdrawal to the year of repayment plus a fee to cover expense of handling which
shall be determined by the Board of Trustees, and receive credit for the
service forfeited at time of withdrawal. The retirement benefit shall be
increased the month following the receipt of payment. The retirement benefit
shall not include any benefit as a result of retirement adjustments or
cost-of-living increases granted since the date of retirement. The retirement
benefit will be calculated based in the accrual rate at the time of purchase.withdrawal(s).
The retirement allowance of a retired member who restores service under this
subsection shall be increased the month following the month payment is
received. The increase in the retirement allowance shall be the difference
between the initial retirement allowance, under any optional allowance elected
at the time of retirement, and the amount of the retirement allowance, under
any optional allowance elected at the time of retirement, to which the retired
member would have been entitled had the service not been previously forfeited,
adjusted by any increases in the retirement accrual rate occurring between the
member's date of retirement and the date of payment. The increase in the
retirement allowance shall not include any adjustment for cost-of-living
increases granted since the date of retirement."
SECTION 4.1. The appropriation to the Department of State Treasurer, Retirement Systems Division, is increased in the amount of two hundred forty-seven thousand seven hundred thirteen dollars ($247,713) to fund eight two-year time-limited positions to implement the provisions of this act.
SECTION 5. This act becomes effective January 1, 2003.
In the General Assembly read three times and ratified this the 23rd day of September, 2002.
s/ Marc Basnight
President Pro Tempore of the Senate
s/ James B. Black
Speaker of the House of Representatives
s/ Michael F. Easley
Governor
Approved 2:36 p.m. this 9th day of October, 2002