Table of Contents
- Beneficiary Forms Online
- 2016 Annual Benefits Statements Are Now Available!
- LGERS 1,000 Hour Rule Reminder
- IRC Section 415(b) and Qualified Excess Benefit Arrangement (QEBA)
- Local NC 403(b) Retirement Education Counselors Available Across NC
- 403(b) Lawsuits Claim Higher Ed Administrators Breached Fiduciary Duties
Beneficiary Forms Online
Make sure your new employees enroll in ORBIT and take advantage of the new online beneficiary designation management. For employees who don’t designate their beneficiaries in ORBIT, but elect to send in a form, please note that the Retirement Systems cannot process these forms until after the new employee has been set up in our system, and assigned a Member ID.
In addition, once aspiring law enforcement officers complete the academy and are officially coded as LEOs, please have them complete Form 276, Separate Benefit Plan for Law Enforcement.
2016 Annual Benefits Statements Are Now Available!
If your employees are current North Carolina public employees with more than 12 months of service, their 2016 Annual Benefits Statement (ABS) is in their ORBIT account, and they can begin planning their retirement today! The ABS is a unique, personalized snapshot of their projected sources of income in retirement.
Because ORBIT was recently updated with a new look and feel, the Retirement Systems has developed several “How To” videos as well as some Frequently Asked Questions to help members navigate the updated ORBIT site.
The ABS lists service in the NC Retirement Systems as of Dec. 31, 2016, estimated retirement benefits from their pension, estimated Social Security income, and their contributions to the NC 401(k), NC 457 Plans, and the NC 403(b) Program. The statement also calculates any outside assets or pensions that members entered into the Retirement Income Calculator on the Prudential site. These combined assets will be calculated into their projected monthly retirement income, too.
Visit the Annual Benefits Statement page of our website where members will find:
- A User Guide training tutorial
- Frequently Asked Questions
- An animated video about the Annual Benefits Statement
- Links to resources for all ages and career stages
Statement of Income Forms to be Mailed to Disability Recipients in February
The Retirement Systems Division will mail approximately 13,000 Statement of Income (SOI) forms in February 2016, to members receiving disability benefits from RSD. State law requires each disability benefit recipient to complete and submit a Statement of Income form to report earnings from employment and/or benefits from certain other sources each year to RSD. Any employee failing to return the form by April 1, 2016, may have his/her monthly disability benefit suspended. If the monthly benefit is suspended, any health coverage the benefit recipient was receiving through the State Health Plan, if applicable, will also be suspended. If the benefit is suspended, and we later receive the required information, the monthly benefit may be re-instated retroactively; however, the State Health Plan coverage, if applicable, will not be re-instated retroactively. As a result, an employee may experience a lapse in health coverage, which means the employee may not have health coverage for a month or more.
LGERS 1,000 Hour Rule Reminder
North Carolina Retirement Systems Laws require an employee to become a contributing member of the Local Governmental Employees’ Retirement System (LGERS), as a condition of employment, on the date he or she begins employment (or after a required local unit waiting period) if the employee is employed by a participating LGERS employer in a regular position that requires at least 1,000 hours of work in a calendar year. The employee will not be a contributing member of LGERS if his or her work is considered “temporary employment,” meaning employment for a limited term which does not exceed 12 consecutive months on a non-recurring basis for an LGERS employer, or “statutorily required interim employment,” meaning employment as an interim city or county manager for a period that does not exceed 12 months on a non-recurring basis.
To determine if an employee is required to be an LGERS member and if contributions must be submitted to LGERS on his or her behalf, examine the requirements of the position.The hours required of the position determine membership in LGERS, not the actual number of hours an LGERS employee works in a calendar year. It is important to remember the key is the position. If the position requires 1,000 hours or more per calendar year (January through December), then the person in the position must become a contributing member of LGERS. For example, if an employee works 999 hours and then goes home, but the position itself requires 1,000 hours or more per calendar year, then the employee must be a contributing member of LGERS.
IRC Section 415(b) and Qualified Excess Benefit Arrangement (QEBA)
Under federal tax law, a retiree is permitted to receive pension benefits up to a set annual allowable limit determined by the Internal Revenue Code (IRC). The retirement benefits for some highly compensated employees (i.e., generally earning more than $180,000 annually) may be subject to the IRC section 415(b) annual pension benefit limit.
Legislation enacted by the 2013 General Assembly established a Qualified Excess Benefit Arrangement (QEBA) fund to pay the part of a retiree’s retirement allowance that exceeds the limit. Recent legislation amended the QEBA law to provide that members hired prior to January 1, 2015, are eligible to receive benefit payments from the QEBA fund. However, the last employer for a member who retires on or after August 1, 2016, will be required to reimburse the QEBA fund for any payments made to that retiree from the QEBA fund. For more information, please refer to the Employer Manuals.
Local NC 403(b) Retirement Education Counselors Available Across NC
The nationally recognized NC 403(b) Program – available to school districts and community colleges – now features more than a dozen highly trained retirement educational counselors. As a salaried team of Prudential Retirement employees working on behalf of the NC Total Retirement Plans, the field team is dedicated to helping NC public employees learn how reach their retirement savings goals.
Counselors are available locally to assist school district and community college administrators with all aspects of sponsoring the NC 403(b) Program, and can also provide information about the NC 401(k) and NC 457 Plans as well. The NC 403(b) Program offers participants carefully selected, institutionally priced investment options, a commitment to fee transparency and compliance support for plan sponsors.
The Supplemental Retirement Board of Trustees, chaired by Treasurer Folwell, provides trusted oversight of fund managers, performance and fees, and participants enjoy a flat $31 recordkeeping fee per account, regardless of the size of their account balance. The expanded counselor force is just one major benefit from our February transition to Prudential Retirement for NC 430(b) recordkeeping services. Find your counselor here. They’ll come to you!
Seeking Hosts Statewide for Retirement Planning Conferences
The North Carolina Total Retirement Plans is seeking venues capable of seating approximately 200 employees so that we can bring retirement planning conferences to your area.
We conduct retirement conferences for members of the Teachers’ and State Employees’ Retirement System and the Local Governmental Employees’ Retirement System. These conferences include representatives from the NC 401(k), 457, and 403(b) Plans. The conferences provide an orientation for new members, pre-retirement planning information for members closer to retirement, and educational information for personnel officers and others who handle retirement matters. A representative from the State Health Plan will be on hand to answer questions about health coverage for eligible retirees.
- TSERS conferences begin at 9:30 a.m., unless otherwise noted.
- LGERS conferences begin at 1:30 p.m., unless otherwise noted.
Employers interested in hosting retirement planning conferences can email their availability to: Employer.Training@nctreasurer.com.
403(b) Lawsuits Claim Higher Ed Administrators Breached Fiduciary Duties
NC 403(b) Offers Compliance Support to School District and Community College Sponsors
In the last year, the list of lawsuits alleging breaches of fiduciary duty in the 403b higher education community has grown. Although specifics vary, all allege that university administrators failed in their fiduciary duty to act in the interest of plan participants, most notably by offering too many (or too confusing) investment options and by charging excessive fees (sometimes including multiple recordkeeping fees).
School district and community college administrators - how much do you know about your fiduciary responsibility related to the 403b plans you offer?
School districts and community colleges that offer a 403(b) plan are fiduciaries with these legal responsibilities:
- To act solely in the interest of plan participants and their beneficiaries;
- To carry out duties prudently; To follow plan documents carefully;
- To offer appropriate and diverse plan investments; and
- To ensure reasonable plan expenses.
Administrators hold high-pressure jobs with varied responsibilities competing for attention. How do you know how well you are doing in your role as fiduciary of your 403(b) plan? Start by asking:
- Do you have a written investment policy statement and do you monitor and review all investments, fund performance, and fund managers on a regular basis?
- Do you maintain a process for regularly reviewing investment options, fees and performance?
- Do you regularly monitor the fees and performance of your administrative and recordkeeping vendors?
NC 403(b) Program Benefits from Strong Board Oversight
Consider offering the NC 403(b) Program. How does it compare with supplemental retirement plans you offer now? The award-winning NC 403(b) Program, established by 2011 NC legislation, is administered by the Department of State Treasurer, and benefits from strong fiduciary oversight by the Supplemental Board of Trustees and its chair, State Treasurer Dale Folwell, CPA.
The NC 403(b) Program for K-12 public schools and community colleges provides employers significant compliance and fiduciary support, and is a powerful way to help faculty and staff plan for a secure retirement. The Board, and its Supplemental Investment Subcommittee, meet regularly to carefully monitor fund performance, fund managers, and investment and administrative fees. A NC 403(b) Program Investment Policy Statement governs investment choices and overall plan design. Plan documents and plan changes, quarterly investment performance reports, investment and recordkeeping fees – even Board meetings and minutes – are available to the public.
The NC 403(b) Program collaborates with a single recordkeeper, Prudential, who also provides recordkeeping services for the nearly 270,000 participants in the NC Total Retirement 401(k) and 457 Plans. Participants pay a flat, annual recordkeeping fee of $31 per account, regardless of their account balance. The Department leverages its size and buying power to offer diverse, lower-cost investment options. A robust communications effort includes ongoing development of participant and employer educational resources explaining fees, asset allocation, and diversification. A field team of 13 local retirement counselors provide local, one-on-one education and support to participants and employers.
For assistance in fulfilling responsibilities to their employees, school districts and community colleges can count on compliance and fiduciary support under the NC 403(b) Program. To learn more, connect with your NC Total Retirement Plan retirement counselor or call 1-866-NCPLANS.