Retirement Monitor - August 2021

In this issue: All in a Day's Work; Retirement Online; Thanks to Employers; Contribution Rates for TSERS; BBC Factor Changes - Budget Process; NC Supplemental Retirement Plans - Nothing Compares; ORBIT Authentication for Member Access; Upcoming Events for Employers and Employees; SHP Open Enrollment Dates

Table of Contents

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Graphic with the words "All in a Day's Work and the NC Total Retirement Plans logo


Graphic with a triangle and the text 5th at 5:00 in it and exclamation points around itEmployee and Employer contributions are due via the monthly Contribution Summary Instructions (CSI) by 5:00 p.m. on the 5th business day of the month along with the Monthly ORBIT payroll report. This schedule information is also located on our website.



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Retirement Online

Retirement Online is the easiest way for members to submit their retirement application.  Retirement Online guides the member through the process and offers answers to frequently asked questions along the way.  The member also receives important milestone notifications.

Retirement Online is accessed in a member’s ORBIT account.

Once Step 1 is completed, there is a 40 – 60 day waiting period so the Retirement Systems can receive employer information and provide calculations.

Members using Retirement Online will need to be able to print documents and have them notarized. Some paperwork will need to be uploaded, mailed, faxed or emailed to our office.


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Employer Training Series Begins in August

Get the information you need to understand your role and responsibilities as an employer and how to help your employees with retirement related matters. Registration is required.

Teachers’ and State Employees’ Retirement System (TSERS) Employer 6-Part Training Series

Local Governmental Employees’ Retirement System (LGERS) Employer 3-Part Training Series

Attend the entire series to gain the knowledge you need to assist your employees and understand employer roles and responsibilities of reporting. You can also register for a single topic if you:

  • are looking to learn about legislative changes; 
  • new processes or information; or 
  • if you need a refresher course.

All virtual employer trainings require registration.

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Thank you to those employers who have submitted questions or paid past due invoices in the last 90 days.  We are seeing many of these outstanding invoices being paid and in a timely manner.  Thank you for your response.  As we continue to generate a review invoices, please apply invoices to the following months submission or contact the ER team with any questions you have around invoices.

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Budget Process & Impact on Teachers’ and State Employees’ Retirement Systems (TSERS) Contribution Rates

In the June 2021 edition of the Retirement Monitor, we discussed the State budget process and its impact on TSERS employer contribution rates for FY 21-22, the fiscal year that begin July 1, 2021.

No State budget law setting the contribution rates for FY 21-22 has been enacted yet. Until new rates are enacted, G.S. 143C-5-4(b)(7) provides that employers will contribute to TSERS at the same rates as for FY 20-21. Those rates were 21.68% of compensation for general employees and 26.68% for law enforcement officers (LEOs) – including contributions toward retiree health, disability, and death benefits, as well as the NC 401(k) Plan for LEOs, but not including the 6% employee contribution.

The budget bill passed by the Senate in June 2021 (Senate Bill 105) would provide for FY 21-22 employer contribution rates totaling 22.27% of compensation for general employees and 27.27% for LEOs. Although the outcome of the State budget process is not yet known, RSD recommends that employers plan for an increase in the contribution rates for FY 21-22 at least commensurate with the rates in the Senate budget bill, and perhaps greater. For example, the Senate budget bill did not contemplate any retiree COLAs or other benefit improvements, and therefore did not include any additional cost that could be required from employers if benefit improvements are part of the final enacted State budget.

If new rates for FY 21-22 are enacted, and effective retroactively to July 1, 2021, it may mean that the rates contributed by employers for the interim period (continuation of the FY 20-21 rates) were not sufficient, in retrospect, based on the final budgeted rates. Based on currently applicable statute and processes, RSD would expect to address this in one or both of the following ways:

  • For employer reports that were due within approximately 90 days before the enactment of new rates, RSD would issue retroactive rate adjustment invoices. This is the process RSD followed in 2019. The June 2021 edition of the Retirement Monitor included a numerical example.
  • If there are employer reports older than that, then it may not feasible to recover all amounts back to July 1, 2021, through retroactive rate adjustment invoices. In this case, G.S. 143C-5-4(b)(7) provides that the rates set in the budget law must be further modified by State budget authorities, so that the “effective rates for the entire year reflect the rates set in the [budget law].” This may mean that following enactment of new rates in a budget law, the actual contribution rates charged to employers for the remainder of FY 21-22 could exceed the rates stated in the budget law. The later in the fiscal year the budget law is enacted, the greater this further adjustment may be for the remainder of FY 21-22.

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Contribution-Based Benefit Cap (CBBC) Factor Changes

Both Teachers’ and State Employees’ Retirement Systems (TSERS) and Local Governmental Employees’ Retirement Systems’ (LGERS) contain contribution-based benefit cap (“CBBC”) provisions, commonly called “anti-pension spiking” provisions. These provisions may apply when someone retires whose four-year average final compensation exceeds a certain threshold (currently $110,404.82 per year).

The law requires a calculation to be performed to determine the dollar amount of the CBBC (“capped benefit”) for the retiree. If the benefit the retiree could have received if not for these provisions (the “uncapped benefit”) exceeds the capped benefit, RSD will calculate the amount of a contribution to the Retirement System that would support the retiree’s benefit being restored to the uncapped level. For individuals who were hired before 2015 or did not have five years of membership service since 2015, the employer must contribute this amount. For other individuals, the retiree or employer may choose to make the contribution, or the retiree’s benefit may remain at the capped level.

The calculations of the capped benefit and the resulting contribution amount both require the use of a “present value” factor, varying based on the retiree’s age. The present value factor is determined by the Retirement Systems’ independent consulting actuaries based on assumptions established by the Boards of Trustees as to future investment return and life expectancies across the Retirement Systems.

In January 2021, the Boards of Trustees adopted new actuarial assumptions as part of a regular review of assumptions. As a result, the present value factors used in CBBC calculations will change, effective for retirements on or after January 1, 2022. The new factors are available on RSD’s website here. The previous factors, which apply for retirements through the end of 2021, are available here (see “Service” column).

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NC Supplemental Retirement Plans – Nothing Compares

The North Carolina Supplemental Retirement Plans (NC 401(k) and NC457 Plans and the NC 403(b) Program) have been awarded TWO NAGDCA Leadership Awards in 2021.

Outstanding Achievement in Technology and Interactive Media

Outstanding National Retirement Security Month Campaign

The NAGDCA Leadership Awards recognize excellence and innovation in government defined contribution plans across five categories.

NC Treasurer: NC Retirement Plans Wins Two NAGDCA Leadership Awards for Excellence and Innovation

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Getting Started with Text Message Authentication **Coming Soon**

Our members’ private information is important to us and we want to make sure we have the right member before allowing access to ORBIT. Device registration is required, and we do this by sending the member a six-digit security code. 

We are offering enhanced authentication by text message for those members who have a mobile number in their account. It’s easy to add a mobile number to your profile by visiting ORBIT and clicking Maintain Personal Information.

Things to consider:

  • A mobile phone number in your profile that accepts SMS text messages is required (some VOIP phones are not SMS text compatible).
  • Text messaging rates may apply depending on a member’s mobile phone plan.
  • All members should have a personal email address in their profile. This is also used for authentication.

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We have events scheduled throughout the year for employers and for members.  Visit our calendar for details and to register.

Stay up to date and follow us on Facebook!

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Attention State Health Plan Agencies:

Save the Date!

2022 Open Enrollment is set for October 11 – 29, 2021!


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