Retirement Monitor - February 2023

Timely and Accurate Employer Reporting
Employer-Implemented New Systems and Testing
Return-to-Work Earnable Allowance
Peak Retirement Season
Secure 2.0 Act Changes
"Understanding Your Medical Plan Options When You Become Medicare Eligible" Webinars
Employer & Member Webinars

Timely and Accurate Employer Reporting

Employee 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. If the 5th falls on a weekend, contributions are due the following business day by 5 p.m. This schedule has been updated to include 2023 dates and is located on our website.

myNCRetirement Tip:  Create a calendar reminder so you meet the required deadlines.

⭐Employer-Implemented New Systems and Testing

Are you updating or implementing a new system or vendor? Once you have finalized writing and working with a vendor on your business requirements and the new system is in place, the Retirement Systems Division is here to help with testing.

We request that you notify us as soon as possible if you are making a change or upgrade so we can schedule testing that aligns with your planned start date. You should expect testing to take at least 60 days.

Some retirees of the Teachers’ and State Employees’ Retirement System and Local Governmental Employees’ Retirement System will officially retire and later be reemployed.

Retirement is defined as the commencement of monthly retirement benefits, along with a termination of employment and the complete separation from active service with no intent or agreement, express or implied, to return to service. The NC General Statutes are clear in that there must be a full stop in employment, and a break from work for a specific amount of time with no plans to return to work up to and prior to an employee’s effective retirement date.

If the retiree returns to work in a part-time or full-time capacity for an employer in the Retirement System from which they retired, certain earnings limitations may apply. It is required that employers report retirees who return-to-work in a full-time or part-time capacity to the Retirement Systems.

After a six-month break in TSERS, or a one-month break in LGERS and return to work in a position that does not require membership in those systems, you are subject to the earning restrictions below. Remember, there can be no prearranged agreement to return to work prior to retirement, even if you do fulfill the waiting period requirements.

You can earn whichever is greater:

50% of member’s gross pre-retirement salary (excluding termination payments) or
$39,660 (2023 amount)

A retiree who has returned to work can log in to ORBIT, click on View Earnable Allowance in the left navigation and see their earnable allowance for re-employment purposes.

Returning to Employment with ORP as a TSERS Retiree

Did you Know? – the Optional Retirement Program (ORP) is an alternative retirement option to the Teachers’ and State Employees’ Retirement System (TSERS). Established by the General Assembly in 1971, participation in the Optional Retirement Program is limited to university personnel who are eligible for membership in the Teachers' and State Employees' Retirement Program.

Optional Retirement Program (ORP) Membership is available to the following employees who are eligible for membership in TSERS and make a one-time decision to join the Optional Retirement Program (ORP) instead of TSERS:; Employees of The University of North Carolina and The University of North Carolina Health Care System

A TSERS retiree interested in employment in an ORP eligible position must follow the same rules when it comes to reemployment in ORP including the six months break in service and earnings allowance. So, if you are considering working in an ORP position as a TSERS retiree remember the position requires membership and your TSERS retirement benefit will be suspended until you retire again from ORP.

Peak Retirement Season

Don’t wait until the last minute! Do you have employees gearing up for retirement?

Retirement Processing is first-in, first out.

We recommend applying as early as possible to ensure the application is processed for that first retirement pay day. A prospective retiree can apply for retirement up to 120 days prior to their scheduled retirement date. For more information, click here.

Please encourage Retirement Online. This application can be accessed in ORBIT and is a guided process. Retirement Online allows for steps to be completed and confirmed online, including steps required by employers.

SECURE 2.0 Act Changes

Enacted on December 29, 2022, the SECURE 2.0 Act makes important changes to retirement plan coverage and features. Here are two of the new provisions affecting the NC Supplemental Retirement Plans (NC 401(k) Plan and NC 457 Plan) that you need to know about now.

Required Minimum Distribution Age: The age for the Required Minimum Distribution (RMD) has been raised from 72 to 73, starting January 1, 2023. It will also increase to age 75 in 2033.

The “First Day of the Month” Requirement for Governmental Section 457(b) Plans—Eliminated: Previously, participants in governmental 457(b) plans must have requested changes in their deferral rate prior to the beginning of the month in which the deferral was made. Now, under current law, such elections may be made at any time prior to the date that the compensation is deferred.

Eligibility for Long-Term Part-Time Employees: The original SECURE Act expanded 401(k) plan eligibility for part-time workers. Part-time employees who work at least 500 hours per year for three consecutive years, starting on January 1, 2021, are eligible to participate in the NC 401(k) Plans. While the earliest that a part-time employee could begin participating in the NC 401(k) Plan is January 1, 2024, participating employers in the NC 401(k) Plan must begin tracking the hours of their part-time employees – and retaining records of those hours for at least three years – beginning January 1, 2021.

SECURE Act 2.0 further expanded eligibility for part-time employees. Beginning in 2025, part-time employees who have worked two consecutive years and completed at least 500 hours of service each year will be eligible to enroll in the NC 401(k) Plan. 

We will continue to provide additional information on the implementation of SECURE 2.0 requirements and more details around the SECURE 2.0 Act can be found here.

If you have specific questions about implementing these changes for your employees, you can reach out to the NC Plans Service Team by calling 866NCPlans (866-627-5267), or by email at NCPlans@empower.com. You can also get in touch with your dedicated Empower Retirement Education Counselor; click here to find your counselor and their contact information.

'Understanding Your Medical Plan Options When You Become Medicare-Eligible' Webinars Scheduled through August!

The State Health Plan is again offering online webinars with important information on “Understanding Your Medical Plan Options When You Become Medicare-Eligible.”

These popular, free webinars are designed for active employees who will soon be 65, are already 65 or older, and retirees getting ready to turn 65. Each webinar lasts approximately 2 hours and will explain important information regarding Medicare, your retirement health benefit options and offer the opportunity to ask questions.

Webinars are scheduled through August. If you haven’t already, register soon, as these webinars are expected to fill quickly! To register, visit the State Health Plan website.

Please note: A limited number of in-person sessions are also in the planning stages. Stay tuned for more information.