Retirement Monitor - December 2024

Table of Contents

• Mandatory Employer Reporting Changes Effective Jan. 1, 2025
• Employer Payroll Reporting
• Agency Updates for Contact & Banking Information
• 2025 Annual Limits for Retirement Systems Compensation
• Employer Requirements for Return-to-Work
• NC 401(k)/NC 457 Plans - 2025 Contribution Limits Increase
• Expanded Eligibility for the NC 401(k) Plan
• Ongoing Retirement Systems' Webinars and Events

• SHP Webinar Updates

   

Starting Jan. 1, 2025, state law requires contributions and reporting be submitted on or before the 5th business day of the month in order to be considered complete and avoid a penalty. 

On June 20, Governor Cooper signed HB 1020. Part 3 requires monthly both contributions and reporting be submitted by the employer on or before the 5th business day of the month in order to be considered complete and avoid a penalty. Employee and employer contributions and reporting are not considered submitted until all of the required information is received by the Retirement Systems Division. 

This is a mandatory change, and we suggest preparing now to avoid penalties. Thank you for all you do and proactively preparing for this important change.

The schedule for CSI Contributions through 2025 is posted here. 

Employer Payroll Reporting

Your first point of contact is your assigned Employer Reporting Specialist, rather than the Orbit Employer Reporting OER@nctreasurer.com mailbox for:

• Payroll Reporting or Payroll error corrections
• Employee Demographic changes (legible copies of Social Security card, Driver’s License, Passport or other Government issued ID that verify the changed information).
• Form ERRWK or Form 316 (all other Forms email to MemberRecords@nctreasurer.com)
• Please contact your assigned Employer Reporting Specialist (who sends your Agency Payroll Error report) directly to their email address or phone 919-814-4590 (please listen to the options as they are subject to change and select Employer Reporting). 

The new Form CONCHG (Agency Contact Information) and Form 717 (Agency Banking Information) will ensure security, efficiency, and consistency for updating Agency Contact and Banking Information changes by collecting the same information from each Agency on an easy-to-complete form.  

Upon receipt, the form will be processed and will result in an acknowledgement email to confirm the changes to the Agency.  

The new Form CONCHG-Employer Contact Update Request & Form 717-Employer Bank Change Request are now available here. 

Federal and state legal limitations on annual compensation for employees in pension plans apply to several North Carolina retirement plans, including the Teachers’ and State Employees’ Retirement System (TSERS), Local Governmental Employees’ Retirement System (LGERS), Consolidated Judicial Retirement System (CJRS), and Optional Retirement Program (ORP). The limitations may be adjusted from year to year according to Section 401(a)(17) of the Internal Revenue Code. The limitations for calendar (tax) year 2025 are as follows:

• For any member of TSERS, LGERS or CJRS who was hired before January 1, 1996, or an ORP member hired before July 1, 1996, the annual limit on compensation subject to retirement contributions is $520,000 for calendar (tax) year 2025. 
• For any employee hired on and after January 1, 1996, who is a member or becomes a member of TSERS, LGERS, or CJRS, or an ORP member hired on or after July 1, 1996, the annual limit on compensation subject to retirement contributions is $350,000 for calendar (tax) year 2025.

Since an employee’s membership service is credited based on the months when contributions are received by the retirement system, the employer needs to follow certain steps to ensure that a highly compensated employee receives retirement credit for each month of service after exceeding the annual limit.

Reporting TSERS members:

• Should be reported through ORBIT Payroll Reporting under the STG plan code from the beginning of the year to the month the member exceeds the annual limit. 
• In the month after the member exceeds the limit, the employee should be reported as STMAX. 
• If the member exceeds the limit in the middle of a month, the monthly salary should be reported as two separate records, one under STG and one under STMAX. The pay period for that month should also be split between the two plan code records. 
• When reporting under STMAX, the salary should be included but no contributions should be reported. Membership service credit is accrued under both plan codes.

Reporting LGERS Members:

• Should be reported through ORBIT Payroll Reporting under the LOCG plan code from the beginning of the year to the month the member exceeds the annual limit. 
• In the month after the member exceeds the limit, the employee should be reported as LOCMAX. 
• If the member exceeds the limit in the middle of a month, the monthly salary should be reported as two separate records, one under LOCG and one under LOCMAX. The pay period for that month should also be split between the two plan code records. 
• When reporting under LOCMAX, the salary should be included but no contributions should be reported. Membership service credit is accrued under both plan codes.

Reporting ORP Members:

• Should be reported through ORBIT Payroll Reporting under the ORPG plan code from the beginning of the year to the month the member exceeds the annual limit. 
• In the month after the member exceeds the limit, the employee should be reported as ORPMAX. 
• If the member exceeds the limit in the middle of a month, the monthly salary should be reported as two separate records, one under ORPG and one under ORPMAX. The pay period for that month should also be split between the two plan code records. 
• When reporting under ORPMAX, the salary should be included but no contributions should be reported. Membership service credit is accrued under both plan codes.

If you have any questions regarding employer reporting, please contact the ORBIT Payroll & Reporting Section by e-mail at OER@nctreasurer.com or by phone at 919-814-4590. 

Effective in 2009, the General Assembly authorized House Bill 642, requiring employers to report all rehired retirees to the Retirement System each month. To assist employers in reporting all rehired retirees and therefore avoiding penalties, the Retirement System offers an online user-friendly procedure to certify employee status under the retirement reemployment laws. To use this tool, you should:

1. Access the ORBIT Employer Self-Service page.
2. Under “Reporting” click “Check Retired Status.”
3. Here you are able to upload a list of employee social security numbers which will be run against the Retirement System retiree list to generate a report of members who are actively receiving a benefit from TSERS or LGERS.

Important Points to Remember:

• Rehired retirees should be reported in ORBIT monthly.
• Reports should include the appropriate pay period, pay type, plan code and all other applicable fields.
• Reports must be received by the Retirement System within 90 days of the end of each month in which a beneficiary is reemployed, otherwise the Retirement System is required to assess a 10% penalty of the compensation of the unreported reemployed retirees during the months the employer did not report the reemployed retirees, with a minimum penalty of $25. 

The Retirement Systems appreciate your important role in helping us provide accurate information to active members and retirees.

Updates to the Return-to-Work Laws Web Page

We have recently updated the Return-to-Work Laws web page. This guidance relates to situations where retirees come back to perform work for an employer in the same Retirement System under which they retired.

The guidance on this web page is intended for both employers and retirees. The digital employer manual is another resource for employers, and the digital member handbook is another resource for retirees.

The updated guidance is not because of any change in laws, nor does it reflect any change in the Retirement Systems’ understanding of how the laws apply. Rather, it is intended to place more focus on the specific types of questions that we often receive from retirees and employers.

We encourage employers to be familiar with the requirements – in the interest of all the retirees of our systems who may consider returning to employment. If you have questions about the return-to-work laws, please contact the Retirement Systems.

SECURE 2.0 update – ‘super’ catch-up contribution limit for ages 60-63 The IRS limits the amount you can save each year, and participants over age 50 can contribute more through catch-up contributions. And now, those turning the ages of 60 to 63 can save even more. Starting January 1, 2025, each year in which you turn ages 60, 61, 62 or 63, you can save an extra $11,250 in catch-up contributions. This is called the “super” catch-up contribution. However, the year in which you turn 64, the super catch-up contribution ends, and the standard catch-up limit resumes.

For each Plan: NC 401(k) and NC 4571,2 Max. Contribution Standard Contributions $23,500 Catch-up Contributions (50 or older) $7,500 Super catch-up ages 60 - 63 $11,250 NC 457 Plan Specifically2 Three-Year Catch-up Contributions $47,000 Participating in BOTH the NC 401(k) AND 457 Plans1,2 Standard Contributions $47,000 Catch-up Contributions (50 or older) $15,000 Super catch-up ages 60 - 63 $22,500.

The NC 401(k) Plan has expanded its eligibility requirements. Beginning January 1, for the first time, both full-time and part-time public servants can now participate in the NC 401(k) Plan.

The passing of House Bill 1020 promotes retirement readiness, assists employers with hiring and retention incentives and allows more state and local governmental employees to save for retirement. 
Part-time and full-time public servants, as well as re-hired employees who do not contribute to the Teachers’ and State Employees’ Retirement System (TSERS) or Local Governmental Employees’ Retirement System (LGERS) now have expanded access to the NC 401(k) Plan. This provides more opportunities to save for retirement if their employer has one or more employees eligible for the Plan.  

Part VII of House Bill 1020 brings eligibility for the NC 401(k) Plan in line with the NC 457 Plan. Beginning January 1, 2025, all employees, whether full-time or part-time, of the following types of employers are now eligible for the NC 401(k) Plan:

1. If you are an employer that already has some employees who are eligible for the NC 401(k) Plan, then all of your employees will become eligible for the NC 401(k) Plan on January 1. For example, currently if you participate in TSERS or LGERS, then your employees who are members of TSERS or LGERS are also eligible to have the NC 401(k) Plan. Your employees who are ineligible for TSERS or LGERS, such as part-time employees, cannot participate in the NC 401(k) Plan, but thanks to House Bill 1020, these currently ineligible employees will have access to the NC 401(k) Plan beginning January 1. 
2. If you do not have any employees who are eligible for the NC 401(k) Plan, beginning January 1, you will have the option to provide access to the NC 401(k) Plan to all of your employees. For example, if you are a local government that does not participate in LGERS or otherwise offer a defined benefit pension, you can elect to participate in the NC 401(k) Plan, which will allow all of your employees to save in the plan.

For more information, visit myNCPlans.com.   

Discover upcoming Retirement Systems webinars and events. Registration is required.

View Calendar 

'Understanding Your Medical Plan Options When You Become Medicare-Eligible' Upcoming Webinar!   The State Health Plan’s (Plan) will be hosting one last “Understanding Your Medical Plan Options When You Become Medicare-Eligible” webinar of 2024 on December 10 at 2p.m. These popular, free webinars are designed for active members who will soon be 65, are already 65 or older, and retirees getting ready to turn 65. Each event lasts approximately 2 hours and will explain important information regarding Medicare, retirement health benefit options and offer the opportunity to ask questions. Encourage your employees in the above categories to register!