In 2021, the General Assembly made several changes that affect the Retirement Systems. Below is a brief explanation of some of the changes with a link to the passed legislation. A list of all legislation that impacts the Retirement Systems Division, including minor technical corrections and member-related changes, can be found here.
One very significant development was the enactment of Senate Bill 105, a State budget bill for the 2021-2023 biennium, the State’s first comprehensive budget law since 2018. Senate Bill 105 was approved by both chambers of the General Assembly in November, and Governor Roy Cooper signed it into law on November 18, 2021. House Bill 334, making technical corrections to Senate Bill 105, was signed into law on December 6, 2021.
Employer Contribution Rates for Retirement, Health, and Related Benefits
S.L. 2021-180, Section 39.22.(b) for FY 2021-2022, and Section 39.22.(c) for FY 2022-2023
- There are two sets of contribution rates for Fiscal Year 2021-2022. The rates effective July through December 2021 are the same that were in effect June 30, 2021.
- The rates effective January through June 2022 are the rates certified by OSBM on November 29, 2021, so that the effective rates for the entire Fiscal Year 2021-2022 reflect the rates set in Section 39.22 of Senate Bill 105.
Supplemental Payments to State, Judicial, and Legislative Retirees
S.L. 2021-180, Section 39.23
This provides two supplemental payments. The first was equal to 2% of the annual retirement allowance, paid in December 2021 to monthly payees on record as of September 2021. The second will be equal to 3% of the annual retirement allowance, to be paid by October 2022 to monthly payees on record as of September 2022.
Effective January 1, 2023, the terms of certain purchases of service under Teachers’ & State Employees’ Retirement System (TSERS), Local Governmental Employees’ Retirement System (LGERS), and the Consolidated Judicial Retirement System (CJRS) are standardized more closely with the requirements for other types of service purchases.
The affected types of purchase include:
certain pre-membership service with a charter school,
service in the General Assembly not creditable under any of the systems,
retroactive membership service,
service for which an LGERS member signed a non-election form,
CJRS credits purchased for work as a Judge, District Attorney, or Clerk of Superior Court, and
CJRS credits purchased for State, Local, or certain Federal service.
Effective July 1, 2022, duplicative or no-longer-necessary service purchase provisions under TSERS and LGERS are repealed.
View S.L. 2021-57.
Amends LGERS to provide that any Alcohol Control Board that is not already a participating employer in LGERS as of June 30, 2021, is not eligible to participate in LGERS.
Section 36.2 - Modifies the statute for the Line of Duty death benefit program determined by the Industrial Commission and paid by RSD (G.S. 143-166.2) to expand the definition of “killed in the line of duty” to include firefighters who die from oral cavity cancer or pharynx cancer.
View Senate Bill 105.
Amends the CBBC provisions of TSERS and LGERS and institutes policies related to the CBBC.
Adds option for employers to pay contributions over 12-year period when a contribution is required.
Makes several technical corrections to eliminate or reduce the contribution that is due in certain limited circumstances.
Institutes a one-year moratorium on legal actions filed by boards of education against the Department related to contribution assessments, while tolling any statute of limitations.
Requires working group between the Department and the N.C. School Boards Association to review the related provisions.
Section 2 - Clarifies that if an employing unit undergoes certain changes that make it ineligible under Federal law for participation in the Retirement System, the statutory process for withdrawing from the Retirement Systems applies to that employing unit, including payment of withdrawal liability.
Section 4 - Clarifies that to offer this type of buyout and pay it directly to the Retirement System, the employer must have adopted a written policy that does not allow employees to choose between taking the buyout as a lump sum or transferring it to the Retirement System.
Section 6. A member of the UNC Optional Retirement Program who owes funds to the Disability Income Plan of North Carolina (DIPNC) must repay the funds or enter into a payment plan approved by the Retirement System within six months of the date they would have qualified for a full-service retirement had they been a member of TSERS. Otherwise, the individual will not be able to enroll in a new year of coverage under the State Health Plan.
Includes provisions related to LGERS, along with other provisions not affecting the Retirement Systems
Section 1 - Effective December 1, 2021, prevents employers who participate in LGERS from imposing a waiting period on employees who are eligible to become members of LGERS.
Section 3 - Effective November 10, 2021, permits the LGERS Board to grant a one-time pension supplement to its members in a given year if a permanent increase in benefits is not paid that year and there are sufficient funds in LGERS to pay for the supplement.