2022 Legislation

Report on 2022 State Legislative Actions Affecting Retirement and Health Benefits

On July 11, 2022, Governor Roy Cooper signed House Bill 103, the 2022 Appropriations Act, adjusting the budget for the second year of the biennium budget enacted in 2021. The new law contains provisions impacting the Retirement Systems and the State Health Plan.

Increased Supplemental Payments to State, Judicial and Legislative Retirees

(Section 39.19) A one-time supplemental payment will be issued in October 2022 to monthly payees on record as of September 2022 and will be equal to 4% of the annual retirement allowance. The annual allowance is calculated based on 12 times the monthly allowance that was payable for September 2022. This is an increase of 1% from the 3% one-time supplemental payment already budgeted for 2022.

Employer Contribution Rates

(Section 39.20) Effective July 1, 2022, the Employer Contribution Rates for TSERS, CJRS and LRS are increased to cover the additional 1% one-time supplemental payment increase for retirees and benefit recipients. Please see the TSERS Employer Manual and Employer Retirement Monitor for the new rate tables.

Teacher Bonuses

There are provisions for bonuses that are not considered retirement-eligible compensation.

(Section 7A.2) Teacher bonus based on student growth.
(Section 7A.3) Small-county and low-wealth signing bonus for teachers.
(Section 7A.5) Principal bonus based on school growth.

Mitigate Bonus Leave

(Section 39.18) During the 2022-2023 fiscal year, this section allows State agencies, departments, institutions, the North Carolina Community College System, and The University of North Carolina to offer State employees the opportunity to use or to cash in special bonus leave benefits that have accrued pursuant to Section 28.3A of S.L. 2002-126, Section 30.12B(a) of S.L. 2003-284, Section 29.14A of S.L. 2005-276, and Section 35.10A of S.L. 2014-100, subject to certain conditions.

*It is important to note that the payout of bonus leave earned under these 2002 – 2014 laws would have counted as compensation for TSERS purposes, and the ability to "cash in" earlier will not change the fact that it counts as compensation. Therefore, any member who elects to "cash in" their bonus leave should have the amount count as compensation, however, doing so may affect whether the payout will be included in the AFC period.

Anti-Pension Spiking Moratorium

Signed July 8, 2022, House Bill 177 / SL 2022-70 (2021-2022 Session) extends the moratorium on lawsuits filed by school boards related to pension spiking or the Contribution-Based Benefit Cap (CBBC) through June 30, 2023.

Treatment of Inactive Employers

House Bill 1056 (Section 2.1) states that employers under TSERS and LGERS automatically become "inactive" if they have not reported any qualifying employees for at least six consecutive months. On October 1 of each calendar year, inactive employers, who have not had their inactive status extended by the Board, will cease participation in the Retirement System and be subject to the withdrawal liability. These provisions are effective December 31, 2022.