LGERS Discontinued Service Retirement Frequently Asked Questions What is Discontinued Service Retirement? Discontinued Service Retirement allows an eligible employee who is separated from service due to a reduction in force to: receive an unreduced discontinued service retirement benefit if he/she is at least 55 years of age with 20 or more years of creditable service, or receive a reduced benefit* if he/she is at least age 50 (but less than 55 years of age) with 20 or more years of creditable service. *Reduced by ¼ of 1% for each month that a retirement precedes a member's 55th birthday Am I eligible to receive a retirement benefit while receiving severance pay? It may be possible for you to receive severance and a retirement benefit at the same time depending on the local unit’s severance pay policy. Refer to the local unit’s employer policy on severance pay. If I am reduced in force and decide to apply for retirement benefits following the end of severance/salary continuation payments, when should I complete an application to retire? If you are no longer working in a position covered by the Retirement System, as a general rule you should apply for your monthly benefit as soon as you become eligible, whether you will be in receipt of an unreduced service retirement allowance or early, reduced benefits. Historically, post-retirement benefit increases have significantly reduced, or completely eliminated, the difference between the amount of your benefit should you begin reduced benefits as soon as possible as opposed to delaying the payment of your benefits until a later date. Monthly retirement benefits are effective the first day of any month; however, a retirement application must be signed, dated, and filed at least one day and not more than 120 days prior to the effective date of retirement. Approximately 90 to 120 days before your planned retirement date, you should complete a Form 6, “Claiming Your Monthly Retirement Benefit.” Please see the guides on Form 6 for additional detailed information about the retirement process. The form is available on the ORBIT website. If I am reduced in force and elect to retire, will health insurance coverage continue? An employee who retires may be eligible for State Health Plan coverage if the local unit is a participating employer, or if the local unit offers separate health insurance for employees who are reduced in force. Refer to the local unit’s health insurance plan policy. If I am reduced in force and apply for retirement, do the same “Return-to-Work” laws apply to me that apply to any other retiree? Yes. LGERS return-to-work laws apply to anyone who has retired and then returns to work with an LGERS employer. For LGERS, a one-month break from any type of service with an LGERS employer is required and certain earning limits apply. Refer to the LGERS Handbook for detailed information. If I participate in the NC 401(k) or NC Deferred Compensation (457) Plans, what options do I have if I am reduced in force? You should contact Prudential Retirement, the NC 401(k) and NC 457 plans’ administrator, for information about leaving contributions in the account, transfers/rollovers, distributions, and tax implications. Website: www.ncplans.prudential.com E-mail: NCPlans@prudential.com Phone: 1-866-627-5267 (1-866-NCPLANS) Link to the websites below for more information: The LGERS Handbook regarding the NC 401(k) and NC 457 Transfer Benefit Prudential Retirement's "Plan Comparison Document," which outlines options for supplemental retirement account(s) If I am reduced in force and retire, am I eligible to continue group coverage or is there other supplemental insurance available? If you are enrolled in an employer-sponsored insurance plan, you should consult with your employer/insurance carrier regarding continuation of coverage following separation from service. Is retirement deducted from severance pay? No. Retirement contributions are not deducted from severance pay. Should I withdraw my retirement contributions or leave them in my account if I am reduced in force? If you separated from service for any reason other than retirement or death, then you may either leave your contributions in the System and retain all of the creditable service earned to date, or receive a refund of contributions. If you are vested (have five or more years of Retirement System creditable service), and you leave the System before you are eligible to receive a service or early retirement, you may receive a deferred benefit at a later date provided you have not received a refund of contributions. You waive rights to any Retirement System benefits if you receive a refund of contributions. What happens to my vacation leave balance if I am reduced in force and elect to retire? Unused vacation leave may be paid out in accordance with your agency's existing personnel policies. If you retire and your four highest-paid years in a row include a final payment for unused vacation leave, your average final compensation may be increased by the extra payment(s). What happens to my sick leave balance if I am reduced in force (laid off)? Refer to your local unit's policy on sick leave.