CBBC Impact Calculation

This form is for informational purposes only and should not be used for budgeting and accounting.  Contact the Retirement Systems Division for a formal estimate.

What you need to estimate the impact of a CBBC:

  • 1

    Verify Membership

    • Did the member join the retirement system before Jan. 1, 2015? 
      OR
    • Did the member join the retirement system after Jan. 1, 2015, and has less than five years of service?

    If the answer is no to either of these, the following instructions are not applicable.

    If the answer is yes, continue to follow the steps below.

  • 2

    Members' age at retirement

    Round the member's age at retirement and then use this number to find the corresponding factor on the CBBC Annuity Factors table.

    Accordion
    Tab/Accordion Items

    CBBC Annuity Factor Table
    AgeFactorAgeFactorAgeFactorAgeFactor
    1815.57763814.85735812.7773788.0069
    1915.55843914.79585912.6197797.6896
    2015.53804014.73056012.4547807.3690
    2115.51624114.66156112.2819817.0463
    2215.49294214.58826212.1009826.7234
    2315.46794314.51056311.9114836.4017
    2415.44114414.42816411.7129846.0834
    2515.41264514.34116511.5051855.7702
    2615.38234614.24906611.2878865.4639
    2715.35044714.15146711.0613875.1656
    2815.31664814.04826810.8255884.8771
    2915.28104913.94076910.3265894.5995
    3015.24345013.82727010.3265904.3341
    3115.20385113.71557110.0635914.0818
    3215.16205213.5981729.7920923.8418
    3315.11795313.4747739.5122933.6145
    3415.07145413.3451749.2246943.3993
    3515.02225513.2091758.9296953.1949
    3614.97035613.0717768.6277  
    3714.91545712.9279778.3199  

    Click here to download the CBBC Annuity Factors Table (pdf).

  • 3

    Member's average final compensation (AFC)

    Estimate the AFC, including any additional payments that are reported as compensation to the Retirement Systems (where member and employer contributions are made), such as terminal payments.

    If the AFC is less than the threshold, there is no CBBC impact.

    Accordion
    Tab/Accordion Items

    An average final compensation (AFC) of $100,000 or more (adjusted annually for inflation), means a member may fall under a contribution-based benefit cap. The AFC for 2024 is $130,764.73.

    View AFC for TSERS

    View AFC for LGERS

  • 4

    What to include in CBBC membership service

    CBBC membership service does not include:

    • purchased service
    • military service
    • noncontributory service (e.g., while receiving DIPNC benefits)

    CBBC membership service does include:

    • projected service if working until the effective retirement date
    • omitted service and contribution purchases
    • transferred service from another retirement system
    • the first retirement if the second retirement is three or more years of service
  • 5

    Determine the early retirement factor (if applicable)

    Use the member’s age and expected creditable service on the effective retirement date to determine any reduction in benefits due to receiving an early retirement allowance.

    NOTE: Creditable service includes membership service, purchased service, and noncontributory service, including creditable service associated with accrued unused sick leave at retirement. The employer may need the employee to provide some of this information.

    Accordion
    Tab/Accordion Items

  • 6

    Determine total accumulated contributions

    • Include projected contributions if working until the effective retirement date
    • Include interest accumulated at 4% per year up to the effective retirement date. Partial interest is credited for the year of retirement (e.g., 2% for July 1 retirement).
  • 7

    Retirement System CBBC Factor

    • TSERS
      • CBBC Factor - 4.5
      • Retirement Factor - 1.82%
         
    • LGERS
      • CBBC Factor - 4.7
      • Retirement Factor - 1.85%

Calculations

Benefit Formula

If the AFC meets or exceeds the threshold, calculate the amount of the retirement allowance that results from the member's membership service:

Average Final Compensation (AFC)
x
Retirement Factor
x
CBBC Membership Service

Then, multiply by the early retirement factor (if applicable).

 

The result is the retirement benefit amount the member would receive on an annual basis under the maximum allowance payment option, derived only from their membership service (not other types of creditable service).

 
CBBC Formula

Calculate the actuarial equivalent of the benefit amount based on the accumulated contributions and service, adjusted for the age of the member at the time of retirement:

Total Accumulated Contributions  ÷  Annuity Factor
x
CBBC Factor

 
CBBC Contribution Amount

If the Benefit Formula exceeds the CBBC formula, find the difference and multiply it by the Annuity Factor. The result is the amount of the required additional contribution associated with the benefit amount in excess of the Contribution-Based Benefit Cap.

Benefit Formula Result   -  CBBC Formula Result
x
Annuity Factor
=
CBBC Contribution Estimated Amount

 

Return to CBBC information page

 

 

DISCLAIMER: The information provided here is intended to serve as a general resource for estimating the potential impact of the Contribution-Based Benefit Cap provisions established in North Carolina General Statutes §§ 128‑27(a3) and 135-5(a3). While the information is intended to be as accurate as possible, it is subject to the detailed provisions of the North Carolina General Statutes. The information cannot alter, modify, or otherwise change the controlling legal documents or North Carolina General Statutes in any way, nor can any right accrue by reason of any information provided or omission of information provided herein.