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, if you participate in TSERS or LGERS, then your employees who are members of TSERS or LGERS are also eligible to cave in 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 ae 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.