LGERS Handbook
The Local Governmental Employees’ Retirement System (LGERS) is a defined benefit plan qualified under Section 401(a) of the Internal Revenue Code. Defined benefit plans use a formula to calculate monthly retirement benefits once eligibility requirements have been met. This handbook explains LGERS benefit eligibility requirements and the formula used to calculate benefits.
You, your employer and the investment earnings on total contributions pay the cost of providing your retirement benefits. You currently contribute 6 percent of your compensation to the Pension Plan, and it is automatically deducted from your paycheck. Your compensation includes all eligible salaries and wages, as defined by statute, paid to you from public funds, earned at your covered job while working for your employer.
Your employer’s share of the cost is based on calculations prepared by an actuary.
Beginning July 1, 1982, if your employer adopted a resolution to have your contributions made on a before-tax basis, your contributions have been tax deferred. This means your contributions are deducted from your pay before taxes are calculated, and you pay taxes on them when you begin receiving monthly retirement benefits or if you elect a refund of your contributions. This is a benefit to you because your current taxable income is lowered and the amount of annual taxes you pay is less than if you made contributions after paying taxes.
Contributions to LGERS are invested by the Department of State Treasurer and these funds are protected by the Constitution of North Carolina from being used for any purpose other than retirement system benefits and expenses.
