TSERS Handbook
Welcome to the Teachers' and State Employees' Retirement System
The Teachers’ and State Employees’ Retirement System (TSERS) 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 TSERS benefit eligibility requirements and the formula used to calculate benefits.
You, the state of North Carolina and the investment earnings on total contributions pay the cost of providing your retirement benefits.
Your share of the cost is currently six percent of your compensation, 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 the state.
The state bases its contributions on calculations prepared by an actuary.
Since July 1, 1982, 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 TSERS 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.
