CHAPTER 2 – RETIREMENT SYSTEMS

 

SUBCHAPTER 2A - DIVISIONAL RULES

 

SECTION .0100 - organizational rules

 

20 NCAC 02A .0101         ORGANIZATION: AUTHORITY

The retirement systems division provides the staffing for the administration of the following agencies.  The agencies and the statutory authority of each are:

(1)           Teachers' and State Employees' Retirement System of North Carolina ‑‑ G.S. 135, Article 1;

(2)           North Carolina Local Governmental Employees' Retirement System ‑‑ G.S. 128, Article 3;

(3)           Public Employees' Social Security Agency ‑‑ G.S. 135, Article 2;

(4)           Legislative Retirement System of North Carolina ‑‑ G.S. 120‑4, Article 1A;

(5)           Consolidated Judicial Retirement System of N.C. ‑‑ G.S. 135, Article 4;

(6)           Supplemental Retirement Income Plan of North Carolina  ‑‑ G.S. 135, Article 5;

(7)           Disability Income Plan of North Carolina ‑‑ G.S. 135, Article 6;

(8)           Firemen's and Rescue Squad Workers' Pension Fund ‑‑ G.S. 58, Article 86;

(9)           Register of Deeds' Supplemental Pension Fund ‑‑ G.S. 161, Article 3.

 

History Note:        Authority G.S. 128‑28(g); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. October 1, 1993; August 1, 1988; April 1, 1985; October 1, 1983.

 

20 NCAC 02A .0102         EXERCISE OF AUTHORITY

All of the above named agencies, with the exception of the N.C. Public Employees' Social Security Agency, exercise their prescribed statutory powers independently of the State Treasurer.  However, those functions such as planning, organizing, staffing, directing, coordinating, reporting and budgeting are performed under the direction and supervision of the State Treasurer.  In the case of the N.C. Public Employees' Social Security Agency, all its prescribed statutory authority, powers, duties and functions, including rule‑making, are vested in the State Treasurer.

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. October 29, 1979.

 

20 NCAC 02A .0103         DELEGATION OF AUTHORITY TO DIRECTOR

Whenever the statutes specify that the board of trustees itself will make specific findings in specific matters relating to specific persons, the director may make the decisions administratively in accordance with law and the rules, regulations and previous decisions of this board.  Appeals may be made from the decision of the director under the same procedures used for contested cases.

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. September 21, 1977;

Amended Eff. October 29, 1979.

 

20 NCAC 02A .0104         EXERCISE OF EMPLOYER OPTIONS

No election of an optional element of a retirement system shall be considered effective by the retirement system unless a duly certified copy of the minutes of the governing board of the employer is received and the terms under which the option is elected do not discriminate in favor of the more highly compensated employees.

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. November 9, 1979.

 

20 NCAC 02A .0105         REPAYMENT FOR RIGHT TO RETIRE

(a)  This Rule applies to any former member of a retirement system who was in service on October 8, 1981 and was then of the appropriate age to be eligible to retire with a service retirement allowance, and who applied for a return of accumulated contributions from that retirement system prior to July 15, 1983.

(b)  Eligibility to commence receiving a service retirement allowance, under all other statutory conditions, may be restored by the payment of an amount by the former member to the retirement system.

(c)  The amount payable by the former member is calculated as follows:

(1)           the amount of accumulated contributions withdrawn, multiplied by;

(2)           a factory equivalent to an interest rate of six and one‑half percent compounded annually from year of withdrawal to year of payment.

 

History Note:        Authority G.S. 128‑27(a)(4); 128‑28(g); 135‑5(a)(3); 135‑6(f); 135‑57(d);

Eff. December 1, 1983.

 

SECTION .0200 ‑ RULE‑MAKING PROCEDURES

 

20 NCAC 02A .0201         ESTABLISHMENT OF PROCEDURAL RIGHTS

The rules in 20 NCAC 1F .0100 establish rule‑making procedures for the Retirement Systems Division.  All correspondence with the Retirement Systems Division shall be addressed to:

Director of the Retirement Systems

Albemarle Building

325 North Salisbury Street

Raleigh, North Carolina  27603.

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. October 1, 1993; October 29, 1979.

 

20 NCAC 02A .0202         DEFINITIONS

The following definitions apply to rule‑making in 20 NCAC 1F .0100:

(1)           The "Division" is the Retirement Systems Division and includes the agencies enumerated in 20 NCAC 2A .0101.

(2)           The "Chief Officer" is the Director of the Retirement Systems.

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. October 1, 1993; October 29, 1979.

 

SECTION .0300 ‑ DECLARATORY RULINGS

 

 

20 NCAC 02A .0301         ESTABLISHMENT OF PROCEDURAL RIGHTS

The rules in 20 NCAC 1F .0200 establish declaratory ruling procedures for the Retirement Systems Division.

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. October 1, 1993.

 

20 NCAC 02A .0302         DEFINITIONS

The following definitions apply to declaratory rulings in 20 NCAC 1F .0200:

(1)           The "Division" is the Retirement Systems Division;

(2)           The "Chief Officer" is the Director of the Retirement Systems.

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. October 1, 1993.

 

20 NCAC 02A .0303         RECONSIDERATION OF DECLARATORY RULINGS

(a)  Whenever the director of the retirement systems has issued a declaratory ruling pursuant to this Section, the petitioner may, at his option, request that the ruling be reconsidered by the appropriate governing board in a letter mailed or delivered to the director of the retirement systems within 10 days of the receipt of such declaratory ruling.  In the event the petitioner requests reconsideration by the appropriate governing board, the petitioner shall be entitled to appear concerning the ruling before the appropriate governing board at a regularly scheduled meeting.  The governing board in question shall reconsider the ruling and may readopt the same ruling or adopt a different ruling.

(b)  In the event the petitioner does not request reconsideration by the appropriate governing board as provided in (a) of this Rule, the declaratory ruling issued by the director of the retirement systems shall be considered the final declaratory ruling of the said governing board.

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. October 29, 1979.

 

SECTION .0400 ‑ CONTESTED CASE PROCEDURES

 

 

20 NCAC 02A .0401         ESTABLISHMENT OF PROCEDURAL RIGHTS

The rules in 20 NCAC 1F .0300 establish contested case procedures for the Retirement Systems Division, with following amendments:

(1)           Informal resolution of the problem begins when a person calls, writes, or visits the state retirement system's office and describes the problem to a counselor/field representative;

(2)           If the problem is not resolved during this initial contact, the person will be referred to the administrator of the appropriate section;

(3)           If the problem is not resolved at this level, the person may discuss it with the Assistant Director of the Retirement Systems;

(4)           If the aggrieved person is dissatisfied at this point, he may discuss his difficulty with the Director of the Retirement Systems.

 

History Note:        Authority G.S. 150B‑23; 135‑6(f); 128‑28(g);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. October 1, 1993.

 

20 NCAC 02A .0402         DEFINITIONS

The following definitions apply to the contested case procedures in 20 NCAC 1F .0300:

(1)           The "Division" is the Retirement Systems Division;

(2)           The "Chief Officer" is the Director of the Retirement Systems;

(3)           The "Appropriate Board" is either the Board of Trustees of the Teachers' and State Employees' Retirement System or the Board of Trustees of the Local Governmental Employees' Retirement System or the Board of Trustees of the Firemen's and Rescue Squad Workers' Pension Fund.

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. October 1, 1993; October 1, 1983; October 29, 1979.

 

20 NCAC 02A .0403         HEARING OFFICERS

The director shall appoint the hearing officers.

 

History Note:        Authority G.S. 128‑28(f); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. December 1, 1982.

 

SECTION .0500 ‑ GENERAL PROCEDURES

 

 

20 NCAC 02A .0501         GENERAL GUIDELINES

20 NCAC 02A .0502         RETIRING PROCEDURES

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. October 29, 1979;

Repealed Eff. March 1, 1985.

 

20 NCAC 02A .0503         DUAL MEMBERSHIP ‑ COMPUTATION OF SERVICE AND BENEFITS

(a)  This Rule applies to any individual case in which the member had one or more periods of dual membership in those rare cases which are permitted by law.  Dual membership means membership in two systems, at the same time, by virtue of the same position.

(b)  Eligibility shall be established for the death benefit, survivor's alternate benefit, service, early or disability retirement or other benefits which are based on creditable membership service for both systems whenever eligibility is established in either one of the systems.

(c)  A statute permitting transfer of membership and prior service shall apply when a person becomes a member of a retirement system to which the membership and prior service may be transferred from one or the other of the systems in which the member had dual membership.  This shall apply only where the member is paid under only one retirement system for services rendered subsequent to the last day of service in a position in which the member had dual membership.

(d)  Death benefit shall be limited to twenty thousand dollars ($20,000) and shall be allocated pro rata between systems based on the total compensation paid during the eligibility period.

(e)  Other benefits shall be calculated by:

(1)           Compute "Average Final Compensation" on the basis of compensation on which the member would have contributed had he not been earning "split" service as an employee with dual membership.

(2)           Compute creditable service as follows:

(A)          the number of months of creditable service the member earned or acquired which were based on compensation for service in only one of the systems; plus

(B)          the total of the fractional months earned by the member in each of the systems during periods of dual membership; where

(C)          the fractional months during periods of dual membership is equal to the same fraction of a month that the compensation reported to the system bears to the total compensation reported to all systems.

(3)           Compute the annual allowance for a member by multiplying the average final compensation times the creditable service as computed in Subparagraphs (1) and (2) of this Paragraph.

(4)           Allocate the benefits to be paid from each system pro rata on share of creditable service in each system as computed in (d)(2) of this Rule.

(f)  This Rule shall apply to any individual case in which a member with dual membership commenced retirement with one retirement system prior to the effective date of this Rule and continued in service under the other retirement system.  In such cases, the retirement allowance of the member from the system with which he first retired shall be recomputed in accordance with this Rule and paid retroactively to the effective date of this Rule.

 

History Note:        Authority G.S. 128‑28(g); 135‑6(f);

Eff. December 1, 1981;

Amended Eff. March 1, 1985.

 

20 NCAC 02A .0504         DIRECT DEPOSIT OF MONTHLY BENEFIT PAYMENTS

(a)  This Rule applies to any individual case in which a beneficiary's monthly benefit was paid via electronic funds transfer (EFT) or direct deposit, when such EFT was suspended by the Division in error.  This Rule does not apply to any individual case involving a delay by this Division to initiate an EFT or a change in an existing EFT arrangement requested by a beneficiary.

(b)  The Division may reimburse non‑sufficient fund charges incurred by a beneficiary due to the suspension in error of an existing EFT arrangement when the beneficiary was not properly notified of the suspension of such arrangement and upon receipt of satisfactory proof that such charges were incurred.

(c)  Any other bad check service charges or fees imposed by any financial institution or merchant may be reimbursed at the discretion of the Division Director upon receipt of satisfactory proof that such charges were incurred.

(d)  Any such reimbursement of NSF or bad check service charges shall be paid from the Pension Accumulation Fund of the Retirement System in which the beneficiary is in receipt of a benefit.

 

History Note:        Authority G.S. 128‑28(g); 135‑6(f); 135‑52; 135‑102(c);

Eff. March 1, 1992.

 

SECTION .0600 ‑ INVESTMENTS

 

 

20 NCAC 02A .0601         INVESTMENT OF FUNDS

20 NCAC 02A .0602         INVESTMENT COMMITTEE

 

History Note:        Authority G.S. 135‑6(f); 128‑28(g);

Eff. September 21, 1977;

Repealed Eff. March 1, 1985.