SUBCHAPTER 2B ‑ TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM

 

 

SECTION .0100 ‑ GENERAL PROVISIONS

 

 

20 NCAC 02B .0101          GENERAL INFORMATION

The following is general information about the Teachers' and State Employees' Retirement System:

(1)           The chief officer is the Director of the Retirement Systems;

(2)           The mailing address is 325 North Salisbury Street, Raleigh, North Carolina 27611.

(3)           The office is located in the Albemarle Building, 325 North Salisbury Street, Raleigh, North Carolina.

 

History Note:        Authority G.S. 135‑6(f); 150B‑10;

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0102          PURPOSES

20 NCAC 02B .0103          FORMS

 

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

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Repealed Eff. March 1, 1985.

 

SECTION .0200 ‑ ADMINISTRATION

 

 

20 NCAC 02B .0201          AVERAGE FINAL COMPENSATION

The term "consecutive calendar years" is defined for the purpose of determining retirement allowances as a period of time consisting of a number of calendar months of creditable service equal to 12 times the number of years specified by statute during which the highest total compensation was earned, adjusted proportionally to the regular term of annual employment.

 

History Note:        Authority G.S. 135‑6(f); 135‑1(5);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0202          ACTUARIAL TABLES: RATES AND ASSUMPTIONS

(a)  Actuarial tables and assumptions will be adopted by the board of trustees after the presentation of the recommendations of the actuary by including the tables, rates, etc. in the minutes of the board with the resolution adopting said tables, rates or assumptions.

(b)  The director of the retirement systems shall maintain a file of copies of all resolutions adopting tables, rates or assumptions and the current version of all tables as amended by the board of trustees.  The file shall be open and readily available to the public during regular office hours.

(c)  This Rule includes but is not limited to the following actuarial tables and assumptions:

(1)           interest rate assumptions;

(2)           salary increase assumptions;

(3)           required contribution rates;

(4)           mortality assumptions;

(5)           separation and retirement assumptions;

(6)           joint and survivor tables;

(7)           reserve transfer tables.

(d)  Tables, rates and assumptions shall become effective on the first day of the month following adoption, unless a specific effective date is included in the adopting resolution.  If the specific date is included, the tables, rates or assumptions shall be effective as provided in the adopting resolution.

 

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

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. August 1, 1981.

 

20 NCAC 02B .0203          OFFICIAL MORTALITY TABLE

20 NCAC 02B .0204          ACTUARIAL CALCULATIONS

20 NCAC 02B .0205          RECOMMENDATIONS OF ACTUARY

20 NCAC 02B .0206          ACTUARIAL VALUATIONS

20 NCAC 02B .0207          RESERVE TRANSFER

 

History Note:        Authority G.S. 135‑6(f); 135‑6(m); 135‑6(n); 135‑6(o); 135‑18.1;

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Repealed Eff. August 1, 1981.

 

20 NCAC 02B .0208          DEATH OF RETIRED MEMBER

During the month a retired member dies, the legal representative of the deceased shall be entitled to a full check for the month in which the death occurred.

 

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

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0209          DISCLOSURE OF INFORMATION

The director is authorized, in his discretion, to release lists of retired personnel to the public agencies, departments, and institutions of the State of North Carolina and to non‑profit public associations and organizations of retired personnel.

 

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

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. March 1, 1985.

 

20 NCAC 02B .0210          MEDICAL BOARD

In accordance with the authority contained in G.S. 135‑6(k) membership of the medical board is increased from three to five physicians with a quorum of three being required at meetings approving applications for disability retirement.

 

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

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0211          OPTIONAL RETIREMENT PROGRAM

An individual who is employed by a state university at a rank or in a position which does not qualify him for participation in the optional retirement program, as provided by G.S. 135‑5.1, and who later is reclassified to the rank of instructor or above shall be permitted to exercise the option of electing to withdraw from Teachers' and State Employees' Retirement System and to begin participation in the optional retirement program as though he were a new employee.

 

History Note:        Authority G.S. 135‑5.1; 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0212          SURVIVOR'S ALTERNATE BENEFIT

With respect to eligibility for the survivor's alternate benefit, any member who files an acceptable application for retirement while in service will be deemed "in service" until he has cashed his first retirement check.

 

History Note:        Authority G.S. 135‑19; 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0213          DISABILITY RETIREMENT ALLOWANCE DEFINED

A member shall be deemed to have been "entitled to receive a disability retirement allowance" if a proper application for disability retirement allowance was received before his death, if he had five or more years of creditable service, if the medical board, after a medical examination of such member pursuant to G.S. 135‑5(c), shall certify that such member was mentally or physically incapacitated for the further performance of duty, that such incapacity was incurred at the time of active employment and was continuous thereafter, that such incapacity was likely to be permanent, and that such member should be or should have been retired, and if all other requirements for disability retirement pursuant to G.S. 135‑5(c) had been met except that the member need not live to the actual date of retirement.

 

History Note:        Authority G.S. 135‑5(1)(3);

Eff. October 29, 1979.

 

20 NCAC 02B .0214          RETROACTIVE MEMBERSHIP SERVICE

(a)  A member omitted from contributing membership through error may within three years of such omission be allowed membership service, after clear and convincing evidence of the error is submitted to the director, by payment of the employee and employer contributions which would have been paid during the period of time omitted plus interest on both equal to the average yield of the pension accumulation fund during the period of time omitted.

(b)  A member omitted from contributing membership through error may after three years of such omission be allowed membership service, after clear and convincing evidence of the error is submitted to the director, by payment of the full actuarial liability for the additional service in the same manner prescribed in 20 NCAC 2B .1200, Delayed Purchase Of Service Credits.

 

History Note:        Authority G.S. 135‑3(1); 135‑6(f);

Eff. June 1, 1984.

 

SECTION .0300 ‑ BENEFICIARIES

 

 

20 NCAC 02B .0301          DESIGNATION

Any beneficiaries designated, other than the estate of a member or a trustee named by and acting for the member, must be living persons at the time the designation is made.  If it is desired that the estate be beneficiary, this should be indicated on the form.

 

History Note:        Authority G.S. 135‑5(g); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0302          PRINCIPAL BENEFICIARY

More than one principal beneficiary may be named to share equally.  In the event of the death of any so named, those surviving shall share equally in the total benefits.

 

History Note:        Authority G.S. 135‑5(g); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0303          CONTINGENT BENEFICIARY

A principal beneficiary may be named with the stipulation that should he predecease the member, payment of the amount due, if any, will be made to a designated contingent beneficiary.  It is permissible to name more than one contingent beneficiary.  In the event of the death of any so named, those surviving shall share equally in the total benefits.  If more than one principal beneficiary is named, the naming of a contingent beneficiary or beneficiaries will not be permitted.

 

History Note:        Authority G.S. 135‑5(g); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0304          NO LIVING BENEFICIARY

If no named beneficiary, whether principal or contingent, is living at the time of the member's death, payment of the amount due, if any, will be made to the estate of the member.

 

History Note:        Authority G.S. 135‑5(g); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0305          BENEFICIARY WHO IS A MINOR

Payments to beneficiaries who are minors will be made to a duly appointed guardian or to the clerk of superior court in the county in which they reside to the extent that such payment may be authorized by law.

 

History Note:        Authority G.S. 135‑5(g); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0306          CHANGE IN STATUS

 

History Note:        Authority G.S. 135‑5(g); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Repealed Eff. March 1, 1985.

 

20 NCAC 02B .0307          CHANGE IN BENEFICIARY

Prior to retirement, the member has the right at any time, and from time to time, to change any beneficiaries designated without the knowledge or consent of the beneficiaries.  Any such change must be submitted to the board of trustees.

 

History Note:        Authority G.S. 135‑5(g); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0308          SPECIAL RULE: BENEFICIARY BEFORE JULY 1, 1967

In the event of the death of a person who became a member before July 1, 1967, the return of a member's contributions shall be paid to such person as the member intended to receive his return of contributions and whom he designated as beneficiary for the death benefit as if the member had properly designated such person for the return of contributions if the following conditions are met:

(1)           the member had properly designated one person for the death benefit at a time when there were separate forms for designation of beneficiary for return of contributions and designation of beneficiary for the death benefit;

(2)           the person designated as beneficiary for the death benefit is living at the time of the member's death;

(3)           any previously designated beneficiary for the return of contributions who is living at the time of the member's death or, if such previously designated beneficiary dies between the time of the member's death and the time of determination of payment of the return of accumulated contributions, the legatee(s), heirs at law, successors or assigns of such beneficiary, waives all claims to or interest in the return of the member's contributions;

(4)           the member did not designate any other person for the return of contributions after making a designation of beneficiary for the death benefit; and

(5)           clear and convincing evidence is presented to the retirement system showing that the member thought he had or intended to have designated for the return of contributions the same person whom he designated as beneficiary for the death benefit.

In such cases, the beneficiary shall be entitled to receive the survivor's alternate benefit pursuant to G.S. 135‑5(m) to the same extent that he would have been entitled to receive the survivor's alternate benefit under G.S. 135‑5(m) if the member had actually designated such beneficiary for the return of contributions in a duly executed and filed form for the designation of beneficiary for return of contributions.

 

History Note:        Authority G.S. 135‑5(m);

Eff. October 29, 1979.

 

SECTION .0400 ‑ EMPLOYER CONTRIBUTIONS

 

 

20 NCAC 02B .0401          REFUNDS

The retirement system will make no refunds of employer contributions in cases of erroneous employee deductions except those which are corrected by the employing unit on a subsequent payroll within the calendar year in which the errors occur.  The only exception to this Rule is that an error occurring in December may be corrected (without loss of the employer contribution) by submission of a revised payroll with checks for the correct amount before January 31 of the following year.

 

History Note:        Authority G.S. 135‑8(f); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0402          FORWARDING OF EMPLOYER CONTRIBUTIONS

All units should forward to the retirement system the employer's contributions monthly at the same time the employee's contributions are forwarded.

 

History Note:        Authority G.S. 135‑8(f)(1); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0403          CONTRIBUTION RATE

 

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

Eff. September 21, 1977;

Repealed Eff. August 1, 1981.

 

20 NCAC 02B .0404          DUE DATE OF CONTRIBUTIONS

Both the employee and employer contributions are due in the Raleigh offices of the Retirement System no later than the fifth State government working day of the month succeeding the month for which the contributions are required.  Contributions received after the fifth State government working day of the month are delinquent.

 

History Note:        Authority G.S. 135‑6(f); 135‑8(f);

Eff. March 1, 1992.

 

SECTION .0500 ‑ TYPES OF RETIREMENT

 

 

20 NCAC 02B .0501          DISABILITY RETIREMENT EXAMINATION

The director is authorized to conduct examination in doubtful cases of disability to determine the condition of the disability, paying the expense of the same from the pension accumulation fund.

 

History Note:        Authority G.S. 135‑5(c); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0502          DISABILITY RETIREMENT REPORTS

When the medical board, subsequent to a disability retirement, reports that the retired member is engaged in, or is able to engage in a gainful occupation, any adjustment required by G.S. 135‑5(e)(1) will be made prospectively only and will not relate back so as to require any refund to the state of payments made during the period before a report is made indicating changed status.

 

History Note:        Authority G.S. 135‑5(e)(1); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0503          FEES: INDEPENDENT MEDICAL EXAMS‑DISABILITY RETIREMENTS

Physicians employed upon the recommendations of the Medical Board to examine and report on special cases of disability retirement applicants and re‑examination of disability beneficiaries shall be paid fees commensurate with usual, customary and reasonable charges for such tests, examinations, procedures and reports as the Medical Board might request; and, the amounts of such fees shall be predetermined by mutual agreement between the director and the physicians so employed, with the advice of the Medical Board as to the amounts, provided that no fee for any one applicant or beneficiary shall exceed the sum of one hundred and fifty dollars ($150.00).

 

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

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. August 1, 1981.

 

20 NCAC 02B .0504          INTEREST CREDITS

When members on disability retirement are reinstated to active service, no interest shall be allowed on their accounts during the year of reinstatement.

 

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

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0505          EARLY RETIREMENT

20 NCAC 02B .0506          SERVICE RETIREMENT

20 NCAC 02B .0507          PERSONNEL EMPLOYED

 

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

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Repealed Eff. March 1, 1985.

 

20 NCAC 02B .0508          FAILURE TO RESPOND

If a member fails to respond in any way within 90 days after preliminary option figures and Form 6‑E, Election of Benefits, are mailed, the Form 6, Application for Service, Early or Disability Retirement, will be null and void; the retirement system will not be liable for any benefits due on account of the voided application and a new application must be filed establishing a subsequent effective date of retirement.  If an applicant for disability retirement fails to furnish requested additional medical information within 90 days following such request, the application will be declared null and void under the same conditions outlined above, unless the applicant is eligible for early or service retirement in which case the application will be processed accordingly, using the same effective date as would have been used had the application for disability retirement been approved.

 

History Note:        Authority G.S. 135‑5(a)(1); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

Pursuant to G.S. 150B-33(b)(9), Administrative Law Judge Melissa Owens Lassiter declared Rule 20 NCAC 02B .0508 void as applied in Burton L. Russell v. Department of State Treasurer, Retirement Systems Division (03 DST 1715).

 

20 NCAC 02B .0509          RETIREMENT ALLOWANCE

 

History Note:        Authority G.S. 135‑18.1; 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Repealed Eff. December 1, 1981.

 

20 NCAC 02B .0510          PENSIONS

Payment of a full month's benefit shall be made for the month in which death occurs, regardless of the date, with no further benefits to be paid thereafter.

 

History Note:        Authority G.S. 135‑14; 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

SECTION .0600 ‑ INVESTMENTS

 

 

20 NCAC 02B .0601          STOCK

20 NCAC 02B .0602          AUTHORIZATION

20 NCAC 02B .0603          VALUATION EQUITY RESERVE

 

History Note:        Authority G.S. 135‑7.2; 135‑6(f);

Eff. February 1, 1976;

Repealed Eff. September 21, 1977.

 

SECTION .0700 ‑ LEAVES OF ABSENCE

 

20 NCAC 02B .0701          EDUCATIONAL LEAVES OF ABSENCE

(a)  All members, who request approval to purchase creditable service and who fulfill all of the requirements of law and the rules of the board, shall be allowed to purchase the service in accordance with the law and the rules of the board.

(b)  Payments to be made for purchases on account of current leave of absence shall be submitted on Form 224, Payment of Contributions for a Current Leave of Absence, which shall be submitted as required by law.  If the employer will make the monthly contributions equal to the normal and accrued liability contribution, the employer shall submit the total payment.  If the member will make the entire payment, the member shall submit the total payment.  In any case in which the employer continues to make salary payments, in whole or part, the director may make an agreement with the employer on how to make the payments which is not inconsistent with the law or the rules of the board.

(c)  Contributions for purchase of service shall not be accepted unless the member has applied for permission to purchase the service not later than the due date of the payment for the first month for which credit is to be purchased.  Applications after the last day of the first month for which service is to be purchased and the due date thereof shall be accompanied by a check in payment of the contribution for said month.

(d)  Payment shall be deemed to have been made on the date received by the board, provided that a payment made by mail which is clearly postmarked on or before the due date shall be deemed paid when due.

(e)  Purchases of service credit for leaves of absence prior to July 1, 1981 shall be made in the same manner as prescribed in 20 NCAC 2B .1200, DELAYED PURCHASE OF SERVICE CREDITS.

(f)  A member, who is currently making contributions to purchase service for an educational leave of absence, and whose position before the leave of absence was paid on a less than 12‑month basis, shall make the payment in the month after the regularly scheduled due date for payment of salary and shall earn service credits for said contributions in the same manner as he would if he was currently being employed in that last position.

 

History Note:        Authority G.S. 135‑6(f); 135‑8(b)(5);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. March 1, 1982.

 

20 NCAC 02B .0702          REQUESTS TO CONTRIBUTE

20 NCAC 02B .0703          MANDATORY LEAVE OF ABSENCE

20 NCAC 02B .0704          MEMBER AGE SIXTY‑FIVE

20 NCAC 02B .0705          LIMITATION

 

History Note:        Authority G.S. 135‑8(b)(5); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Repealed Eff. March 1, 1982.

 

20 NCAC 02B .0706          WORKERS' COMPENSATION LEAVES OF ABSENCE

(a)  All members, who request approval to purchase creditable service and who fulfill all of the requirements of law and the rules of the board, shall be allowed to purchase the service in accordance with the law and rules of the board.

(b)  Purchases of creditable service for leaves of absence prior to July 1, 1983 shall be made in the same manner as prescribed in 20 NCAC 2B .1200 DELAYED PURCHASE OF SERVICE CREDITS.  A fee in the amount of twenty‑five dollars ($25.00) for each payment will be assessed members at the time of purchase as provided by law.

(c)  Purchases of creditable service for leaves of absence on and after July 1, 1983 shall be paid in the manner prescribed in law equal to the sum of the total employer and employee percentage rates of contribution in effect at the time of purchase multiplied by the annual rate of compensation of the member immediately prior to the leave of absence applied to the period of the leave commencing on the first day and ending on the last day before return to service.

(d)  Members who had leaves of absence which otherwise met all requirements of law for purchase as creditable service except that the leaves of absence interrupted membership in the Local Governmental Employees' Retirement System or the Law Enforcement Officers' Retirement System and whose membership service before and after the leaves of absence has become membership service in the Teachers' and State Employees' Retirement System, may purchase creditable service as in (b) of this Rule.

(e)  Members may purchase creditable service for leaves of absence only when they have membership service credits immediately prior to and immediately after the leaves of absence and such membership service is creditable service at the time of purchase.

 

History Note:        Authority G.S. 135‑4(r); 135‑6(f);

Eff. December 1, 1983;

Amended Eff. August 1, 1988.

 

SECTION .0800 ‑ MILITARY SERVICE (INCHOATE RIGHTS ONLY)

 

 

20 NCAC 02B .0801          FEE

A fee in the amount of twenty‑five dollars ($25.00) for each payment will be assessed each individual at the time of payment to help defray the expense of handling.

 

History Note:        Authority G.S. 135‑4(f)(6); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0802          QUALIFYING FOR CREDIT

In order to qualify, each individual must pay for the full period of military service for which he is eligible.

 

History Note:        Authority G.S. 135‑4(f)(6); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0803          COMPUTATION OF COST

The cost of purchasing credit for military service is calculated as follows:

(1)           1/12 of the annualized rate of compensation the member earned when he first entered membership; times

(2)           the employee contribution rate at that time; times

(3)           the number of months of military service for which credit is to be purchased; plus

(4)           a factor equivalent to interest at the rate of six and one‑half percent, compounded annually, from the initial year of membership to the year of payment.

 

History Note:        Authority G.S. 135‑4(f); 135‑6(f);

Eff. February 1, 1976;

Readopted September 21, 1977.

 

20 NCAC 02B .0804          CIVIL SERVICE PARTICIPATION

A member of the Teachers' and State Employees' Retirement System whose employment in this state requires him to participate in the Federal Civil Service Program in lieu of the social security program shall not be barred from receiving military service credit for which he is otherwise eligible in the retirement systems despite the fact that he may also receive credit under civil service for the same period of military service, provided that he makes the required payment.

 

History Note:        Authority G.S. 135‑4(f)(6); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0805          SERVICE CONNECTED DISABILITY

The exclusion, for purchase of service in the Armed Forces of the United States as it pertains to credit in any other retirement system, shall not include "service connected disability" benefits received from the Veteran's Administration of the Federal Government except when such benefits are a supplement of a "longevity retirement" benefit.

 

History Note:        Authority G.S. 135‑4(f)(6); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0806          RECALCULATION OF BENEFITS

For members already retired who avail themselves of these provisions, any recalculation of benefits shall be based on the law in effect at the time of the individual's retirement including the additional service credit and effect shall be given for all benefit increases subsequent to the date of retirement which shall be a part of the total cost of providing the additional service credit.

 

History Note:        Authority G.S. 135‑4(f)(6); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0807          CHANGE IN BENEFITS

For members already retired, any change in benefits resulting from these provisions shall become effective as of the first of the month following receipt of the required payment.

 

History Note:        Authority G.S. 135‑4(f)(6); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0808          EMPLOYER PORTION OF ANNUAL COST

20 NCAC 02B .0809          PAYMENTS

 

History Note:        Authority G.S. 135‑4(f)(6); 135‑6(f);

Eff. February 1, 1976;

Readopted September 21, 1977;

Repealed Eff. March 1, 1985.

 

20 NCAC 02B .0810          RESTORING MEMBERSHIP

When a member on military leave has withdrawn all of his contributions, he will be permitted to pay back the amount withdrawn, restore his membership and receive credit for the period of his military leave.

 

History Note:        Authority G.S. 135‑4(f); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0811          INITIAL PERIOD OF ACTIVE DUTY

The term "initial period of active duty," as used in G.S. 135‑4(f)(6) is construed as including but not limited to any active duty in the armed forces of the United States during the periods beginning September 16, 1940 and ending December 31, 1946, and beginning June 27, 1950 and ending January 31, 1955.

 

History Note:        Authority G.S. 135‑4(f); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

SECTION .0900 ‑ OUT‑OF‑STATE SERVICE (INCHOATE RIGHTS ONLY)

 

 

20 NCAC 02B .0901          FEE

A fee in the amount of twenty‑five dollars ($25.00) for each payment will be assessed each individual at the time of payment to help defray the expense of handling out‑of‑state service credit.

 

History Note:        Authority G.S. 135‑4(l); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0902          QUALIFYING FOR CREDIT

In order to qualify for out‑of‑state service credit, each individual must pay for all or such portion in full years as he desires of out‑of‑state service for which he is eligible.

 

History Note:        Authority G.S. 135‑4(l); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0903          DEFINITION

"Other governmental subdivisions of the United States," as used in G.S. 135‑4(l), shall mean a state or territory and its subdivisions but not the United States government, except as specifically provided by statute.

 

History Note:        Authority G.S. 135‑4(l); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0904          COMPUTATION OF COST

The cost of purchasing credit for out‑of‑state service is calculated as follows:

(1)           the monthly compensation the member earned when he first entered membership; times

(2)           the employee contribution rate at that time; times

(3)           the number of months of out‑of‑state service for which credit is to be purchased; times

(4)           two; plus

(5)           a factor equivalent to interest at the rate of six and one‑half percent, compounded annually, from the initial year of membership to the year of payment.

 

History Note:        Authority G.S. 135‑4(l); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0905          RECALCULATION OF BENEFITS

For members already retired who avail themselves of the provisions for out‑of‑state service, any recalculation of benefits shall be based on the law in effect at the time of the individual's retirement including the additional service credit and effect shall be given for all benefit increases subsequent to the date of retirement which shall be a part of the total cost of providing the additional service credit.

 

History Note:        Authority G.S. 135‑4(l); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0906          CHANGE IN BENEFITS

For members already retired, any change in benefits resulting from the provisions for out‑of‑state service shall become effective as of the first of the month following receipt of the required payment.

 

History Note:        Authority G.S. 135‑4(l); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .0907          COST TO EMPLOYER

 

History Note:        Authority G.S. 135‑4(l); 135‑6(f);

Eff. February 1, 1976;

Repealed Eff. September 21, 1977.

 

20 NCAC 02B .0908          PAYMENTS

 

History Note:        Authority G.S. 135‑4(l); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Repealed Eff. March 1, 1985.

 

SECTION .1000 ‑ PRIOR SERVICE

 

 

20 NCAC 02B .1001          PUBLIC SCHOOL TEACHERS

Public school teachers are eligible to receive credit for service performed in private schools and orphanage schools where the state has later provided public schools in lieu of such private schools, and has later taken over and is currently operating such schools.

 

History Note:        Authority G.S. 135‑4;

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .1002          SERVICE UNDER WPA

 

History Note:        Authority G.S. 135‑4;

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Repealed Eff. March 1, 1985.

 

20 NCAC 02B .1003          PRIOR SERVICE WITH GENERAL ASSEMBLY

(a)  Employees eligible under S.L. 1979, Ch. 698 to purchase such service may make application to purchase prior service as a full‑time employee of the General Assembly for which membership credit was not previously allowed.

(b)  The Legislative Services Officer shall certify to the retirement system that the applicant was a full‑time employee during the period for which the application is made.  The said certification shall also certify the total hours and salary paid in each month.  Provided, however, if the Legislative Services Officer certified that the monthly data is not available, he may certify the data in the form in which it is available.

(c)  If earnings and service are certified on a monthly basis, compute the required contributions and earned service in the same manner as would have been calculated if paid at that time.

(d)  If earnings and service are not certified on a monthly basis, compute the required contribution at the highest rate in effect during the period for which certified.  Allow one month of service for each 20 days.  To the extent possible, integrate periods of service to be purchased with intervening periods of membership service.

(e)  Fractional months of service for multiple service period being certified shall be added together to determine the total allowable service.  Remaining fractional months in excess of one‑half shall be considered to be a full month.

(f)  Regular interest, as provided for in G.S. 135‑7(b), shall be calculated and charged through the year of purchase.

(g)  An administrative fee of $25.00 shall be collected at the time application is made to purchase service.

(h)  No person shall purchase less than the total service for which they are eligible.

 

History Note:        Authority G.S. 135‑4(j1); 135‑6(f);

Eff. October 29, 1979.

 

20 NCAC 02B .1004          TEMPORARY SERVICE PURCHASE

(a)  A member eligible under G.S. 135‑4(p) to purchase service for temporary State employment shall make the application on Form 222, Application to Purchase Service Credits for Full‑Time Temporary State Employment.  Employer certification of temporary State employment and the compensation received for such service shall be made on Form 222‑A, Employer Certification of Full‑Time Temporary Service, and shall accompany the application.

(b)  Temporary State employment means employment under which the member would have been unconditionally required to make contributions at the time of employment if not classified at the time of employment as a "temporary" employee.

(c)  Since the actual cost to fund the liability created on account of the purchase has a direct relationship to the purchasing member's current level of compensation, the employer cost will be computed on the member's level of compensation at the time of purchase.  The employer cost, therefore, shall be equal to the total employee and employer rates of contribution at the member's level of compensation at the time of purchase and for the period of service being purchased, less the required member contribution.

(d)  No purchases shall be allowed for 36 months or less.

 

History Note:        Authority G.S. 135‑4(p); 135‑6(f);

Eff. March 1, 1982;

Amended Eff. March 1, 1985; September 1, 1982.

 

20 NCAC 02B .1005          TEMPORARY SERVICE PURCHASE: FULL ACTUARIAL LIABILITY

(a)  All members, who request approval to purchase creditable service for temporary state employment and who fulfill all of the requirements of law and the rules of the board, shall be allowed to purchase the service in accordance with the law and rules of the board.

(b)  Purchases of creditable service for temporary state employment shall be made in the same manner as prescribed in 20 NCAC 2B .1200 DELAYED PURCHASE OF SERVICE CREDITS.

(c)  Members requesting approval to purchase creditable service shall make application on and acquire certification from the employer of the temporary employment on Form 222‑B, Application to Purchase Temporary State Employment.

(d)  The phrase "temporary employment" as used in G.S. 135‑4(s)(2) shall mean a period of continuous temporary employment prior to membership, except when multiple periods of temporary employment were interrupted by less than 90 calendar days or by the number of days between consecutive academic/school years.

(e)  The phrase "completed 10 years or more of membership service" as used in G.S. 135‑4(q)(3) shall mean membership service completed after the temporary state employment.

(f)  A fee in the amount of twenty‑five dollars ($25.00) for each payment shall be assessed members at the time of purchase as provided by law.

 

History Note:        Authority G.S. 135‑4(s); 135‑6(f);

Eff. December 1, 1983;

Amended Eff. August 1, 1988; September 1, 1984.

 

20 NCAC 02B .1006          PART‑TIME SERVICE PURCHASE: FULL ACTUARIAL LIABILITY

(a)  Members requesting approval to purchase creditable service shall make application on and acquire certification from the employer of the part‑time employment on the form designated for this purpose.

(b)  The phrase "part‑time" as used in G.S. 135‑4(pl) shall refer to duties performed on less than a full‑time basis.

(c)  The phrase "completed 10 years or more of membership service" as used in G.S. 135‑4(pl) shall mean membership service completed after the "part‑time" state employment.

(d)  The amount of part‑time service to be purchased shall be computed as follows:

(1)           Determine the ratio of the actual gross compensation earned as a part‑time employee (numerator) to the gross compensation that would have been earned as a full‑time employee (denominator);

(2)           Apply the ratio (quotient) determined in (1) of this Paragraph to the period of service rendered in months.

(e)  Purchases of creditable service for part‑time state employment shall be made in the same manner as prescribed in 20 NCAC 2B .1200.

(f)  A fee in the amount of twenty‑five dollars ($25.00) for each payment shall be assessed members at the time of purchase as provided by law.

 

History Note:        Authority G.S. 135‑4(pl); 135‑6(f);

Eff. March 1, 1985.

 

20 NCAC 02B .1007          LOCAL GOVERNMENT SERVICE PURCHASE: FULL ACTUARIAL LIABILITY

(a)  Members requesting approval to purchase creditable service shall make application on and acquire certification from the employer, of the local government employment on the form designated for this purpose.

(b)  The phrase "local government employment" shall mean service while regularly employed as defined in 20 NCAC 2C .0802.

(c)  The phrase "local government employer" shall mean a local governmental entity as defined in G.S. 128‑21(11).

(d)  The phrase "upon completion of 10 years of membership service" as used in G.S. 135‑4(t) shall mean membership service completed after the local governmental employment.

(e)  Purchases of creditable service for local government employment shall be made in the same amount as prescribed in 20 NCAC 2B .1200.

(f)  A fee in the amount of twenty‑five dollars ($25.00) for each payment shall be assessed members at the time of purchase as provided by law.

 

History Note:        Authority G.S. 135‑4(t); 135‑6(f);

Eff. March 1, 1985.

 

SECTION .1100 ‑ VOLUNTARILY WITHDRAWN CONTRIBUTIONS

 

 

20 NCAC 02B .1101          FEE

A fee in the amount of twenty‑five dollars ($25.00) for each payment will be assessed each individual at the time of payment for voluntarily withdrawn contributions to help defray the expense of handling.

 

History Note:        Authority G.S. 135‑4(k); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .1102          QUALIFICATION

In order to qualify for service credit, each individual must restore all accounts previously withdrawn on a voluntary basis.

 

History Note:        Authority G.S. 135‑4(k); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .1103          COMPUTATION OF COST

(a)  The cost of repaying voluntarily withdrawn contributions representing service by a member who left service prior to July 1, 1974 is calculated as follows:

(1)           the amount of contributions withdrawn; plus

(2)           a factor equivalent to interest at the rate of six and one‑half percent compounded annually, from the year of withdrawal to the year of repayment.

(b)  The cost of repaying voluntarily withdrawn contributions representing service by a member who left service after June 30, 1974 is calculated as double the amount calculated in Paragraph (a) of this Rule.

 

History Note:        Authority G.S. 135‑4(k); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Amended Eff. June 1, 1984.

 

20 NCAC 02B .1104          RECALCULATION OF BENEFITS

For members already retired who avail themselves of these provisions, any recalculation of benefits shall be based on the law in effect at the time of the individual's retirement including the additional service credit and effect shall be given for all benefit increases subsequent to the date of retirement which shall be a part of the total cost of providing the additional service credit.

 

History Note:        Authority G.S. 135‑4(k); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .1105          CHANGE IN BENEFITS

For members already retired, any change in benefits resulting from these provisions shall become effective as of the first of the month following receipt of the required payment.

 

History Note:        Authority G.S. 135‑4(k); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977.

 

20 NCAC 02B .1106          EMPLOYER COST

20 NCAC 02B .1107          PAYMENTS

 

History Note:        Authority G.S. 135‑4(m); 135‑6(f);

Eff. February 1, 1976;

Readopted Eff. September 21, 1977;

Repealed Eff. March 1, 1985.

 

20 NCAC 02B .1108          WILDLIFE PROTECTORS

Members who forfeited creditable service on account of the transfer from this Retirement System to the Law Enforcement Officers' Retirement System under Chapter 837 of the 1971 Session Laws and were further transferred from the Law Enforcement Officers' Retirement System to this Retirement System under Chapter 1034 of the 1983 Session (Regular Session, 1984) Laws, may restore such creditable service by paying an amount calculated pursuant to this Section.

 

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

Eff. March 1, 1985.

 

SECTION .1200 ‑ DELAYED PURCHASE OF SERVICE CREDITS

 

 

20 NCAC 02B .1201          APPLICATION OF SECTION

This Section applies to purchase of creditable service whenever a statutory provision prescribes that a payment by a member shall equal the full liability/cost of the service calculated on the basis of the assumptions used for purposes of the actuarial valuation of the Retirement System's liabilities, and shall take into account the retirement allowance arising on account of the additional service credit at the earliest age at which a member could retire on an unreduced service retirement allowance.  An applicant shall be eligible to purchase creditable service under this Section only after having met all requirements of eligibility for purchase as defined by law and on rules duly adopted.

 

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

Eff. October 29, 1979;

Amended Eff. March 1, 1985.

 

20 NCAC 02B .1202          ACTUARIAL TABLES

 

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

Eff. October 29, 1979;

Repealed Eff. August 1, 1981.

 

20 NCAC 02B .1203          APPLICABILITY OF OTHER SECTIONS

 

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

Eff. October 29, 1979;

Repealed Eff. March 1, 1985.

 

20 NCAC 02B .1204          DEFINITIONS

The following words and phrases have the meanings indicated when used in this Section, unless the context clearly requires another meaning:

(1)           "earliest retirement date" is the first date at which the applicant could retire with an unreduced benefit;

(2)           "nearest age" is year and whole month of the age of the member which is closest to the date specified;

(3)           "estimated allowance (with purchase)" is the estimated retirement allowance computed in the normal manner at the earliest retirement date and the years of service the applicant would have if the purchase is made;

(4)           "estimated allowance (without purchase)" is the estimated allowance computed in the normal manner at the earliest retirement date and the years of service which the applicant would have at that time if no purchase is made.

 

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

Eff. October 29, 1979;

Amended Eff. March 1, 1985; June 1, 1982.

 

20 NCAC 02B .1205          COMPUTATION OF COST

The cost of a delayed purchase of service credit is computed as follows:

(1)           Determine earliest retirement dates;

(2)           Determine estimated average final compensation (with purchase) and (without purchase) by multiplying the total compensation actually paid for the period for which 12 months' service credit will have been earned through the current month by the factor determined from the table of Salary Factors using the member's nearest age on the last day of the current month and at the earliest retirement date (with purchase) and (without purchase).  Provided that if the member is out of service but not retired, has passed his 65th birthday, or has 30 years of service credit without the purchase, the estimated average final compensation will be calculated in the normal manner for the compensation and service recorded by the Retirement System;

(3)           Determine estimated allowance (with purchase);

(4)           Determine required reserve on estimated allowance (with purchase) by multiplying the estimated allowance (with purchase) by the reserve factor found in the Table of Reserve Factors for the nearest ages at purchase date and at earliest retirement date;

(5)           Determine estimated allowance (without purchase);

(6)           Determine available reserve on estimated allowance (without purchase) by multiplying the estimated allowance (without purchase) by the reserve factor for the nearest ages at purchase date and at earliest retirement date;

(7)           The cost of purchasing service credit is the difference between the required reserve (with purchase) and the available reserve (without purchase).  Provided that if the difference between the required reserve and the available reserve is zero, the cost of purchasing the service credit is the estimated average final compensation (with purchase) times the number of years service purchased, times the statutory service factor, times the reserve factor for the nearest ages at the last day of the last month for which the compensation used was recorded and at earliest retirement date (with purchase).

 

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

Eff. October 29, 1979;

Amended Eff. June 1, 1982.

 

20 NCAC 02B .1206          SERVICE AS COURT REPORTER

 

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

Eff. October 29, 1979;

Repealed Eff. March 1, 1985.

 

20 NCAC 02B .1207          SPECIAL RULE FOR RETIRED APPLICANTS

The cost of a delayed purchase of service credit for a person currently receiving a retirement allowance is computed as follows:

(1)           Determine the estimated allowance (with purchase), what is the monthly amount that the applicant would be receiving, if he had retired at his original retirement date for his present option, with his current creditable service plus the service to be purchased, by using the factors applicable at his actual retirement date, and including all cost‑of‑living and special percentage increases which he has actually received since his first monthly retirement benefits.

(2)           Determine the difference between his estimated allowance (with purchase) and his present monthly retirement benefit.

(3)           Determine the cost of purchasing the service credit by multiplying the difference in monthly benefit by twelve, and then dividing by the option factor from the Table of Option Factors for his current option and then multiplying by the reserve factor from the Table of Reserve Factors for his current age and retirement age.

 

History Note:        Authority G.S. 135‑6(f); 135‑4(m);

Eff. March 1, 1982;

Amended Eff. March 1, 1985.