H.B. 1020
GENERAL ASSEMBLY OF NORTH CAROLINA
May 2, 2024
SESSION 2023 HOUSE PRINCIPAL CLERK
H D
HOUSE BILL DRH40587-MRp-117C
Short Title: Retirement Admin. Changes Act of 2024. (Public)
Sponsors: Representative Carson Smith.
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT MAKING ADMINISTRATIVE AND CONFORMING CHANGES TO THE LAWS
3 GOVERNING THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM,
4 THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM, THE
5 CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, THE LEGISLATIVE
6 RETIREMENT SYSTEM, AND RELATED STATUTES.
7 The General Assembly of North Carolina enacts:
8
9 PART I. CLARIFY EFFECT OF ELECTING THE OPTIONAL RETIREMENT
10 PROGRAM OR SIMILAR BENEFIT PLAN OFFERED BY THE UNIVERSITY OF
11 NORTH CAROLINA HEALTH CARE SYSTEM ON THE RECEIPT OF A
12 RETIREMENT ALLOWANCE UNDER THE TEACHERS' AND STATE EMPLOYEES'
13 RETIREMENT SYSTEM
14 SECTION 1. G.S. 135-3(a)(8) is amended by adding a new sub-subdivision to read:
15 "h. If a beneficiary who retired on an early or service retirement allowance
16 under this Article is reemployed by an employer with an option to elect
17 to participate in either the Optional Retirement Program or a similar
18 benefit to the Optional Retirement Program offered pursuant to
19 G.S. 116-350.30 or G.S. 116-360.15 and that beneficiary does elect to
20 participate in either program, then that beneficiary's retirement
21 allowance shall be suspended as of the first day of the month following
22 the month in which the beneficiary was reemployed. The beneficiary's
23 retirement allowance shall be reinstated as of the first day of the month
24 following the month in which the beneficiary ceases contributing
25 employment in the Optional Retirement Program or a similar benefit
26 to the Optional Retirement Program offered pursuant to
27 G.S. 116-350.30 or G.S. 116-360.15."
28
29 PART II. CHANGES ADDRESSING SEVERANCE PAY
30 SECTION 2.(a) G.S. 135-5 is amended by adding a new subsection to read:
31 "(a4) Effect of Severance Pay. – Notwithstanding any provision of this section to the
32 contrary, a member in receipt of severance pay from an employer is not eligible to receive a
33 retirement allowance under this Article while in receipt of that severance pay. If a member is
34 entitled to receive a lump sum severance payment based on a certain period of time, such as a
35 number of weeks or months, then the member is not eligible to receive a retirement allowance
36 under this Article for any month, beginning immediately after the member's separation from
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 General Assembly Of North Carolina Session 2023
1 service to that employer, that includes the time period used to determine the lump sum severance
2 payment."
3 SECTION 2.(b) G.S. 128-27 is amended by adding a new subsection to read:
4 "(a4) Effect of Severance Pay. – Notwithstanding any provision of this section to the
5 contrary, a member in receipt of severance pay from an employer is not eligible to receive a
6 retirement allowance under this Article while in receipt of that severance pay. If a member is
7 entitled to receive a lump sum severance payment based on a certain period of time, such as a
8 number of weeks or months, then the member is not eligible to receive a retirement allowance
9 under this Article for any month, beginning immediately after the member's separation from
10 service to that employer, that includes the time period used to determine the lump sum severance
11 payment."
12 SECTION 2.(c) G.S. 135-58 is amended by adding a new subsection to read:
13 "(f) Notwithstanding any provision of this section or G.S. 135-57 to the contrary, a
14 member in receipt of severance pay from an employer is not eligible to receive a retirement
15 allowance under this Article while in receipt of that severance pay. If, as severance, the member
16 is entitled to receive a lump sum payment based on a certain period of time, such as a number of
17 weeks or months, then the member is not eligible to receive a retirement allowance under this
18 Article for any month, beginning immediately after the member's separation from service to that
19 employer, that includes the time period used to determine the lump sum payment."
20 SECTION 2.(d) This section is effective January 1, 2025, and applies to members
21 in receipt of severance pay that begins on or after that date and to members entitled to receive a
22 lump sum payment based on a certain period of time that begins on or after that date.
23
24 PART III. CHANGES RELATED TO EMPLOYER REPORTING REQUIREMENTS
25 FOR THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM AND
26 THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM
27 SECTION 3.(a) G.S. 135-8(f) reads as rewritten:
28 "(f) Collection of Contributions. – The following shall apply to the collection of
29 contributions:
30 …
31 (3) In the event If the employee or employer contributions required under this
32 section section, including the information to be submitted in conjunction with
33 those contributions under subdivision (4) of this subsection, are not received
34 by the date set by the Board of Trustees and provided that a one-time exception
35 has not been agreed upon in advance due to exigent circumstances, then the
36 Board shall assess the employer with a penalty, in lieu of interest, of 1% per
37 month with a minimum penalty of twenty-five dollars ($25.00). The Board
38 may waive one penalty per employer every five years if the Board finds that
39 the employer has consistently demonstrated good-faith efforts to comply with
40 the set deadline. If within 90 days after request therefor for the contributions
41 or the required information by the Board any employer shall not have provided
42 the System with the required records and other information required hereunder
43 information, or if the full accrued amount of the contributions provided for
44 under this section due from members employed by an employer or from an
45 employer other than the State shall not have been received by the System from
46 the chief fiscal officer of such the employer within 30 days after the last due
47 date as herein provided, date, then, notwithstanding anything herein in this
48 section or in the provisions of any other provision of law to the contrary, upon
49 notification of the employer's default by the Board to the State Treasurer as to
50 the default of such employer as herein provided, Treasurer, any distributions
51 which might otherwise be made to such the employer from any funds of the
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 General Assembly Of North Carolina Session 2023
1 State shall be withheld from such the employer until notice from the Board to
2 the State Treasurer that such the employer is no longer in default.
3 In the event that an employer fails to submit payment of any required
4 contributions or payments to the Retirement Systems Division, other than the
5 one percent (1%) payment provided for in the first paragraph of this
6 subdivision, within 90 days after the date set by the Board of Trustees, the
7 Board shall notify the State Treasurer of its intent to collect the delinquent
8 contributions and other payments due to the Retirement Systems Division and
9 request an interception of State appropriations due to the participating
10 employer.
11 Except as provided in this subdivision, upon notification by the Board of
12 Trustees to the State Treasurer and the Office of State Budget and
13 Management as to the default of the employer, the Office of State Budget and
14 Management shall withhold from any State appropriation due to that employer
15 an amount equal to the sum of all delinquent contributions and other debts due
16 to the Retirement Systems Division and shall transmit that amount to the
17 Retirement Systems Division. For the purposes of this subsection, the date set
18 by the Board of Trustees for payment of the contribution-based benefit cap
19 liability shall be 12 months after the member's effective date of retirement, or
20 the first day of the month coincident with or next following six months after
21 the date of the invoice, whichever is later.
22 (4) In conjunction with the employee and employer contributions required under
23 this section, the Board of Trustees shall direct employers to submit such
24 information on a monthly basis as that is necessary for proper administration
25 of the Retirement System, actuarial valuation, and reporting under accounting
26 standards set forth by the Governmental Accounting Standards Board of the
27 Financial Accounting Foundation. This required information shall be
28 considered part of the employee and employer contributions required under
29 this section. The employee and employer contributions are not considered
30 received until the required information is submitted to the Retirement System.
31 Submission of such this information by an employer to the Retirement System
32 constitutes a certification of its accuracy.
33 …."
34 SECTION 3.(b) G.S. 128-30(g) reads as rewritten:
35 "(g) Collection of Contributions. – The following shall apply to the collection of
36 contributions:
37 …
38 (3) In the event If the employee or employer contributions required under this
39 section section, including the information to be submitted in conjunction with
40 those contributions under subdivision (4) of this subsection, are not received
41 by the date set by the Board of Trustees and provided that a one-time exception
42 has not been agreed upon in advance due to exigent circumstances, then the
43 Board shall assess the employer with a penalty, in lieu of interest, of 1% per
44 month with a minimum penalty of twenty-five dollars ($25.00). The Board
45 may waive one penalty per employer every five years if the Board finds that
46 the employer has consistently demonstrated good-faith efforts to comply with
47 the set deadline. If within 90 days after request therefor for the contributions
48 or the required information by the Board any employer shall not have provided
49 the System with the required records and other information required hereunder
50 information, or if the full accrued amount of the contributions provided for
51 under this section due from members employed by an employer or from an
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1 employer shall not have been received by the System from the chief fiscal
2 officer of such the employer within 30 days after the last due date as herein
3 provided, date, then, notwithstanding anything herein in this section or in the
4 provisions of any other provision of law to the contrary, upon notification of
5 the employer's default by the Board to the State Treasurer as to the default of
6 such employer as herein provided, Treasurer, any distributions which might
7 otherwise be made to such the employer, or the municipality or county of
8 which such the employer is an integral part, from any funds of the State or any
9 funds collected by the State shall be withheld from such the employer until
10 notice from the Board to the State Treasurer that such the employer is no
11 longer in default.
12 In the event that an employer fails to submit payment of any required
13 contributions or payments to the Retirement Systems Division, other than the
14 one percent (1%) payment provided for in the first paragraph of this
15 subdivision, within 90 days after the date set by the Board of Trustees, the
16 Board shall notify the State Treasurer of its intent to collect the delinquent
17 contributions and other payments due to the Retirement Systems Division and
18 request an interception of State appropriations due to the participating
19 employer.
20 Except as provided in this subdivision, upon notification by the Board of
21 Trustees to the State Treasurer and the Office of State Budget and
22 Management as to the default of the employer, the Office of State Budget and
23 Management shall withhold from any State appropriation due to that employer
24 an amount equal to the sum of all delinquent contributions and other debts due
25 to the Retirement Systems Division and shall transmit that amount to the
26 Retirement Systems Division. For the purposes of this subsection, the date set
27 by the Board of Trustees for payment of the contribution-based benefit cap
28 liability shall be 12 months after the member's effective date of retirement, or
29 the first day of the month coincident with or next following six months after
30 the date of the invoice, whichever is later.
31 (4) In conjunction with the employee and employer contributions required under
32 this section, the Board of Trustees shall direct employers to submit such
33 information on a monthly basis as that is necessary for proper administration
34 of the Retirement System, actuarial valuation, and reporting under accounting
35 standards set forth by the Governmental Accounting Standards Board of the
36 Financial Accounting Foundation. This required information shall be
37 considered part of the employee and employer contributions required under
38 this section. The employee and employer contributions are not considered
39 received until the required information is submitted to the Retirement System.
40 Submission of such this information by an employer to the Retirement System
41 constitutes a certification of its accuracy."
42 SECTION 3.(c) This section is effective January 1, 2025, and applies to employee
43 and employer contributions, and the information to be submitted in conjunction with those
44 contributions, required on or after that date.
45
46 PART IV. EFFECT OF THE DEATH OF A MEMBER OF THE LEGISLATIVE
47 RETIREMENT SYSTEM OCCURRING WHILE APPLYING FOR A RETIREMENT
48 ALLOWANCE
49 SECTION 4.(a) G.S. 120-4.26 reads as rewritten:
50 "§ 120-4.26. Benefit payment options.
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1 (a) Any member may elect to receive their benefits in a retirement allowance payable
2 throughout life, or the member may elect to receive the actuarial equivalent of the retirement
3 allowance in a reduced allowance payable throughout life under the provisions of one of the
4 options set forth below. in this section. No election may be made after the first payment becomes
5 normally due and the first payment date has occurred, nor may an election be revoked or a
6 nomination changed. changed, except as provided for by this section.
7 (b) If a member dies after the effective date of retirement for which the member has been
8 approved, then one of the following shall apply:
9 (1) If the Board of Trustees has received an election of benefits under this section
10 that is properly filed and acknowledged by the member and the member dies
11 before the date when the first payment on account of any benefit normally
12 becomes due and