H.B. 777
GENERAL ASSEMBLY OF NORTH CAROLINA
Apr 15, 2019
SESSION 2019 HOUSE PRINCIPAL CLERK
H D
HOUSE BILL DRH40053-MRp-13
Short Title: Purchase Opt/Credit for Prior Year FT Service. (Public)
Sponsors: Representatives Belk, Gill, Hurley, and Martin (Primary Sponsors).
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO ALLOW FOR THE PURCHASE OF CREDITABLE SERVICE IN THE
3 TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM AND THE LOCAL
4 GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM FOR SERVICE IN A
5 PRIOR YEAR WHEN THAT SERVICE WAS ASSUMED TO BE PART-TIME BUT WAS
6 ACTUALLY FULL-TIME SERVICE.
7 The General Assembly of North Carolina enacts:
8 SECTION 1.(a) G.S. 135-4 is amended by adding a new subsection to read:
9 "(p2) Credit For Prior Year Full-time Service. – An individual who was not eligible to earn
10 membership service in a calendar year due to the anticipation that the individual would not meet
11 the definition of employee under G.S. 135-1 because that individual would not work at least 30
12 hours per week for nine or more months in that calendar year may purchase creditable service
13 for that calendar year if that individual did work at least 30 hours per week for nine or more
14 months in that calendar year. The following requirements apply to this purchase of creditable
15 service:
16 (1) No later than January 31 of each year, all employers shall provide written
17 notification of the total hours worked in the preceding calendar year to any
18 individual who worked at least 30 hours per week for nine or more months in
19 the preceding calendar year who was classified as part-time and who was not
20 eligible to earn membership service due to that classification. Employers must
21 send a copy of each notification to the Retirement Systems Division no later
22 than January 31 of each year.
23 (2) An individual who received the written notification under subdivision (1) of
24 this section may purchase the applicable amount of creditable service based
25 upon the hours that the individual actually worked in the preceding calendar
26 year. The creditable service must be purchased as a lump sum in an amount
27 equal to the employee contributions that would have been required had the
28 individual been earning membership service in that preceding calendar year.
29 Purchases made under this subdivision must be made and paid in full within
30 30 days of receipt of the written notification. Any service not purchased by
31 this deadline may be eligible for purchase under subsection (p1) of this
32 section.
33 (3) Upon receipt of the full payment as required by subdivision (2) of this
34 subsection, the Retirement Systems Division shall issue an invoice to the
35 employer in the amount that the employer would have contributed had the
36 individual been earning membership service in the preceding calendar year.
*DRH40053-MRp-13*
General Assembly Of North Carolina Session 2019
1 (4) Employers of any individual purchasing service credit under this section shall
2 remit in one lump sum the amount that the employer would have contributed
3 had the individual been earning membership service in the preceding calendar
4 year. Payments must be made and paid in full within 30 days of receipt of the
5 invoice from the Retirement Systems Division under subdivision (3) of this
6 subsection.
7 (5) The cumulative amount of creditable service purchased under this subsection
8 may not exceed a total of five years.
9 (6) This subsection does not apply to retired members."
10 SECTION 1.(b) G.S. 128-26 is amended by adding a new subsection to read:
11 "(p1) Credit For Prior Year Full-time Service. – An individual who was not eligible to earn
12 membership service in a calendar year due to the anticipation that the individual would not meet
13 the definition of employee under G.S. 128-21 because that individual held a position that was
14 anticipated to require less than 1,000 hours work in that calendar year may purchase creditable
15 service for that calendar year if that individual did work at least 1,000 hours in that calendar year.
16 The following requirements apply to this purchase of creditable service:
17 (1) No later than January 31 of each year, all employers shall provide written
18 notification of the total hours worked in the preceding calendar year to any
19 individual who worked at least 1,000 hours in the preceding calendar year who
20 was classified as part-time and who was not eligible to earn membership
21 service due to that classification. Employers must send a copy of each
22 notification to the Retirement Systems Division no later than January 31 of
23 each year.
24 (2) An individual who received the written notification under subdivision (1) of
25 this section may purchase the applicable amount of creditable service based
26 upon the hours that the individual actually worked in the preceding calendar
27 year. The creditable service must be purchased as a lump sum in an amount
28 equal to the employee contributions that would have been required had the
29 individual been earning membership service in that preceding calendar year.
30 Purchases made under this subdivision must be made and paid in full within
31 30 days of receipt of the written notification. Any service not purchased by
32 this deadline may be eligible for purchase under subsection (p) of this section.
33 (3) Upon receipt of the full payment as required by subdivision (2) of this
34 subsection, the Retirement Systems Division shall issue an invoice to the
35 employer in the amount that the employer would have contributed had the
36 individual been earning membership service in the preceding calendar year.
37 (4) Employers of any individual purchasing service credit under this section shall
38 remit in one lump sum the amount that the employer would have contributed
39 had the individual been earning membership service in the preceding calendar
40 year. Payments must be made and paid in full within 30 days of receipt of the
41 invoice from the Retirement Systems Division under subdivision (3) of this
42 subsection.
43 (5) The cumulative amount of creditable service purchased under this subsection
44 may not exceed a total of five years.
45 (6) This subsection does not apply to retired members."
46 SECTION 2. This act becomes effective January 1, 2021, and applies to the purchase
47 of service for work performed on or after January 1, 2020.
Page 2 DRH40053-MRp-13
Statutes affected: Filed: 135-4, 128-26
Edition 1: 135-4, 128-26
Edition 2: 135-4, 128-26, 116B-3, 29-12, 116B-64, 116B-75, 116B-60, 116B-63, 135-6, 135-48.8, 135-48.40, 135-66, 127A-40, 135-8, 128-30, 159-33.1, 135-18.1, 135-5.2, 135-13, 135-14, 135-14.1, 135-16, 135-18.3, 135-18.5, 135-16.1, 128-23, 115D-25.4, 135-6.1, 128-33.1, 135-48.47, 147-69.7, 1-359, 159G-20, 159G-22, 159G-30, 159G-31, 159G-32, 159G-35, 159G-36, 159G-37, 159G-39
Edition 3: 135-4, 128-26, 116B-3, 29-12, 116B-64, 116B-75, 116B-60, 116B-63, 135-6, 135-48.8, 135-48.40, 135-66, 127A-40, 135-8, 128-30, 159-33.1, 135-18.1, 135-5.2, 135-13, 135-14, 135-14.1, 135-16, 135-18.3, 135-18.5, 135-16.1, 128-23, 115D-25.4, 135-6.1, 128-33.1, 135-48.47, 147-69.7, 1-359, 147-68, 159G-20, 159G-22, 159G-30, 159G-31, 159G-32, 159G-35, 159G-36, 159G-37, 159G-39