Except for the applications of the provisions of G.S. 110-136, and G.S. 110-136.3 et seq., and in connection with a court-ordered equitable distribution under G.S. 50-20, the right of a person to a pension, or annuity, or a retirement allowance, to the return of contributions, the pension, annuity or retirement allowance itself, any optional benefit or any other right accrued or accruing to any person under the provisions of this Chapter, and the moneys in the various funds created by this Chapter, are exempt from levy and sale, garnishment, attachment, or any other process whatsoever, and shall be unassignable except as in this Chapter specifically otherwise provided. Notwithstanding any provisions to the contrary, any overpayment of benefits to a member in a State-administered retirement system or the former Disability Salary Continuation Plan or the Disability Income Plan of North Carolina may be offset against any retirement allowance, return of contributions or any other right accruing under this Chapter to the same person, the person's estate, or designated beneficiary.
(1941, c. 25, s. 9; 1985, c. 402, s. 1; c. 649, s. 5; 1987, c. 738, s. 29(k); 1989, c. 665, s. 1; c. 792, s. 2.5.)
Legal Periodicals. - For comment on this enactment, see 19 N.C.L. Rev. 519 (1941).
CASE NOTES
The language of this section is clear and unequivocal. A person's rights to state employee retirement benefits are not assignable. Reynolds v. North Carolina State Employees Credit Union, 31 Bankr. 296 (Bankr. E.D.N.C. 1983).
This section and G.S. 50-20(b)(3) do not require entry of a Qualified Domestic Relations Order to assign a retirement plan; therefore, the plain language of a property settlement agreement incorporated into a consent order served to secure ex-wife's twenty percent interest in her ex-husband's state university retirement plan. Patterson ex rel. Jordan v. Patterson, 137 N.C. App. 653, 529 S.E.2d 484 (2000).
G.S. 1C-1601(c) does not preclude the use of this section by a bankruptcy debtor to claim an exemption in state employee retirement benefits. In re Hare, 32 Bankr. 16 (Bankr. E.D.N.C. 1983).
The designation of "retirement" as "other collateral" on loan document was clearly misleading, since the "retirement" account of a state employee is unassignable, and therefore not available as a source of security to a creditor. Petersen v. State Employees Credit Union (In re Kittrell), 115 Bankr. 873 (Bankr. M.D.N.C. 1990).
Credit union deceived borrower by purporting to have enforceable security interest in retirement accounts. Practices and actions of credit union in deceiving borrower into thinking that credit union had a valid, enforceable security interest in his retirement account by inserting the word "retirement" in the "other collateral" block on front of loan documents and having debtor sign documents at the time of making his first loan, which authorized the sending of employee's retirement checks to the credit union and depositing therein and the filing away of these forms and applying them to all loans made thereafter violated public policy of protecting the retirement accounts of teachers and other state employees. Petersen v. State Employees Credit Union (In re Kittrell), 115 Bankr. 873 (Bankr. M.D.N.C. 1990).
Cited in Wells v. Consolidated Judicial Retirement Sys., 136 N.C. App. 671, 526 S.E.2d 486 (2000), aff'd, 354 N.C. 313, 553 S.E.2d 877 (2001).