(a) Notwithstanding any other provision of law, every sworn law-enforcement officer as defined by G.S. 135-1(11b) or G.S. 143-166.30(a)(4) employed by a State department, agency, or institution who qualifies under this section shall receive, beginning in the month in which he retires on a basic service retirement under the provisions of G.S. 135-5(a) or G.S. 143-166(y), an annual separation allowance equal to eighty-five hundredths percent (0.85%) of the annual equivalent of the base rate of compensation most recently applicable to him for each year of creditable service. The allowance shall be paid in equal installments on the payroll frequency used by the employer. To qualify for the allowance the officer shall:
(1) Have (i) completed 30 or more years of creditable service or, (ii) have attained 55 years of age and completed five or more years of creditable service; and
(2) Not have attained 62 years of age; and
(3) Have completed at least five years of continuous service as a law enforcement officer as herein defined immediately preceding a service retirement. Any break in the continuous service required by this subsection because of disability retirement or disability salary continuation benefits shall not adversely affect an officer's qualification to receive the allowance, provided the officer returns to service within 45 days after the disability benefits cease and is otherwise qualified to receive the allowance.
(b) As used in this section, "creditable service" means the service for which credit is allowed under the retirement system of which the officer is a member, provided that at least fifty percent (50%) of the service is as a law enforcement officer as herein defined.
(c) Payment to a retired officer under the provisions of this section shall cease at the first of:
(1) The death of the officer;
(2) The last day of the month in which the officer attains 62 years of age; or
(3) The first day of reemployment by any State department, agency, or institution, except that this subdivision does not apply to an officer returning to State employment in a position exempt from the State Personnel Act in an agency other than the agency from which that officer retired.
(d) This section does not affect the benefits to which an individual may be entitled from State, federal, or private retirement systems. The benefits payable under this section shall not be subject to any increases in salary or retirement allowances that may be authorized by the General Assembly for employees of the State or retired employees of the State.
(e) The head of each State department, agency, or institution shall determine the eligibility of employees for the benefits provided herein.
(f) The Director of the Budget may authorize from time to time the transfer of funds within the budgets of each State department, agency, or institution necessary to carry out the purposes of this Article. These funds shall be taken from those appropriated to the department, agency, or institution for salaries and related fringe benefits.
(g) The head of each State department, agency, or institution shall make the payments set forth in subsection (a) to those persons certified under subsection (e) from funds available under subsection (f).
(1983 (Reg. Sess., 1984), c. 1034, s. 104; 1985, c. 479, s. 143; 1985 (Reg. Sess., 1986), c. 1014, ss. 51, 52; 2002-126, s. 28.14; 2007-69, s. 1.)
Editor's Note. - Section 143-166, referred to in subsection (a) of this section, was repealed by Session Laws 1985, c. 479, s. 196(t), effective January 1, 1986. See now G.S. 143-166.50, 143-166.60.
Effect of Amendments. - Session Laws 2007-69, s. 1, effective July 1, 2007, in the introductory language of subsection (a), substituted "beginning in" for "beginning on the last day of" in the first sentence and "equal installments on the payroll frequency used by the employer" for "12 equal installments on the last day of each month" in the second sentence.
CASE NOTES
Amount of Separation Allowance Mandatory. - This statute permits local governments to determine eligibility and requires them to make payments, but it does not authorize local governments to determine the amount of the separation allowance differently from the mandate of subsection (a). Bowers v. City of High Point, 339 N.C. 413, 451 S.E.2d 284 (1994).
Eligibility. - Since the initial eligibility requirement for a separation allowance under G.S. 143-166.41 was that police officers retire on a service retirement, police officer was not eligible because he retired on a disability retirement. Cochrane v. City of Charlotte, 148 N.C. App. 621, 559 S.E.2d 260 (2002), cert. denied, 356 N.C. 160, 568 S.E.2d 189 (2002).
Police officer who retired on disability retirement was not eligible for a special separation allowance because he did not retire on a service retirement and was, therefore, not among the class of persons statutorily eligible for a special separation allowance. Cochrane v. City of Charlotte, 148 N.C. App. 621, 559 S.E.2d 260 (2002), cert. denied, 356 N.C. 160, 568 S.E.2d 189 (2002).
Creditable Service. - When a police officer retired on disability retirement, his time spent on disability retirement could not be considered "creditable service" for purposes of determining eligibility for a special separation allowance. Cochrane v. City of Charlotte, 148 N.C. App. 621, 559 S.E.2d 260 (2002), cert. denied, 356 N.C. 160, 568 S.E.2d 189 (2002).
"Base rate of compensation" refers to that portion of compensation which is relatively stable and forms the foundation or groundwork of the employee's entire compensation scheme; this would generally be the minimum amount of compensation to which the employee is entitled in any given pay period relatively independent of factors other than the employment relationship itself. Bowers v. City of High Point, 339 N.C. 413, 451 S.E.2d 284 (1994).
In this section "base rate of compensation" has a definite meaning not subject to alteration by local governments and does not include overtime pay, longevity pay, or pay for unused accrued vacation. Bowers v. City of High Point, 339 N.C. 413, 451 S.E.2d 284 (1994).
Authority of Municipalities. - This section and G.S. 143-166.42 do not authorize municipalities to make separation allowances based on overtime pay, longevity pay, and accrued vacation. Bowers v. City of High Point, 339 N.C. 413, 451 S.E.2d 284 (1994).
Establishing reemployment by another local government as grounds for cessation of the payment of a separation allowance pursuant to G.S. 143-166.42 is within a city's authority; G.S. 143-166.42 does not allow the city to determine the amount of the payment but does permit it to determine a retiree's eligibility. Campbell v. City of Laurinburg, 168 N.C. App. 566, 608 S.E.2d 98 (2005).
Pursuant to the plain and unambiguous language of G.S. 143-166.42, as well as of G.S. 143-166.41 upon which it was based, the actions of a county and a county board of commissioners in entering into a contractual relationship with a retired local law enforcement officer, wherein he was to receive a special separation allowance, were legislatively authorized; accordingly, such was not an ultra vires act on the part of the county entities. Wiggs v. Edgecombe County, 361 N.C. 318, 643 S.E.2d 904 (2007).
Reemployment By Local Government. - Retired city police officer lost his right to receive a separation allowance pursuant to G.S. 143-166.42 when he became reemployed by a county sheriff's office, which was a local government as defined by G.S. 143-166.41. Campbell v. City of Laurinburg, 168 N.C. App. 566, 608 S.E.2d 98 (2005).
Establishing reemployment by another local government as grounds for cessation of the payment of a separation allowance pursuant to G.S. 143-166.42 is within a city's authority; G.S. 143-166.42 does not allow the city to determine the amount of the payment but does permit it to determine a retiree's eligibility. Campbell v. City of Laurinburg, 168 N.C. App. 566, 608 S.E.2d 98 (2005).
Resolution Restricting Vested Allowance was Improper. - County's resolution, pursuant to its authority under G.S. 143-166.42, restricting a former officer's ability to collect a special separation allowance, impaired the obligation of the state's contract with former officer under the retirement system; because the resolution was enacted after the former officer had retired and his right to receive the special separation had become vested, it was improper. Wiggs v. Edgecombe County, 179 N.C. App. 47, 632 S.E.2d 249 (2006).
Cited in BellSouth Telecomms., Inc. v. City of Laurinburg, 168 N.C. App. 75, 606 S.E.2d 721, cert. denied, - N.C. - , 615 S.E.2d 660, cert. denied, 359 N.C. 629, - S.E.2d - (2005); Finger v. Gaston County, 178 N.C. App. 367, 631 S.E.2d 171 (2006).