Retirement Systems Division Frequently Asked Questions
Vesting, Terminations, Refunds, and Interest
When am I vested in the Retirement Systems?
You become vested once you have completed a minimum of five years of retirement service credit with the Retirement Systems. This means that you are eligible to apply for lifetime monthly retirement benefits based on the retirement formula, and the age and service requirements of the Retirement System in which you participate, provided you do not withdraw your contributions.
I am leaving my job. Should I withdraw my retirement contributions or leave them in?
The correct answer to this question is usually dependent on three things: (i) whether you anticipate a return to employment covered by either the State or Local Governmental Retirement System; ii) whether you have accumulated five years of retirement service credit; and (iii) your age. The best way to give a general answer is as follows: If you are reasonably sure that it is unlikely you will ever accumulate five years of service credit, you may be better served by withdrawing your contributions due to the fact that, with less than five years of service credit, you do not qualify for a monthly benefit, nor will you be paid any interest on your refund. If you have accumulated five years of service or anticipate accumulating five years, you should consider how long it will be before you will be eligible to receive a monthly benefit (and possible free individual health insurance if retiring from the Teachers’ and State Employees’ Retirement System). If you are close to meeting the eligibility requirements for retirement, you may wish to consider leaving your contributions in the Retirement System so that you may receive a monthly benefit when you become eligible.
Why must I wait 60 days in order to receive a refund of MY contributions from the Retirement System?
The 60-day period is required by state law and generally provides the Retirement System with sufficient time to receive and process your individual contribution (payroll) information provided to us by your former employer. This period of time insures that you are paid all of your contributions. It also gives you time to consider your decision.
I am terminating my employment. When should I apply for my monthly retirement benefits?
If you are no longer working in a position covered by the Retirement System, as a general rule you should apply for your monthly benefit as soon as you become eligible, whether you will be in receipt of an unreduced service retirement allowance or early, reduced benefits. Historically, post-retirement benefit increases have significantly reduced, or completely eliminated, the difference between the amount of your benefit should you begin reduced benefits as soon as possible as opposed to delaying the payment of your benefits until a later date. Also, when you begin receiving a monthly benefit from the Teachers’ and State Employees’ Retirement System, you will be eligible to enroll in the State Health Plan if you have contributed to the Teachers’ and State Employees’ Retirement System for at least five years while employed as a teacher or State employee. If you are a local governmental employee or retiree, you should consult your employer for information about possible health insurance coverage as a retiree.
Why doesn’t the Retirement System credit my account with a higher rate of interest?
The basic purpose of the Retirement System is to provide monthly retirement benefits to career employees. The Retirement System is a “defined benefit plan” which means that the benefit you receive at retirement is based on a defined formula. The formula is (i) the average of your highest consecutive four years of salary (average final compensation), times (ii) an accrual rate established by the North Carolina General Assembly, times (iii) your years of creditable service. The contributions and interest accumulated in your account have no direct relationship to the basic benefit you will receive at retirement. Higher interest rates on contributions would benefit only those employees who terminate employment and withdraw their contributions. In order to pay a higher interest rate on member contributions, the Retirement System would have to use funds which would otherwise be used to enhance retirement benefits for career employees.
Why does the Retirement System not pay interest on my refund of contributions if I have less than 5 years of creditable service?
In 1981, the North Carolina General Assembly amended the general statutes to eliminate the payment of interest to persons withdrawing their contributions with less than five years of membership service. (Refer to question above for further explanation.)
If I elect to receive a refund of my contributions, will I receive the matching contributions paid by my employer to the Retirement System?
No. Employer contributions remain in the Retirement System for payment of future retirement benefits for career employees. Since employee and employer accounts are maintained separately, you will not reap the benefit of monies paid to the Retirement System by your employer until you begin receiving a monthly retirement allowance. The employer rate of contributions to the Retirement System is adjusted periodically to reflect the necessary funding to provide future benefits.
Retirement Calculations - Vacation and Sick Leave
When I left my previous governmental employer, I had accumulated unused sick leave. When I retire, may I combine my previous sick leave balance with my former employer to my current leave balance
in order to increase my total creditable service?
At the time you retire, your current employer will certify to the Retirement System the amount of sick leave you have on your retirement application. The sick leave which is used to increase your creditable service is leave that is earned monthly and for which you would receive full salary if you were absent from work on account of sickness. Therefore, if any of your sick leave is not fully creditable for “sick pay” purposes at the time you retire, then that portion is not creditable for retirement purposes.
How are accumulated unused sick leave, and final payments for unused vacation leave and/or prorated longevity used in calculating my monthly retirement benefit?
Unused sick leave, as described above, increases your creditable service at the rate of one month for each 20 days of unused leave. An additional month of creditable service is allowed for any part of 20 days left over, provided the remaining portion is at least one hour. If your four highest-paid years in a row include a final payment for unused vacation leave and/or prorated longevity, your average final compensation may be increased by the extra payment(s), thus increasing your monthly retirement benefit.
Do I actually have to work the last day of my employment before the effective date of retirement or can I use sick or vacation leave for the day?
Nothing in the retirement laws or regulations requires that you actually work the last working day before the effective date of your retirement. If you are a State employee, it is our understanding from the Office of State Personnel that when you separate from service to retire on an early or service retirement, vacation and leave can be earned or exhausted from the last day you worked until the effective date of your retirement. Please contact your benefits office for more specific information.
Will I qualify for an unreduced retirement benefit when the sum of my age and creditable service equal 85?
No. Under current law, there is no “rule of 85” (meaning your service plus age equals 85) to receive an unreduced, service retirement allowance. You must be at least age 60 and have at least 25 years of creditable service. You may, however, use your unused sick leave to complete your service requirement of 25 years. Your sick leave cannot, however, be used to make you older.
May I use sick leave to complete 30 years of creditable service regardless of my age?
Yes.
Purchasing Additional Creditable Service
Why are certain types of creditable service that can be purchased more expensive than other types?
State law specifies how the cost of each type of creditable service that may be purchased is calculated. The state and local system member employers have elected to participate in the cost to purchase military service during certain periods and under certain circumstances, and they have also elected to participate in the cost for repayment of previously withdrawn accounts. Most additional service purchases, however, must be paid for entirely by the member.
Are rollovers from other retirement plans accepted to purchase retirement service credit?
Effective January 1, 2003, pre-tax money from an eligible retirement plan or an eligible IRA may be accepted via rollover or in-service plan-to-plan transfer to purchase creditable service. For further information and instructions, please see Form 398, "Using a Distribution of Tax-Sheltered Savings to Purchase Retirement Credit."
Applying For Monthly Retirement Benefits
Once you decide to retire and meet the eligibility requirements for monthly benefits, there are certain steps which must be taken to begin the retirement process.
Monthly retirement benefits are effective the first day of any month; however, a retirement application must be signed, dated, and filed at least one day and not more than 120 days prior to the effective date of retirement.
Approximately 90 to 120 days before your planned retirement date, you should complete a Form 6, "Claiming Your Monthly Retirement Benefit." Please see the guides on the Form 6 for additional detailed information about the retirement process.
If you contribute to the Retirement System during the six months before your effective date of retirement, your employer should complete the employer certification section (Section H) of the Form 6, "Claiming Your Monthly Retirement Benefit," before the form is sent to the Retirement System.
If you have contributed to the Retirement System during the six months before your effective date of retirement and your employer has not completed the employer certification section, the Retirement System will then have to request this information from your employer, which will delay the processing of your application.
Upon receipt of your Form 6, "Claiming Your Monthly Retirement Benefit," the Retirement System will send you an acknowledgment letter which will include instructions on your next steps in the retirement process. You will also be sent a Form 170, “Authorizing Direct Deposit,” and, if you are a Teachers' and State Employees' Retirement System retiree, you will be sent a Form HM, “Selecting Health Coverage Through The State Health Plan.”
In addition, you will have an opportunity to elect coverage under the optional $10,000 Contributory Death Benefit for Retired Members. Your election must be made within 60 days from the effective date of your retirement. Information about the cost and coverage provisions will be sent to you shortly after the Retirement System receives your retirement application.
You will later receive an estimate of the maximum allowance you can receive and the payment options. Along with the estimates, you will receive a Form 6E: “Choosing Your Retirement Payment Option” (Form 6E sample) and "Choosing Income Tax Withholding Preferences" form (Form 290).
On the “Choosing Your Retirement Payment Option” form (Form 6E sample), you will choose your payment plan. Return the completed Form 6E directly to the Retirement System. Please note that the Retirement System will not be able to pay monthly retirement benefits to you until we have received your properly completed Form 6E. Please also note that if you elect not to respond within 90 days after preliminary option figures for retirement and Form 6E have been mailed to you, then your Form 6, “Claiming Your Monthly Retirement Benefit," is void and a new Form 6 must be filed.
Finally, you will receive a Form 336, "Designating Beneficiary(ies) for the Guaranteed Refund as a Retiree."
Will I lose benefits if I am late filing my retirement application?
Monthly retirement benefits are effective the first day of any month. A retirement application must be signed, dated, and filed at least one day and not more than 120 days prior to the effective date of retirement.
A delay in filing the Form 6, “Claiming Your Monthly Retirement Benefit,” could delay the first benefit payment. Since the Retirement System processes retirement applications based on the date they are received, the earlier that you file the Form 6 (within the 120-day period), the sooner you will receive the “Choosing Your Retirement Payment Option” form (Form 6E sample) from our office. In other words, even though you are eligible to file your retirement paperwork just one day prior to the effective date of your retirement, the likelihood of your receiving payment of your retirement benefit within the same month of your effective retirement is greatly diminished. If retroactive benefits are payable, your first benefit payment will then include the amount that you are retroactively entitled to receive as of your effective date of retirement. Therefore, we recommend that after you have made your decision to retire, that you file your Form 6 as close to the 120-day advance period as possible in order to increase the likelihood of receiving a retirement payment within the month for which your retirement is effective.
Please also note that if you elect not to respond within 90 days after preliminary option figures for retirement and Form 6E have been mailed to you, then your “Claiming Your Monthly Retirement Benefit” form, Form 6 is void and a new Form 6 must be filed.
Which optional payment arrangement should I elect at retirement?
The optional payment arrangement you elect at retirement is a personal decision. In making this decision, you should consider your financial needs, the possible financial needs of your beneficiary, if any, your health and the health of your beneficiary. Your decision should never be based on what other members have previously done. For more information about the optional payment arrangements available to you, visit our “Estimate of Benefits” program.
May I change the beneficiary or optional payment plan I selected at any time during the retirement process or after retirement?
You can change your beneficiary for a monthly survivor benefit or payment option at any time prior to cashing your first retirement check but no later than the 25th of the month following the month your first check is mailed. After this time, you will not be allowed to change your beneficiary or payment option, unless: (i) you have elected a survivorship benefit and your beneficiary is your spouse from whom you become divorced after retirement, or (ii) you return to employment covered by the Retirement System from which you retired and contribute to a new retirement account for at least three years. Also, under Option 2 (100% survivorship) and Option 3 (50% survivorship), if at retirement you designated your spouse for your survivor benefits and this spouse dies before you, and you subsequently remarry, you may name your new spouse as your beneficiary within 90 days of your marriage (and if this change is properly filed with the Retirement System within 120 days of remarriage) under the same option with an additional reduction in your benefit amount. As a retiree, you can change your beneficiary for the guaranteed refund at any time by completing and submitting Form 336. "Designating Beneficiary(ies) for the Guaranteed Refund as a Retiree" to the Retirement System.
I had been retired just a few months when the amount of my retirement benefit changed. Why?
Your retirement benefit is generally based, in part, upon the salary earned and reported to the Retirement System during your last 48 months of employment. Many times, verification of the salary paid for your final month of employment is not received in the Retirement Systems Division until after your first retirement payment has been issued. Consequently, your retirement benefit must be adjusted, either up or down, in the event projected salary figures (provided by your employer prior to your retirement) do not equal the actual payments of salary you received.
Teachers' and State Employees' Health Coverage
Will the State pay for my health insurance coverage after I retire?
When you retire under the Teachers’ and State Employees’ Retirement System (TSERS), you are eligible for coverage under the State Health Plan if you have at least five years of retirement membership service earned as a teacher or state employee. (Credit for unused sick leave or credit transferred from the Local Governmental Employees’ Retirement System does not count toward this five-year requirement.)
Under current law, if you were first hired prior to 10/1/06, and retire with five or more years of TSERS membership service, the State will pay for your individual coverage under one of the Preferred Provider Organization (PPO) plans. Based on the conditions described above, if you were first hired on or after 10/1/06, in order to receive individual coverage at no cost, you must retire with 20 or more years of retirement service credit; if you have 10 but less than 20 years of retirement service credit, you will have to pay 50% of the cost for your coverage, and with five but less than 10 years, you will have to pay the full cost for your coverage. In all cases, the full cost of dependent coverage, if elected, must be paid by you.
The Guidance on State Health Plan Changes Effective October 2006 goes into greater detail about this question.
May I continue to cover my spouse as a dependent on my health insurance policy?
Yes. Dependent coverage is available provided you pay the appropriate cost. In the event of your death, your surviving spouse and/or dependent children may continue coverage by paying the appropriate cost of the coverage, provided you are covering your spouse as a dependent at the time of your death. The surviving spouse and/or dependent children will be contacted by the State Health Plan for enrollment for full contributory coverage as a survivor's benefit, should they choose to continue coverage.
Must I complete an application form for health insurance coverage when I apply for retirement even though I have been covered and am not changing insurance carriers?
Yes. Changing your coverage from the active group to the retiree group is not automatic. You must complete an health coverage form (Form HM) to enroll in the retired group. Also, please note that the retiree group coverage begins on the first day of the month following the effective date of retirement. For example, if your effective date of retirement is January 1, 2008, your retiree group health coverage will begin on February 1, 2008. If you work through the end of the month prior to your effective date of retirement, generally your employer will pay (under current law) for your individual coverage during your first month of retirement.
Why should I elect Part B of Medicare?
As a retiree, when you or a covered dependent become eligible for Medicare, both parts A and B must be elected in order to maintain the same level of coverage you had before becoming Medicare eligible.
I am having difficulty getting my health insurance carrier to pay some of my medical bills. Can the Retirement System help me with this problem?
Although the Retirement Systems Division has been designated as the Health Benefits Representative (HBR) for retired teachers and state employees, our duties do not include claims processing or appeals. As the HBR, the Retirement Systems Division is responsible for processing the enrollment forms of new retirees, reporting type-of-contract changes, determining premium amounts, making premium deductions from retirement benefits checks, reconciling group billings, and remitting premiums to the claims processing contractor. Claims disputes should be resolved in accordance with the procedures outlined in the booklet provided by the claims processing contractor.
The 1997 session of the General Assembly created a long-term care program for retired employees who receive monthly benefits from the Teachers’ and State Employees’ Retirement System and the Local Governmental Employees’ Retirement System. Can you give me information about this Plan?
This program is administered by the State Health Plan. Information about this program is available through the State Health Plan, the coverage provider, and the Retired Governmental Employees’ Association.
Local Government Employees' Health Coverage
As a retired member of the Local Governmental Employees’ Retirement System, am I eligible for health insurance coverage through the Retirement System?
No. Health insurance coverage for retired members is not provided through the Local Governmental Employees’ Retirement System. You should, however, check with your former employer about the availability of health insurance coverage, if any, for its retired employees.
Direct Deposit
When will my monthly retirement payment be deposited in my account?
Benefits are deposited on the 25th of each month unless the 25th is on the weekend or a holiday. In that case, your benefit will be deposited on the last business day before the weekend or holiday. In December, however, your benefit will be deposited on the 20th or before if the 20th is on a weekend.
Do I receive a “Notification of Direct Deposit” of my retirement benefit payment every month?
No. Effective April 2009, “deposit notification” statements for benefit recipients – retirees, beneficiaries and disability recipients – will only be available through the ORBIT system. Statements will no longer be mailed. Prior to April 2009, direct deposit statements were mailed just a few times a year when there was a change in members’ deductions, or gross or net benefit amounts.
Accessing statements through ORBIT is a cost saving measure that reduces paper, and also enhances members’ personal security by eliminating mailings with social security or member identification numbers. ORBIT is a secure Web site that provides you with access to your personal retirement account 24 hours a day.
Should this change in process present a hardship for benefit recipients because they do not have access to a computer or the Internet, members should contact Member Services at 1-877-733-4191 (toll-free) or 919-733-4191 (Raleigh area only) to opt-out of electronic statements.
To access your monthly statement through ORBIT, follow these instructions:
How to Access Your Benefit Statement
Access your benefit statement through ORBIT by clicking on the “ORBIT” button from the "Retirement" drop-down menu above. You will be directed to the log-in page to register, or log-in if you’ve already registered. Once logged on to your personal ORBIT account, you may print out your statement.
How do I notify the Retirement System of a change in the account to which my monthly payment is being deposited?
In order to change your bank account designation, you should complete a Form 170, "Authorizing Direct Deposit," signed by you, that includes your name, Member ID Number, and the route transit number for the new financial institution (a deposit slip or voided check has this information). Requests that are received in our office by the last business day of the month will be processed the following month.
What if I notice an error or have a question about deductions coming out of my check?
Pay close attention to the deductions coming out of your benefit payments each month. If you feel there is an error or you have a question, please contact Member Services at 1-877-733-4191 (toll-free) or 919-733-4191 (Raleigh area only).
Post-Retirement Increases
When will I qualify for a post-retirement increase and how much will it be?
All post-retirement increases are provided by action of the North Carolina General Assembly and/or the board of trustees governing the Retirement System. Although post-retirement increases are not guaranteed, they are typically provided at July 1 of each year and are paid as a percentage increase in benefits.
New retirees who have been retired for less than a year generally receive a prorated increase based on how long they have been retired since the legislation passed. For example, if a 2.2% cost-of-living increase is effective July 1, a member who has been retired for 11 months will receive a 2.0167% increase.
Income Taxes
Are my retirement benefits subject to North Carolina income tax?
As a result of the “Bailey” tax case, retirement benefits that are payable to members of the Retirement System who have maintained five or more years of retirement service credit as of August 12, 1989, are not subject to North Carolina income tax. If you did not have five years of maintained retirement service credit as of August 12, 1989, your retirement benefits are subject to North Carolina income tax, less a $4,000.00 annual exclusion when you file your North Carolina income tax return. The taxable portion is equal to the portion of your benefit that is taxable for federal tax purposes.
Do I have to pay Federal or North Carolina income tax on my retirement contributions on which I have already paid income tax?
No. Retirement contributions which have been previously taxed will not be taxed again. If you have previously paid tax on all or some of your contributions, a very small portion of your retirement benefit will be excluded from federal income taxes each month for your expected lifetime. When you receive your annual 1099-R from the Retirement System, the non-taxable and taxable portions are shown for tax purposes.
Block 5 on my income tax form 1099-R, which I received from the Retirement System, includes an amount described as "Non-Taxable amount." What does this mean?
The amount shown in Block 5 of a 1099-R issued by the Department of State Treasurer is the amount of retirement contributions paid by you that is not taxable.
Why is no federal tax being withheld from my monthly retirement benefit even though I checked the box on the Form 290, "Choosing Income Tax Withholding Preferences” requesting federal tax withholding?
The Retirement System withholds federal tax from your monthly benefit based upon the taxable amount of your monthly benefit, the standard withholding tables, your marital status, and the number of allowances you may claim. If your marital status and the allowances do not require any federal tax to be deducted based upon your taxable portion, then no federal tax will be deducted. If you need federal tax withheld, you can always complete a Form 290 to give us a minimum monthly withholding amount. We can honor your request for a minimum monthly withholding as long as the amount is greater than the amount required by the tax table. All retirement benefits are subject to federal tax, but you do have a choice as to whether or not you want the amount withheld monthly by the Retirement System. Your Form 1099R will reflect your gross retirement benefit, the taxable amount, and non-taxable amount (if any), as well as the total amount withheld for federal tax. The Retirement System is not in a position to offer tax advice to you. Please check with a tax preparer as to your tax liability and how to complete your Form 290 should you require additional assistance.
Do I have to pay North Carolina income tax on my North Carolina retirement benefit when I am living in another state?
The N.C. Department of Revenue has advised our office that permanent out-of-state residents are not subject to North Carolina income tax imposed on benefits from our systems. You should contact the Department of Revenue (state tax department) where you live to inquire about your state tax liability there. The Retirement System is unable to withhold taxes from another state.
Reemployment
Although I enjoy my retirement, I am considering several reemployment opportunities. How will reemployment affect the monthly retirement benefit I receive from the Department of State Treasurer?
If you are receiving early or service retirement benefits and you become employed with any employer that does not participate in the Retirement System from which you retired (except the Consolidated Judicial System and Legislative Retirement System), your new earnings will not affect your retirement benefits.
Reemployment under the Teachers' and State Employees' Retirement System: If you return to employment with an employer that does participate in the Retirement System from which you retired, the following information applies after October 1, 2005: A six-month period during which no service (except as an unpaid bona fide volunteer in a school) is rendered to an employer in the Teachers’ and State Employees’ Retirement System (TSERS) must immediately precede a return to employment. A return to work earlier than six months will revoke your retirement benefit retroactively to your retirement date and all benefits paid to you must be repaid to the Retirement System. Establishing a pre-existing agreement for post-retirement employment with an employer in TSERS is prohibited and could cause retroactive revocation of retirement benefits, as well.
If you are reemployed by, or otherwise engaged to perform services for, a TSERS-covered employer after six months from your retirement date in a position not eligible for participation in TSERS, you will be subject to earnings restrictions of 50% of your gross 12-month pre-retirement salary (excluding termination payments) or $28,080.00 (2009 amount), whichever is higher. The dollar figure is adjusted annually according to the Consumer Price Index, which is a national measure of increase in the cost of living from one year to the next. These earnings restrictions apply for the 12 months immediately following retirement and for each calendar year following the year of retirement.
If you exceed your earnings limitations, your retirement benefit will be suspended the first day of the month following the month in which you exceed the limit for the remainder of the calendar year. Your retirement payment will start again on January 1 of the year after your benefit is stopped. If your earnings exceed the allowable amount in the month of December, your benefit will not be suspended.
Reemployment which causes suspension of your retirement allowance will also cause the suspension of your health coverage under the retiree group of the State Health Plan. Before accepting such reemployment, you should ask the new employer if you will qualify for continued coverage under the active group of the State Health Plan, and if you will qualify for the state’s contribution toward your coverage. Upon restoration of your retirement allowance, your health coverage under the retiree group will be reinstated the first of the month following the month your retirement allowance is restored.
You may return to work for a TSERS-covered employer in a permanent full-time position after a six-month break, but your retirement benefit will be suspended and you must enroll in TSERS as an active employee. If you return to service and contribute for at least three additional years, your service from your first and second periods of employment will be combined at the time of your second retirement, and you can change the retirement payment plan and/or beneficiary you selected at the time of your original retirement. If you return to service for less than three years, your first retirement benefit will be reinstated and you will have a choice of either receiving a lump sum refund of contributions or another (generally smaller) monthly benefit from your second period of employment.
Reemployment Exception for Nursing Instructors. If you are a Teachers’ and State Employees’ Retirement System (TSERS) retiree who retired on or before June 1, 2009 with a reduced or unreduced benefit, or if you retire on or after July 1, 2009 with an unreduced benefit, and you wish to return to work as a nursing instructor exempt from the earnings limitations, you may do so provided you meet all of the following conditions:
· you have a six-month separation from service under the TSERS immediately preceding your return to employment as a nursing instructor, during which time no work is performed in any capacity with a State-supported community college or university;
· you return to work as a nursing instructor in a permanent full-time position, or a part-time position that exceeds fifty percent of the workweek, in a certified nursing program for a maximum of three years at a State-supported community college or university;
· you have been certified by your North Carolina Community College System or the University of North Carolina System employer to teach as a nursing instructor, and
· your employer has certified to the TSERS that it has a shortage of qualified nursing instructors and has met all required conditions of making a good faith effort to hire non-retirees as nursing instructors.
Unless legislation extends this reemployment exception for nursing instructors, these provisions are in effect through June 30, 2013.
Reemployment under the Local Governmental Employees’ Retirement System (LGERS): You may not perform any services for an LGERS-covered employer within the first month following your retirement.
If you retire with early or service retirement benefits and are reemployed by, or otherwise engaged to perform services for, an employer that participates in the Retirement System from which you retired, the following applies: If you are reemployed with a Local Governmental Employees’ Retirement System employer in a position not eligible for participation in the Retirement System, you will be subject to earnings restrictions of 50% of your gross 12-month pre-retirement salary (excluding termination payments) or $28,080.00, whichever is higher. The dollar figure is adjusted annually according to the Consumer Price Index, which is a national measure of increase in the cost of living from one year to the next. These earnings restrictions apply for the 12 months immediately following retirement and for each calendar year following the year of retirement.
If you exceed your earnings limitations, your retirement benefit will be suspended the first day of the month following the month in which you exceed the limit for the remainder of the calendar year. Your retirement payment will start again on January 1 of the year after your benefit is stopped. If your earnings exceed the allowable amount in the month of December, your benefit will not be suspended.
You may return to work in a position that requires membership in the Local Governmental Employees’ Retirement System, but your retirement benefit will be suspended and you must enroll in the Retirement System as an active employee. If you return to service and contribute for at least three additional years, your service from your first and second periods of employment will be combined at the time of your second retirement, and you can change the retirement payment plan and/or beneficiary you selected at the time of your original retirement. If you return to service for less than three years, your first retirement benefit will be reinstated and you will have a choice of either receiving a lump sum refund of contributions or another (generally smaller) monthly benefit from your second period of employment.
Reemployment after receiving disability benefits: If you are receiving disability benefits and accept any kind of employment, public or private, you should contact the Retirement Systems Division for information on provisions that apply to your particular situation.
Divorce
In the event of a divorce, is my spouse entitled to any portion of my accumulated retirement contributions or my retirement benefit?
As a general rule, retirement contributions made, and benefit credits earned, during the period between the dates of your marriage and legal separation are includable in “marital property” and subject to equitable distribution. You should consult your attorney for further instructions.
Guidance documents on Domestic Relations Orders (DRO) are located on the Active Employee and Benefit Recipients Web pages of this Retirement Systems Web site. The documents for DROs, which divide retirement benefits between a member and a non-member spouse, include a “Guide to DROs,” along with sample DROs for the NC 401(k) Plan, Teachers’ and State Employees’ Retirement System, Local Governmental Employees’ Retirement System and Consolidated Judicial Retirement System. The Guide is written for non-lawyers, although it covers enough detail about the State’s defined benefit and defined contribution plans to be useful to attorneys who prepare DROs. The sample DROs set out various alternate provisions for such Orders in language acceptable to the plans. These materials should help avoid common misunderstandings about plan features, prevent easily avoidable errors in drafting the Orders, and streamline the approval and eventual implementation processes for DROs at the Retirement Systems and Department of Justice.
Members with questions about DROs should contact the Division’s Member Services unit:
- Active Employees should call 1-877-627-3287 (toll-free) or (919) 807-3050 (Raleigh area only).
- Retirees should call 1-877-733-4191 (toll-free) or (919) 733-4191 (Raleigh area only).
Disability
I am a member of the Teachers’ and State Employees’ Retirement System. My doctor has recommended that I stop working and apply for disability benefits from both the state and Social Security. According to the Teachers' and State Employees' Handbook, I have sufficient credit in the Retirement System to apply for benefits from the Disability Income Plan of North Carolina. However, I have heard that due to a decision by the North Carolina Supreme Court in the “Faulkenbury” case, I may be able to receive disability benefits from the Retirement System in lieu of the Disability Income Plan. Is this true? Also, which plan would be better for me?
If you have attained five or more years of membership credit with the State Retirement System prior to January 1, 1988, and meet the other qualifications, you are eligible to receive disability retirement benefits from the Retirement System, instead of benefits from the Disability Income Plan. Your benefits will be based, in part, on the amount of service that you would have attained if you had been able to remain in service until you would have otherwise been eligible for an unreduced service retirement benefit. Furthermore, if you had attained five or more years of membership credit with the State Retirement System prior to July 1, 1982, and meet the other qualifications, you are eligible to receive disability retirement benefits under a different provision from the Retirement System, instead of benefits from the Disability Income Plan. Your benefit will be based, in part, on the amount of service that you would have attained if you had been able to remain in service until age 65. In either case, however, you will have the opportunity to elect to receive your disability benefits from either the Retirement System or the Disability Income Plan. Of course, after you have been approved by our medical board for disability benefits, the Retirement System will provide you with figures, and an explanation of the benefits and conditions applicable to you, to enable you to make your choice.
Do I have disability benefits as a member of the Local Retirement System?
In order to be eligible for a monthly disability retirement benefit from the Local Governmental Employees’ Retirement System, you must have five or more years of creditable service and your permanent disability must have occurred while you were actively employed. Your doctor must certify that you are totally and permanently disabled from the further performance of your usual occupation, which must be certified on or prior to the last day you worked or exhausted leave. Local law enforcement officers are eligible for disability retirement after one year of creditable service, provided the disability resulted from a line-of-duty injury. You should contact your current employer for the appropriate forms to complete in order to begin the disability retirement process.
Reemployment after receiving disability benefits:
If you are receiving disability benefits and accept any kind of employment, public or private, you should contact the Retirement Systems Division for information on provisions that apply to your particular situation.
Reporting a Death
Upon my death, what should my family do about my retirement benefit?
Upon your death, your survivors should contact the Retirement Systems Division immediately. We will need to be provided with your name, last four digits of your Social Security Number or your Member ID Number, and a copy of your death certificate. In addition, if you have elected to provide survivor benefits after your death, we will need to be provided with the Social Security number and current mailing address of your survivor. If your estate is your beneficiary, we must be provided with Papers of Administration or Letters of Testamentary. The monthly benefit that is payable in the month of your death belongs to your estate and can be kept. Any benefits made payable to you after your month of death must be returned to the Retirement Systems Division. (Please remember to keep your beneficiary designation(s) up-to-date.)
How to Contact Us
How do I contact the Retirement Systems Division?
Internet: www.myncretirement.com
Through our Retirement Systems Division Web site you have access to information and resources that will help you learn more about the benefits available to you:
- Estimate your monthly retirement benefits by using our “Retirement Estimator"
- Download and complete applications and forms used by the Retirement Systems
- Download and view the Retirement Benefits handbooks
- Manage your retirement account online using our ORBIT (Online Retirement Benefits through Integrated Technology) System. You can view your account information, request customized benefit estimates, make edits to your personal information, and much more.
E-Mail: nc.retirement@nctreasurer.com
Hours: Mon-Fri 8:00 a.m.–5:30 p.m.
Telephone: 1-877-627-3287 (toll-free outside of Raleigh area) or 919-807-3050 (within local calling distance of Raleigh.)
Due to the large volume of calls received by the Call Center, we recommend that you do not call during the following days and times:
Mondays
Other days between the hours of noon and 2:00 p.m.
The day following the mailing of monthly retirement checks
If you believe that the nature of your inquiry will result in a lengthy conversation or will require research by our staff, we recommend that you submit your questions in writing and we will respond accordingly.
Address:
Department of State Treasurer
Albemarle Building
325 North Salisbury Street
Raleigh, North Carolina 27603-1385
NOTE: Appointment Only Policy – The Retirement System provides members who wish to visit our office with one-on-one and group consultations by appointment only. Please call our office at 919-733-4191 or toll-free at 877-733-4191 to schedule an appointment.
DISCLAIMER: The availability and amount of all benefits you might be eligible to receive is governed by Retirement Systems law. The information provided in these “Frequently Asked Questions” cannot alter, modify or otherwise change the controlling Retirement System law or other governing legal documents in any way, nor can any right accrue to you by reason of any information provided or omission of information provided herein. In the event of a conflict between this information and Retirement Systems law, Retirement Systems law governs.
(Rev. 10/9/09)