NC Total Retirement Plans, Government Employers, wave image, photo of man in violin shop looking at plans.

Government Employers
​​​The Retirement Systems Offices and Call Center will be closed today from 11:30 a.m. until 1:30 p.m. for an all-employee meeting. We apoligize for any inconvenience. Thank you.
The ORBIT system is currently experiencing technical difficulties. This system outage also affects access to forms. We are working diligently to resolve the problem. Your patience is appreciated.

​The Retirement Systems is currently experiencing high call volume in our Call Center. Please feel free to take advantage of our new "Call Back Assist" feature which, if offered, allows you to schedule a call-back time.

These web pages offer valuable reference and legal information, and tools to help you enroll new employees, report monthly retirement contributions, and provide guidance to your employees.  


LGERS Contribution Rates Increasing July 1, 2019

Effective July 1, 2019, the “base” employer contribution rate will change:

  • Law enforcement officers (LEOs) rate will increase from 8.50 to 9.70 percent of reported compensation.
  • Rate for all other employees will increase from 7.75 to 8.95 percent of reported compensation.

Additional rates, such as rates associated with death benefits or past service liabilities, will be added to the base rate to determine the actual contribution percentage for each employer. As in past years, each employer’s total contribution rate for the upcoming fiscal year will be calculated by the Retirement Systems Division and were communicated in a letter in late March.

The LGERS Board of Trustee’s policy now anticipates further increases in the “base” rates effective July 1, 2020, and July 1, 2021, equal to 1.20 percent of reported compensation each year, as follows:

​Effective Date​Non-LEO “Base Rate”​LEO “Base Rate”
​July 1, 2019​8.95%9.70%​
​July 1, 2020​10.15%​10.90%
​July 1, 2021​11.35%​12.10%

 

Our staff recently gave a presentation to the League of Municipalities.

Here is a link to the audio only.
The slides to follow along with the audio are here.

Retirement Systems Division staff are available to answer any questions from employers about this Board action.

 

Employer Training Podcast Library
 
The Disability Income Plan of North Carolina (DIPNC) provides monthly replacement income to your employees in the form of short-term, extended short-term and long-term disability benefits if they become disabled while a permanent employee under the Teachers’ and State Employees’ Retirement System (TSERS) or a participant of the Optional Retirement Program (ORP), and they meet certain eligibility requirements. Visit the DST Podcast Library to learn more. The 15 video podcasts are identified by subject for quick reference.
       

Employer Training

The Retirement Systems Division is offering a series of Employer Training for Human Resource Personnel, employees assisting in retirement related matters, and employees responsible for ORBIT Payroll Reporting. Training sessions are held at the Department of State Treasurer location in Raleigh, in the Kitty Hawk Conference Room, 3200 Atlantic Ave. Raleigh, NC 27602, as well as simulcast online. You may attend in person, or via the webinar. Attend the training you need or attend them all and receive a Certificate from the NC Retirement Systems.

Employers should sign up to attend Employer Training by registering through the EventBrite registration link. Email us if you are interested in hosting an Employer Training at your location. If enrolled in training, please attend, or email employertraining@nctreasurer.com to let the Retirement Systems know you need to cancel.

 TSERS Employer Training

 LGERS Employer Training

 Pension Spiking

​Legislation passed by the 2014 General Assembly establishes, effective January 1, 2015, a contribution-based benefit cap (CBBC) on pension benefits for LGERS and TSERS members who retire on or after January 1, 2015, and whose average final compensation (AFC) is $100,000 or higher (adjusted annually for inflation). This legislation was created to control the practice of “pension spiking,” in which a member's compensation substantially increases to create a retirement benefit that is significantly greater than the member's contributions would fund. Significant late-career promotions, conversion of benefits into compensation and leave payouts at retirement may also cause a members' retirement benefit to exceed what the member's contributions would fund.

The Anti-Pension Spiking CBBC approach was created to protect each system for current and future retirees and to prevent all employers in the Retirement Systems from absorbing the additional liabilities caused by compensation decisions made by other employers.
 
The Retirement Systems has posted Pension Spiking presentations for LGERS and TSERS that provide examples of pension spiking and how employers and employees will be responsible for paying the liability created by causing the pension spike.
In addition, the Retirement Systems created an Anti-Pension Spiking handout​ outlining the highlights of the legislation.
 
Estimating Potential CBBC Impact 
           
Your agency can utilize the statutory formula to help determine the likelihood that the retirement allowance of a member might exceed the contribution-based benefit cap (CBBC). The CBBC formula is as follows:
 
Benefit Formula = Average Final Compensation (AFC) X Multiplier X Service
CBBC Formula = Contributions / Annuity Factor X CBBC Factor
If Benefit is greater than CBBC, the difference is multiplied by the Annuity Factor
 
The current CBBC Factor for TSERS is 4.5 and LGERS is 4.7. The current multiplier for TSERS is 0.0182 and LGERS is 0.0185. The AFC threshold for 2019 is $108,018.05. The listing of current annuity factors can be found here. You can access the member’s accumulated contribution balance and service history through ORBIT Employer Self-Service (Reporting – View Member Info – View Account History). Please note that the total contribution balance does not include the interest (currently 4%) for the current year. 
    
IRC Section 415(b) & Qualified Excess Benefit Arrangement (QEBA)
  

Under federal tax law, a retiree is permitted to receive pension benefits up to a set annual allowable limit determined by the Internal Revenue Code (IRC). The retirement benefits for some highly compensated employees may be subject to the IRC section 415(b) annual pension benefit limit. 

Legislation enacted by the 2013 General Assembly established a Qualified Excess Benefit Arrangement (QEBA) fund to pay the part of a retiree’s retirement allowance that exceeds the limit. Recent legislation amended the QEBA law to provide that members hired prior to January 1, 2015, are eligible to receive benefit payments from the QEBA fund. However, the last employer for a member who retires on or after August 1, 2016, will be required to reimburse the QEBA fund for any payments made to that retiree from the QEBA fund. For more information, please refer to the QEBA Fact Sheet, or the  Employer Manuals​

 New Employees?

​​If you have new employees, don't forget to provide them with our Welcome Packet information, located on the New Hire Welcome Kits​ web page.

 Related News