In this Issue:
Beneficiary Forms Online
Make sure your new employees enroll in ORBIT and take advantage of the new online beneficiary designation management. For employees who don’t designate their beneficiaries in ORBIT, but elect to send in a form, please note that the Retirement Systems cannot process these forms until after the new employee has been set up in our system, and assigned a Member ID.
In addition, once aspiring law enforcement officers complete the academy and are officially coded as LEOs, please have them complete Form 276, Separate Benefit Plan for Law Enforcement.
2016 Annual Benefits Statements Are Now Available!If your employees are current North Carolina public employees with more than 12 months of service, their 2016 Annual Benefits Statement (ABS) is in their ORBIT account, and they can begin planning their retirement today! The ABS is a unique, personalized snapshot of their projected sources of income in retirement.
Because ORBIT was recently updated with a new look and feel, the Retirement Systems has developed several “How To” videos as well as some Frequently Asked Questions to help members navigate the updated ORBIT site.
The ABS lists service in the NC Retirement Systems as of Dec. 31, 2016, estimated retirement benefits from their pension, estimated Social Security income, and their contributions to the NC 401(k), NC 457 Plans, and the NC 403(b) Program. The statement also calculates any outside assets or pensions that members entered into the Retirement Income Calculator on the Prudential site. These combined assets will be calculated into their projected monthly retirement income, too.
Visit the Annual Benefits Statement page of our website where members will find:
LGERS 1,000 Hour Rule Reminder
North Carolina Retirement Systems Laws require an employee to become a contributing member of the Local Governmental Employees’ Retirement System (LGERS), as a condition of employment, on the date he or she begins employment (or after a required local unit waiting period) if the employee is employed by a participating LGERS employer in a regular position that requires at least 1,000 hours of work in a calendar year. The employee will not be a contributing member of LGERS if his or her work is considered “temporary employment,” meaning employment for a limited term which does not exceed 12 consecutive months on a non-recurring basis for an LGERS employer, or “statutorily required interim employment,” meaning employment as an interim city or county manager for a period that does not exceed 12 months on a non-recurring basis.
To determine if an employee is required to be an LGERS member and if contributions must be submitted to LGERS on his or her behalf, examine the requirements of the position.The hours required of the position determine membership in LGERS, not the actual number of hours an LGERS employee works in a calendar year. It is important to remember the key is the position. If the position requires 1,000 hours or more per calendar year (January through December), then the person in the position must become a contributing member of LGERS. For example, if an employee works 999 hours and then goes home, but the position itself requires 1,000 hours or more per calendar year, then the employee must be a contributing member of LGERS.
IRC Section 415(b) and 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 (i.e., generally earning more than $180,000 annually) 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 Employer Manuals.
Local NC 403(b) Retirement Education Counselors Available Across NC
403(b) Lawsuits Claim Higher Ed Administrators Breached Fiduciary Duties
TSERS Employer Training - Raleigh and Online
Topics to be covered include:
NC Open Book