NORTH CAROLINA GENERAL ASSEMBLY

1971 SESSION

 

 

CHAPTER 325

SENATE BILL 380

 

 

AN ACT RELATING TO ADMINISTERING THE NORTH CAROLINA LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM.

 

The General Assembly of North Carolina do enact:

 

Section 1.  G.S. 128-21(5) is hereby amended by rewriting the subdivision to read as follows:

"(5)      'Average final compensation' shall mean the average annual compensation of a member during the five consecutive calendar years of creditable service producing the highest such average."

Sec. 2.  G.S. 128-21 is hereby amended by inserting a new subdivision to be designated as (7a), and to read as follows:

"(7a)     'Compensation' shall mean all salaries and wages derived from public funds which are earned by a member of the Retirement System for service as an employee in the unit of the Retirement System for which he is performing full-time work."

Sec. 3.  G.S. 128-21 is hereby amended by inserting a new subdivision to be designated as (11a), and to read as follows:

"(11a)   'Filing' when used in reference to an application for retirement shall mean the receipt of an acceptable application on a form provided by the Retirement System."

Sec. 4.  G.S. 128-21(19) is hereby amended by adding the following sentence at the end thereof: "In order for a member's retirement to become effective in any month, the member must render no service at any time during that month."

Sec. 5.  (a) G.S. 128-23(a) is hereby amended by rewriting the subsection to read as follows:

"(a)       Pursuant to the favorable vote of a majority of the employees of any incorporated city or town, the governing body may, by resolution legally adopted and approved by the board of trustees, elect to have its employees become eligible to participate in the Retirement System, and the said municipal governing body may make the necessary appropriation therefor and if necessary levy annually taxes for payment of the same."

(b)  G.S. 128-23(b) is hereby amended by rewriting the subsection to read as follows:

"(b)      Pursuant to the favorable vote of a majority of the employees of any county, the board of commissioners may, by resolution legally adopted and approved by the board of trustees, elect to have its employees become eligible to participate in the Retirement System, and the said county board of commissioners may make the necessary appropriation therefor and if necessary levy annually taxes for payment of the same as a special purpose, in addition to any tax allowed by any special statute for the purposes enumerated in G.S. 153-9 and in addition to the rates allowed by the Constitution."

Sec. 6.  G.S. 128-24(4)c. is hereby amended by rewriting the second sentence thereof, which begins on line 8, to read as follows:

"Upon his subsequent retirement, he shall be entitled to an allowance not less than the allowance described in (1) below reduced by the amount in (2) below.

(1)        The allowance to which he would have been entitled if he were retiring for the first time, calculated on the basis of his total creditable service represented by the sum of his creditable service at the time of his first retirement, and his creditable service after he was restored to service.

(2)        The actuarial equivalent of the retirement benefits he previously received."

Sec. 7.  G.S. 128-24(4)d. is hereby amended by rewriting the subsection to read as follows:

"d.        Should an employee who retired on an early or service retirement allowance be restored to service after the attainment of the age of 62 years, his retirement allowance shall be reduced to the extent necessary (if any) so that the sum of the retirement allowance and earnings from employment by a unit of the Retirement System for any year (beginning January 1 and ending December 31) will not exceed the member's average final compensation. Provided, however, that under no circumstances will the member's retirement allowance be reduced below the amount of his annuity as defined in G.S. 128-21(3)."

Sec. 8.  G.S. 128-24(5)b. is hereby amended by striking out all of said subsection b. through the semicolon in line 9 and inserting in lieu thereof the following:

"b.        In lieu of the benefits provided in Paragraph a. of this subdivision (5), any member who separates from service on or after July 1, 1965, and prior to the attainment of the age of 60 years, for any reason other than death or retirement for disability as provided in G.S. 128-27, subsection (c), after completing 20 or more years of creditable service, and who leaves his total accumulated contributions in said System may elect to retire on an early retirement allowance upon attaining the age of 50 years or at any time thereafter;".

Sec. 9.  G.S. 128-26(a) is hereby amended by rewriting the subsection to read as follows:

"(a)       Each person who becomes a member during the first year of his employer's participation, and who was an employee of the same employer at any time during the year immediately preceding the date of participation, shall file a detailed statement of all service rendered by him to that employer prior to the date of participation for which he claims credit.

A participating employer may allow prior service credit to any of its employees on account of their earlier service to the aforesaid employer, or on account of earlier service to any other employer as the term employer is defined in G.S. 128-21(11).

With respect to a member retiring on or after July 1, 1967, the governing board of a participating unit may allow credit for any period of military service in the armed forces of the United States if the person returned to the service of his employer within two years after having been honorably discharged, or becoming entitled to be discharged, released, or separated from such armed services; provided that, notwithstanding the above provisions, any member having credit for not less than ten years of otherwise creditable service may be allowed credit for such military services which are not creditable in any other governmental retirement system; provided further that a member will receive credit for military service under the provisions of this paragraph only if he submits satisfactory evidence of the military service claimed and the participating unit of which he is an employee agrees to grant credit for such military service prior to January 1, 1972.

A member retiring on or after July 1, 1971, who is not granted credit for military service under the provisions of the preceding paragraph will be allowed credit for any period in the armed services of the United States up to the date he was first eligible to be separated or released therefrom; provided that he was an employee as defined in G.S. 128-21(10) at the time he entered military service, and either of the following conditions is met:

(1)        He returns to service, with the employer by whom he was employed when he entered military service, within a period of two years after he is first eligible to be separated or released from such military service under other than dishonorable conditions.

(2)        He is in service, with the employer by whom he was employed when he entered military service, for a period of not less than ten years after he is separated or released from such armed services under other than dishonorable conditions."

Sec. 10.  G.S. 128-26(e) is hereby amended by striking out all of subsection (e) following the semicolon in line five and inserting in lieu thereof the following:

"and if he has sick leave standing to his credit upon retirement on or after July 1, 1971, one month of credit for each 20 days or portion thereof, but sick leave shall not be counted in computing creditable service for the purpose of determining eligibility for service retirement, disability retirement, early retirement or for a vested deferred allowance."

Sec. 11.  G.S. 128-26(e), as the same appears in the 1969 Cumulative Supplement of the General Statutes, and as otherwise amended by this act is hereby further amended by adding a new paragraph at the end of the subsection to read as follows:

"On and after July 1, 1971, a member whose account was closed on account of absence from service under the provisions of G.S. 128-24(1a) and who subsequently returns to service for a period of five years, may thereafter repay the amount withdrawn plus regular interest thereon from the date of withdrawal through the year of repayment and thereby increase his creditable service by the amount of creditable service lost when his account was closed."

Sec. 12.  (a) G.S. 128-27(a)(2) is hereby amended by rewriting the subdivision to read as follows:

"(2)      Any member in service shall be retired as of the July first coincident with or next following his 65th birthday; provided that, upon the approval of his employer, any member may be continued in service on a year-to-year basis."

(b)  G.S. 128-27(a)(3) is hereby repealed.

Sec. 13.  (a) G.S. 128-27(e)(2) is hereby amended by rewriting the first sentence to read as follows:

"(2)      Should a disability beneficiary under the age of 62 years be restored to active service at a compensation not less than his average final compensation, his retirement allowance shall cease, he shall again become a member of the Retirement System and he shall contribute thereafter at the contribution rate which is applicable during his subsequent membership service."

(b)  G.S. 128-27(e) is hereby amended by adding a new subdivision to be designated as "(3)" and to read as follows:

"(3)      Notwithstanding the foregoing, a member retired on a disability retirement allowance who is restored to service and subsequently retires on or after July 1, 1971, shall be entitled to an allowance not less than the allowance prescribed in a. below reduced by the amount in b. below.

a.         The allowance to which he would have been entitled if he were retiring for the first time, calculated on the basis of his total creditable service represented by the sum of his creditable service at the time of his first retirement and his creditable service after he was restored to service.

b.         The actuarial equivalent of the retirement benefits he previously received."

Sec. 14.  G.S. 128-27(g) is hereby amended by rewriting the last three lines to read as follows:

"Option five. The member may elect:

(1)        To receive a reduced retirement allowance under the conditions of Option two or Option three, as provided for above, with the modification that if both he and the person nominated die within 10 years from his retirement date, an amount equal to his accumulated contributions at retirement, less 1/120th thereof for each month for which a retirement allowance has been paid, shall be paid to his legal representatives or to such person as he shall nominate by written designation duly acknowledged and filed with the board of trustees; or

(2)        To receive a reduced retirement allowance during his life with provisions for some other benefit to be paid after his death in accordance with a plan submitted to and approved by the board of trustees."

Sec. 15.  (a) G-S. 128-27(1) is hereby amended by striking out the last sentence of the second paragraph of subsection (1) and inserting in lieu thereof the following:

"For the purposes of this subsection (1), a member shall be deemed to be in service at the date of his death if his last day of actual service occurred not more than 90 days before the date of his death."

(b)  G.S. 128-27(l) is hereby amended by striking out the words "(except by retirement)" in the first line of subdivision (2)a. on page 106 of the Cumulative Supplement, and by striking out all of subsections (3) and (4) on page 106 of the Cumulative Supplement.

Sec. 16.  (a) G.S. 128-27(m) is hereby amended by rewriting the subsection to read as follows:

"(m)      Survivor's Alternate Benefit. — Upon the death of a member in service, the principal beneficiary designated to receive a return of accumulated contributions shall have the right to elect to receive in lieu thereof the reduced retirement allowance provided by Option two of subsection (g) above computed by assuming that the member had retired on the first day of the month following the date of his death, provided that all three of the following conditions apply:

(1)        The member had attained age 55 regardless of length of service, or had completed 30 years of service regardless of age.

(2)        The member had designated as the principal beneficiary to receive a return of his accumulated contributions one and only one person who is living at the time of his death.

(3)        The member had not instructed the board of trustees in writing that he did not wish the provisions of this subsection apply."

(b)  G.S. 128-27(f) is hereby amended by rewriting the third sentence, beginning with the word "Upon" in line 13, to read as follows:

"Upon receipt of proof satisfactory to the board of trustees of the death, prior to retirement, of a member or former member there shall be paid to such person or persons as he shall have nominated by written designation duly acknowledged and filed with the board of trustees, if such person or persons are living at the time of the member's death, otherwise to the member's legal representatives, the amount of his accumulated contributions at the time of his death, unless the beneficiary elects to receive the alternate benefit under the provisions of (m) below."

Sec. 17.  (a) G.S. 128-30(b)(1) is hereby amended by deleting the fourth sentence in the first paragraph thereof which reads as follows:

"But the employer shall not have any deduction made for annuity purposes from the compensation of a member who elects not to contribute if he has attained the age of 60 years and has completed 35 years of service."

(b)  G.S. 128-30(b)(3) is hereby amended by rewriting the subsection to read as follows:

"(3)      The accumulated contributions of a member drawn by him, or paid to his estate or to his designated beneficiary in event of his death as provided in this Article, shall be paid from the annuity savings fund. Upon the retirement of a member his accumulated contributions shall be transferred from the annuity savings fund to the annuity reserve fund."

Sec. 18.  G.S. 128-30(b)(1) is hereby amended by striking out the last sentence of the second paragraph of subdivision (1) and inserting in lieu thereof the following:

"Such rates shall apply uniformly to all members of the Retirement System, irrespective of class."

Sec. 19.  (a) G.S. 128-30(b) is hereby amended by adding a new subdivision to be designated as "(4)" and to read as follows:

"(4)      Subject to the approval of the board of trustees, any member who is granted by his employer a leave of absence for the sole purpose of acquiring knowledge, talents, or abilities which are, in the opinion of the employer, expected to increase the efficiency of the services of the member to his or her employer, may make monthly contributions to the Retirement System on the basis of the salary or wage such member was receiving at the time such leave of absence was granted."

(b)  G.S. 128-26 is hereby amended by adding a new subsection to be designated as "(g)" and to read as follows:

"(g)       During periods when a member is on leave of absence and is receiving less than his full compensation, he will be deemed to be in service only if he is contributing to the Retirement System as provided in G.S. 128-30(b)(4). If he is so contributing, the annual rate of compensation paid to such employee immediately before the leave of absence began will be deemed to be the actual compensation rate of the employee during the leave of absence."

(c)  G.S. 128-27(l), as the same appears in the 1969 Cumulative Supplement to the General Statutes, and as otherwise amended by this act, is hereby further amended by adding a new subsection "(3)" and to read as follows:

"(3)      For a period when a member is on leave of absence, his status with respect to the death benefit will be determined by the provisions of G.S. 128-26(g)."

(d)  G.S. 128-30(d)(1) is hereby amended by adding a new sentence beginning immediately at the end of the first sentence on line six, to read as follows:

"In addition, such contributions by participating employers will be required for each member on leave of absence who makes monthly contributions in accordance with (b)(4) above, and will be based on the salary or wage the member was receiving at the time the leave of absence was granted."

Sec. 20.  (a) G.S. 128-34 is hereby amended by redesignating G.S. 128-34 as G.S. 128-34(a).

(b)  G.S. 128-34 is hereby amended by adding a new subsection, to be designated as subsection "(b)", and to read as follows:

"(b)      Any person who, on or after July 1, 1971, becomes a member of the Local Governmental Employees' Retirement System shall be entitled to transfer to this Retirement System his credits for membership and prior service in the Teachers' and State Employees' Retirement System: Provided, the actual transfer of employment is made while he has an active account in the State System and such person shall request the State System to transfer his accumulated contributions, interest, and service credits to this Retirement System; provided further, the State System agrees to transfer to this Retirement System the amount of reserve held in the State System as the result of previous contributions of the employer on behalf of the transferring employee."

(c)  G.S. 128-34, as otherwise amended by this act, is hereby further amended by adding a new subsection, to be designated as subsection "(c)" and to read as follows:

"(c)       Any member whose services are terminated for any reason other than retirement or death who becomes employed by an employer participating in the Teachers' and State Employees' Retirement System shall be entitled to transfer to the State System his credits for membership and prior service in this Retirement System in accordance with G.S. 135-18.1: Provided, the actual transfer of employment is made while he has an active account in this Retirement System and such persons shall request this Retirement System to transfer his accumulated contributions, interest, and service credits to the State System. When such request is made by a member who is entitled to make it and who becomes a member of the State System after July 1, 1969, this Retirement System will also transfer to the State System the amount of reserve held by this System as a result of previous contributions of the employer on behalf of the transferring employee."

Sec. 21.  This act shall become effective July 1, 1971.

In the General Assembly read three times and ratified, this the 6th day of May, 1971.