NORTH CAROLINA GENERAL ASSEMBLY
1969 SESSION
CHAPTER 442
SENATE BILL 264
AN ACT TO AMEND CHAPTER 128 OF THE GENERAL STATUTES RELATING TO THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM.
The General Assembly of North Carolina do enact:
Section 1. Absence from service. Subdivision (1a) of G.S. 128-24 is hereby amended by rewriting said subdivision to read as follows:
"(1a) Should any member in any period of eight consecutive years after becoming a member be absent from service more than seven years, or should he withdraw his accumulated contributions or should he become a beneficiary or die, he shall thereupon cease to be a member."
Sec. 2. Deposit in annuity savings fund. Subdivision (2) of G.S. 128-24 is hereby amended by adding at the end thereof a sentence to read as follows:
"Any member on or after July 1, 1969 may deposit in the annuity savings fund by a single payment the contributions plus interest which would have been credited to his account had he not signed a nonelection blank, and be entitled to such membership service credits and any prior service credits which became void upon execution of such nonelection blank; provided that the employer will pay the appropriate matching contributions."
Sec. 3. Employment or re-employment at or after age 62. G.S. 128-24 is hereby amended by adding a new subdivision immediately following Subdivision (3), to be designated as Subdivision (3a), and to read as follows:
"(3a) No person who becomes an employee as the term is defined in this chapter, shall thereby become a member of the Retirement System who is elected, appointed, employed or re-employed after he has attained the age of 62 years: Provided, however, that this will not apply to any member whose account is active upon his return to service."
Sec. 4. Re-employment before age 62. The first sentence of Subdivision c of Subdivision (4) of G. S. 128-24, as the same appears in the 1967 Supplement is hereby rewritten to read as follows:
"Should an employee who retired on an early or service retirement allowance be restored to service prior to the time he shall have attained the age of sixty-two years, or if a uniformed policeman or fireman prior to the time he shall have attained the age of fifty-five years, his allowance shall cease, he shall again become a member of the Retirement System, and he shall contribute thereafter at the uniform contribution rate for his class member."
Sec. 5. Re-employment at or after age 62. (a) G. S. 128-24 is hereby amended by adding a new subdivision immediately following Subdivision c of Subdivision (4), to be designated as Subdivision d, and 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 will not exceed the member's annual rate of compensation when he retired. 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)."
(b) Subdivision c of Subdivision (5) of G.S. 128-24, as the same appears in the 1967 Supplement, is hereby amended by rewriting said Subdivision c in its entirety to read as follows:
"c. The provisions of paragraph c and d of the preceding subdivision (4) shall apply equally to this subdivision (5)."
Sec. 6. Credit for sick leave. Subsection (e) of G.S. 128-26 is hereby amended by rewriting said subsection in its entirety to read as follows:
"(e) Creditable service at retirement on which the retirement allowance of a member shall be based shall consist of the membership service rendered by him since he last became a member, and also if he has a prior service certificate which is in full force and effect, the amount of the service certified on his prior service certificate; and if he has sick leave standing to his credit upon retirement on or after July 1, 1969, one month of credit for each 20 days or portion thereof, but sick leave shall not be counted in computing creditable service for the purposes of G.S. 128-24(5)a."
Sec. 7. Service retirement. (a) Subdivision a of Subdivision (5) of G.S. 128-24, as the same appears in the 1967 Supplement, is hereby amended by rewriting the last sentence to read as follows:
"Such deferred retirement allowance shall be computed in accordance with the provisions of Section 128-27, subsection (b1); provided that such benefits will be computed in accordance with subsection (b2) on or after July 1, 1967, but prior to July 1, 1969; and provided further that such benefits will be computed in accordance with subsection (b3) on or after July 1, 1969."
(b) Subsection (b2) of G.S. 128-27, as the same appears in the 1967 Supplement, is hereby amended by rewriting the first three lines thereof to read as follows:
"(b2) Service Retirement Allowances of Persons Retiring on or after July 1, 1967, but Prior to July 1, 1969. — Upon retirement from service on or after July 1, 1967, but prior to July 1, 1969, a member shall receive a service retirement allowance which shall consist of:".
(c) G.S. 128-27 is hereby amended by adding a new subsection, to be designated as Subsection (b3), and to read as follows:
"(b3) Service Retirement Allowances of Persons Retiring on or after July 1, 1969. — Upon retirement from service on or after July 1, 1969, a member shall receive a service retirement allowance which shall consist of:
"(1) If the member's service retirement date occurs on or after his sixty-fifth birthday, regardless of his years of creditable service, or on or after his sixty- second birthday and the completion of 30 years of creditable service, such allowance shall be equal to one and one quarter per centum (1-1/4%) of the portion of his average final compensation not in excess of fifty-six hundred dollars ($5,600.00) plus one and one half per centum (1-1/2%) of the portion of such compensation in excess of fifty-six hundred dollars ($5,600.00), multiplied by the number of years of his creditable service.
"(2a) If the member's service retirement date occurs before his sixty-fifth birthday and prior to his completion of 30 or more years of creditable service, his service retirement allowance shall be computed as in (1) above, but shall be reduced by one quarter of one per cent (1/4 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following his sixty-fifth birthday.
"(2b) If the member's service retirement date occurs before his sixtieth birthday and prior to his completion of 30 or more years of creditable service, his service retirement allowance shall be the actuarial equivalent of the allowance payable at the age of sixty years as computed in (2a) above.
"(3a) If the member's service retirement date occurs before his sixty-second birthday but on or after his sixtieth birthday and on or after completion of 30 or more years of creditable service, his service retirement allowance shall be computed as in (1) above, but shall be reduced by one quarter of one per cent (1/4 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following his sixty-second birthday.
"(3b) If the member's service retirement date occurs before his sixtieth birthday but on or after completion of 30 or more years of creditable service, his service retirement allowance shall be the actuarial equivalent of the allowance payable at the age of sixty years as computed in (3a) above.
"(4) Notwithstanding the foregoing provisions, any member whose creditable service commenced prior to July 1, 1965, and uniformed policemen or firemen not covered under the Social Security Act employed thereafter, shall receive not less than the benefits provided by G.S. 128-27(b)."
Sec. 8. Application for disability benefits. Subsection (c) of G.S. 128-27 is hereby amended by rewriting said subsection in its entirety to read as follows:
"(c) Disability Retirement Benefits. Upon the application of a member or of his employer, any member who has had ten or more years of creditable service may be retired by the board of trustees on the first day of any calendar month, not less than thirty and not more than ninety days next following the date of filing such application, on a disability retirement allowance: Provided, that the medical board, after a medical examination of such member, shall certify that such member is mentally or physically incapacitated for the further performance of duty, that such incapacity was incurred at the time of active employment and has been continuous thereafter, that such incapacity is likely to be permanent, and that such member should be retired."
Sec. 9. Disability retirement, (a) Subsection (d1) of G.S. 128-27, as the same appears in the 1967 Supplement, is hereby amended by rewriting the first five lines thereof to read as follows:
"(d1) Allowance on Disability Retirement of Persons Retiring on or after July 1, 1965 but Prior to July 1, 1969. — Upon retirement for disability, in accordance with subsection (c) above, on or after July 1, 1965 but prior to July 1, 1969, a member shall receive a service retirement allowance if he has attained the age of sixty (60) years, otherwise he shall receive a disability retirement allowance which shall be computed as follows:".
(b) G.S. 128-27 is hereby amended by adding a new subsection immediately following Subsection (d1), to be designated as Subsection (d2), and to read as follows:
"(d2) Allowance on Disability Retirement of Persons Retiring on or after July 1, 1969. — Upon retirement for disability, in accordance with subsection (c) above, on or after July 1, 1969, a member shall receive a service retirement allowance if he has attained the age of sixty years, otherwise he shall receive a disability retirement allowance which shall be computed as follows:
"(1) Such allowance shall be equal to the service retirement allowance which would have been payable had he continued in service without further change in compensation to the age of sixty-five years, minus the actuarial equivalent of the contributions he would have made during such continued service.
"(2) Notwithstanding the foregoing provisions, any member whose creditable service commenced prior to July 1, 1965, and uniformed policemen or firemen not covered under the Social Security Act employed thereafter, shall receive not less than the benefit provided by G.S. 128-27 (d)."
Sec. 10. Refund provisions. Subsection (f) of G.S. 128-27, as the same appears in the 1967 Supplement, is hereby amended by rewriting all of said subsection preceding the semicolon in line four to read as follows:
"(f) Return of Accumulated Contributions. Should a member cease to be an employee except by death or retirement under the provisions of this chapter, he shall upon submission of an application be paid, not earlier than 60 days from receipt of an acceptable application, the sum of his contributions and one half of the accumulated regular interest thereon, provided that he has not in the meantime returned to service."
Sec. 11. Election of optional allowance. Subsection (g) of G.S. 128-27, as the same appears in the 1967 Cumulative Supplement, is hereby amended by striking out the last sentence thereof and by striking out the following words commencing in line six and ending in line twelve:
"Provided further, that an optional election may be made after attainment of age sixty without establishment of a date of retirement: and further provided that, on or after July 1, 1967, said optional election may be made after attainment of age fifty-five or after completion of 30 years of creditable service, without establishment of a date of retirement. Such election will be effective thirty (30) days after execution and filing thereof with the Retirement System."
Sec. 12. Cost of living increase. G.S. 128-27 is hereby amended by adding a new subsection at the end thereof, to be designated as Subsection (k), and to read as follows:
"(k) Post Retirement Increases in Allowances. As of December 31, 1969 the ratio of the Consumer Price Index to such index one year earlier shall be determined. If such ratio indicates an increase that equals or exceeds three per centum, each beneficiary receiving a retirement allowance as of December 31, 1968 shall be entitled to have his allowance increased three per centum effective July 1, 1970.
"As of December 31st of each year after 1969, the ratio of the Consumer Price Index to such index one year earlier shall be determined.
"(1) If such ratio indicates an increase that equals or exceeds three per centum, each beneficiary receiving a retirement allowance as of the end of the preceding year shall be entitled to have his allowance increased three per centum effective on July 1st of the year following the date of determination, provided that any such increase in allowances shall be contingent upon the total fund providing sufficient investment gains to cover the additional actuarial liabilities on account of such increase,
"(2) If such ratio indicates an increase of less than three per centum for any year, the index at the end of such year will be compared to the index at the end of 1968, or if later, at the end of the last year when an increase of three per centum or more was indicated.
"If such comparison indicates an increase of three per centum or more, each beneficiary receiving an allowance at the beginning of the period encompassed by the comparison shall be entitled to have his allowance increased three per centum effective on July 1st of the year following such period, subject to the proviso stated in (1) above.
"The allowance of a surviving annuitant of a beneficiary whose allowance is increased under this subsection shall, when and if payable, be increased by the same per centum.
"Any increase in allowance granted hereunder shall be permanent, irrespective of any subsequent decrease in the Consumer Price Index, and shall be included in determining any subsequent increase.
"For purposes of this subsection. Consumer Price Index shall mean the Consumer Price Index (all items - United States City average), as published by the United States Department of Labor, Bureau of Labor Statistics."
Sec. 13. Death Benefit. G.S. 128-27 is hereby further amended by adding another new subsection at the end thereof, to be designated as Subsection (1), and to read as follows:
"(1) Death Benefit. The provisions of this subsection shall become effective for any employer only after an agreement to that effect has been executed by the employer and the Director of the Retirement System.
"Upon receipt of proof, satisfactory to the board of trustees, of the death, in service, of a member who had completed at least one full calendar year of membership in the System, there shall be paid to such person as he shall have nominated by written designation duly acknowledged and filed with the board of trustees, if such person is living at the time of the member's death, otherwise to the member's legal representatives, a death benefit equal to the compensation earned by the member during the calendar year preceding the year in which his death occurs but not to exceed the sum of fifteen thousand dollars ($15,000.00). Such death benefit shall be payable apart and separate from the payment of the member's accumulated contributions on his death pursuant to the provisions of subsection (f) of this Section 128-27. For 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; provided that he shall not have retired or that payment of a refund of his contributions shall not have been issued by the Retirement System.
"The death benefit provided in this subsection (1) shall not be payable, notwithstanding the member's compliance with all the conditions set forth in the preceding paragraph, if his death occurs
(1) After June 30, 1969 and after he has attained age 70; or
(2) After December 31, 1969 and after he has attained age 69; or
(3) After December 31, 1970 and after he has attained age 68; or
(4) After December 31, 1971 and after he has attained age 67; or
(5) After December 31, 1972 and after he has attained age 66; or
(6) After December 31, 1973 and after he has attained age 65.
"Notwithstanding the above provisions, the board of trustees may and is specifically authorized to purchase a contract or contracts of group life insurance with any life insurance company or companies licensed and authorized to transact business in this State for the purpose of insuring the lives of members in service, which policy contract or contracts shall provide death benefits upon the life of each member according to the terms and conditions otherwise appearing in this subsection. To that end the board of trustees is authorized and empowered to investigate the feasibility of utilizing group life insurance for the purpose of providing a death benefit for members comparable to the death benefits provided for herein.
"In administration of the death benefit the following shall apply:
(1) For the purpose of determining eligibility only, in this subsection "calendar year" shall mean any period of twelve consecutive months. For all other purposes in this subsection, "calendar year" shall mean the twelve months beginning January 1 and ending December 31.
"(2) Last day of actual service shall be:
a. When employment has been terminated (except by retirement), the last day the member actually worked.
b. When employment has not been terminated, the date on which an absent member's sick and annual leave expire.
"(3) A member shall be deemed to have retired on the day he becomes eligible to receive monthly retirement benefits.
"(4) A member in service who has filed an early election of option, without designating a date of retirement, is deemed to have retired on the first day of the month following the date of his death."
Sec. 14. Early election of option. G.S. 128-27 is hereby further amended by adding a .new subsection at the end thereof, to be designated as Subsection (m), and to read as follows:
"(m) Early Election of Option. — Any member in service, after attainment of age 55 or completion of 30 years of creditable service, may elect one of the following options which would become effective and remain in effect until a final election has been made:
"(1) Designation of a single beneficiary who would receive the monthly benefit provided by Option 2 of subsection (g) above. Such benefit would be computed by assuming that the member had retired on the first day of the month following the date of his death.
"(2) Designation of a single beneficiary who would have the right upon the member's death to elect to receive either the benefit under (1) of this subsection or a lump sum return of the member's accumulated contributions.
"Such elections would become effective under the conditions stated if a form provided for this purpose by the board of trustees is executed and filed with the Retirement System 30 days or more before the member's death."
Sec. 15. Administration of system - annual valuation. Subsection (p) of G.S. 128-28 is hereby amended by rewriting said subsection in its entirety to read as follows:
"(p) On the basis of such tables and interest assumption rate as the board of trustees shall adopt, the actuary shall make an annual valuation of the assets and liabilities of the funds of the System created by this chapter."
Sec. 16. References. All references in this Act to sections of the General Statutes are references to the 1964 Replacement Volume except references to the 1967 Cumulative Supplement in which case references are to the statutes in the 1967 Cumulative Supplement to the 1964 Replacement Volume of the General Statutes.
Sec. 17. All laws and clauses of laws in conflict with this Act are hereby repealed.
Sec. 18. This Act shall become effective July 1, 1969.
In the General Assembly read three times and ratified, this the 7th day of May, 1969.