NORTH CAROLINA GENERAL ASSEMBLY
1971 SESSION

CHAPTER 117
SENATE BILL 232

AN ACT RELATING TO ADMINISTERING THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM.

The General Assembly of North Carolina do enact:

Section 1.  G.S. 135-1(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 membership service producing the highest such average."
Sec. 2.  (a) G.S. 135-1 is hereby amended by inserting a new subdivision immediately following subdivision (7), 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 or teacher in the unit of the Retirement System for which he is performing full-time work."
(b)	G.S. 135-8(b)3, as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by striking out the second sentence beginning with the word "City" in line 8 and ending with the word "term" in line 24, and inserting in lieu thereof the following:
"City boards of education and county boards of education in each and every county and city which has employees compensated from other than the State appropriation shall pay to the State Retirement System the same per centum of the compensation that the State of North Carolina pays and shall transmit same to the State Retirement System monthly: Provided, that for the purpose of enabling the boards of education to make such payment, the tax levying authorities are hereby authorized, empowered and directed to provide the necessary funds therefor."
Sec. 3.  G.S. 135-1(10), as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by striking out all of the first sentence following the colon in line 4 and inserting in lieu thereof the words, "Provided, that the term 'employee' shall not include any justice of the Supreme Court, any judge of the Court of Appeals, any judge of the superior court, any member or officer of the General Assembly, or any part-time or temporary employee."
Sec. 4.  G.S. 135-1 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. 5.  G.S. 135-1(20) 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. 6.  G.S. 135-3(7)d, as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by striking out all of said subdivision d following the first sentence and inserting in lieu thereof the following:
"Upon his subsequent retirement, he shall be entitled to 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. 135-3(7)e, as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by rewriting said subdivision to read as follows:
"e.	Should a teacher or 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. 135-1(3)."
Sec. 8.  G.S. 135-3(8)b, as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by striking out all of said subdivision 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 (8), any member who separates from service on or after July 1, 1971, and prior to the attainment of the age of 60 years, for any reason other than death or retirement for disability as provided in Section 135-5, 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. 135-4(e), as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by striking out all of subsection (e) following the semicolon in line 5 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. 10.  (a) G.S. 135-4(e), 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 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. 135-3(3) and who subsequently returns to service for a period of five years, may thereafter repay in a lump sum 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."
(b)	G.S. 135-8(b)4, as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by striking out the period at the end, inserting a comma in lieu thereof, and adding the words, "except as provided for in G.S. 135-4(e)."
Sec. 11.  G.S. 135-5(a)(2) is hereby amended by striking out all of subdivision (2) following the colon in line 4 and inserting in lieu thereof the following:
"Provided that, upon the approval of his employer, any member may be continued in service on a year to year basis."
Sec. 12.  (a) G.S. 135-5(e)(2) is hereby amended by rewriting the first sentence to read as follows:
"(2)	Should a disability beneficiary under the age of 60 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 same rate he paid prior to disability; provided that, on and after July 1, 1971, if a disability beneficiary under the age of 62 years is 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 uniform contribution rate payable by all members."
(b)	G.S. 135-5(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 described 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. 13.  G.S. 135-5(g), as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by rewriting the last three lines to read as follows:
"Option 5. The member may elect:
(1)	To receive a reduced retirement allowance under the conditions of Option 2 or Option 3, as provided for above, with the modification that if both he and the person nominated die within ten 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 provision 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. 14.  (a) G.S. 135-5(l), as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by striking out the last sentence of the first paragraph of subsection (l) and inserting in lieu thereof the following:
"For the purposes of this subsection (l), 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. 135-5(l), as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by striking out the words "(except by retirement)" in the first line of subdivision (2)a on page 200 of the Cumulative Supplement, and by striking out all of subdivisions (3) and (4) on page 200 of the Cumulative Supplement, and redesignating subdivision (5) on page 200 of the Cumulative Supplement as subdivision (3).
Sec. 15.  (a) G.S. 135-5(m), as the same appears in the 1969 Cumulative Supplement to the General Statutes, 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 2 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 was 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 to apply."
(b)	G.S. 135-5(f), as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by rewriting the fourth sentence, beginning with the word "Upon" in line 14, 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. 16.  (a) G.S. 135-18.1(a), as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by rewriting that portion of the last sentence beginning with the word "Any" in line 12 and ending with the word "System" in line 18 to read as follows:
"Any person who becomes a member of this Retirement System on or after July 1, 1971, shall be entitled to transfer to this Retirement System his credits for membership and prior service in the local system: Provided, the actual transfer of employment is made while his account in the local system is active and such person shall request the local system to transfer his accumulated contributions, interest, and service credits to this Retirement System;".
(b)	G.S. 135-28(a), as the same appears in the 1969 Cumulative Supplement to the General Statutes, is hereby amended by rewriting the subsection to read as follows:
"(a)	Any member whose services as a teacher or State employee are terminated for any reason other than retirement or death, who, while his account remains active, becomes employed by an employer participating in the North Carolina Local Governmental Employees' Retirement System or an employer which brings its employees into participation in said System while his account is active, may elect to leave his total accumulated contributions in the Teachers' and State Employees' Retirement System during the period he is in the employment of such employer, or his account remains active in the local system. This subsection shall be effective retroactively as well as prospectively."
Sec. 17.  G.S. 135-18.1 is hereby amended by deleting subsection (d) and redesignating subsection (e) as subsection (d).
Sec. 18.  G.S. 135-28 is hereby amended by adding a new subsection, to be designated as subsection (c), and to read as follows:
"(c)	Any member who, on or after July 1, 1971, becomes employed by an employer of the North Carolina Local Governmental Employees' Retirement System as provided in (a) above shall be entitled to waive the provisions of (b) above and to transfer to the local system his credits for membership and prior service in this System provided such member shall request this System to transfer his accumulated contributions, interest and service credits to the local system. If such request is made, in addition to the member's accumulated contributions, interest and service credits, there shall be transferred to the local system the amount of reserve held in this System as a result of previous employer contributions on behalf of the transferring employee."
Sec. 19.  This act shall become effective July 1, 1971, except subsection (b) of Section 2 which shall become effective July 1, 1972.
In the General Assembly read three times and ratified, this the 25th day of March, 1971.