Bill Text: NC S886 | 2015-2016 | Regular Session | Chaptered
Bill Title: Retirement Amendments
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2016-07-22 - Ch. SL 2016-108 [S886 Detail]
Download: North_Carolina-2015-S886-Chaptered.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2015
SESSION LAW 2016-108
SENATE BILL 886
AN ACT TO HONOR CAPTAIN BRADLEY LONG AND ALL FUTURE FIREFIGHTERS AND RESCUE SQUAD WORKERS KILLED IN THE LINE OF DUTY BY AMENDING THE NC FIREFIGHTERS' AND RESCUE SQUAD WORKERS' PENSION FUND TO PROVIDE A SURVIVORSHIP BENEFIT FOR MEMBERS KILLED IN THE LINE OF DUTY; TO CONSOLIDATE PUBLIC RECORDS LAWS RELATING TO RETIREMENT; AND TO MAKE OTHER REtirement and ADMINISTRATIVE CHANGES.
The General Assembly of North Carolina enacts:
SECTION 1.(a) G.S. 58‑86‑2 is amended by adding a new subdivision to read:
"(9a) "Killed in the line of duty" has the same meaning as in G.S. 143‑166.2(c)."
SECTION 1.(b) G.S. 58‑86‑55 is amended by adding a new subsection to read:
"(d1) Benefits shall be paid in the following manner when a member is killed in the line of duty and the requirements of Article 12A of Chapter 143 of the General Statutes are met:
(1) If the member had been receiving a monthly pension fund benefit prior to being killed in the line of duty, there shall be paid to the member's principal beneficiary, if only one principal beneficiary is eligible, an amount of one hundred seventy dollars ($170.00) per month beginning the month following the member's month of death, payable until the beneficiary's death.
(2) If the member had been receiving a monthly pension fund benefit prior to being killed in the line of duty and the beneficiary is not payable as described in subdivision (1) of this subsection, a lump sum payment equal to the difference between the amount paid into the member's separate account by or on behalf of the member and the amount received by the member as a pensioner will be paid to the eligible beneficiaries, or if there are no eligible beneficiaries, shall be paid to the member's estate.
(3) If the member had not yet begun receiving a monthly benefit prior to being killed in the line of duty, there shall be paid to the member's principal beneficiary, if only one principal beneficiary is eligible, an amount of one hundred seventy dollars ($170.00) per month beginning the month following the month the member would have attained age 55, or if the member had already attained age 55, beginning the month following the member's month of death, payable until the beneficiary's death.
(4) If the member had not begun receiving a monthly benefit prior to being killed in the line of duty and the beneficiary is not payable as described in subdivision (3) of this subsection, a lump sum payment equal to the member's contributions will be paid to the eligible beneficiaries, or if there are no eligible beneficiaries, a return of the contributions shall be paid to the member's estate.
A beneficiary under this subsection shall not be required to make the monthly payment of ten dollars ($10.00) as required by G.S. 58‑86‑35 and G.S. 58‑86‑40 after the member has been killed in the line of duty."
SECTION 1.(c) G.S. 58‑86‑60 reads as rewritten:
"§ 58‑86‑60. Payments in lump sums.
The board shall direct payment in lump sums from the fund in the following cases:
(1) To any firefighter or rescue squad worker upon the attaining of the age of 55 years, who, for any reason, is not qualified to receive the monthly retirement pension and who was enrolled as a member of the fund, an amount equal to the amount paid into the fund by him. This provision shall not be construed to preclude any active firefighter or rescue squad worker from completing the requisite number of years of active service after attaining the age of 55 years necessary to entitle the firefighter or rescue squad worker to the pension.
(2) If any firefighter or
rescue squad worker diesdies, except if the individual is killed in
the line of duty, before attaining the age at which a pension is payable to
the firefighter or rescue squad worker under the provisions of this Article,
there shall be paid to his or her surviving spouse, or if there be no
surviving spouse, to the person responsible for his or her child or children,
or if there be no surviving spouse or children, then to his or her heirs at law
as may be determined by the board or to his or her estate, if it is
administered and there are no heirs,to the person or persons designated
by the member, or if the member has not designated a beneficiary, to the
surviving spouse of the deceased member, or if not survived by a designated
beneficiary or spouse, to the deceased member's legal representative, an
amount equal to the amount paid into the member's separate account by or on
behalf of the said firefighter or rescue squad worker.
(3) If any firefighter or
rescue squad worker diesdies, except if the individual is killed in
the line of duty, after beginning to receive the pension payable to the
firefighter or rescue squad worker by this Article, and before receiving an
amount equal to the amount paid into the fund by him or her, there shall be
paid to his or her surviving spouse, or if there be no surviving spouse,
then to the person responsible for his or her child or children, or if there be
no surviving spouse or children, then to his or her heirs at law as may be
determined by the board or to his or her estate, if it is administered and
there are no heirs,to the person or persons designated by the member, or
if the member has not designated a beneficiary, to the surviving spouse of the
deceased retired member, or if not survived by a designated beneficiary or
spouse, to the deceased retired member's legal representative, an amount
equal to the difference between the amount paid into the member's separate
account by or on behalf of the said firefighter or rescue squad worker and the
amount received by him or her as a pensioner.
(4) Any member who withdraws from the fund shall, upon proper application, be paid all moneys without accumulated earnings on the payments after the time they were made. A member may not purchase time under G.S. 58‑86‑45 for which he or she has received a refund."
SECTION 1.(d) G.S. 58‑86‑55 is amended by adding a new subsection to read:
"(d2) Benefits shall be paid in the following manner when a member is killed in the line of duty and the requirements of Article 12A of Chapter 143 of the General Statutes are met:
(1) If the member had been receiving a monthly pension fund benefit prior to being killed in the line of duty, there shall be paid to the member's spouse an amount of one hundred seventy dollars ($170.00) per month beginning the month following the member's month of death, payable until the spouse's death.
(2) If the member had been receiving a monthly pension fund benefit prior to being killed in the line of duty and the spouse is not payable as described in subdivision (1) of this subsection, a lump sum payment equal to the difference between the amount paid into the member's separate account by or on behalf of the member and the amount received by the member as a pensioner will be paid to the member's estate.
(3) If the member had not yet begun receiving a monthly benefit prior to being killed in the line of duty, there shall be paid to the member's spouse an amount of one hundred seventy dollars ($170.00) per month beginning the month following the month the member would have attained age 55, or if the member had already attained age 55, beginning the month following the member's month of death, payable until the spouse's death.
(4) If the member had not begun receiving a monthly benefit prior to being killed in the line of duty and the spouse is not payable as described in subdivision (3) of this subsection, a lump sum payment equal to the member's contributions will be paid to the eligible beneficiaries, or if there are no eligible beneficiaries, a return of the contributions shall be paid to the member's estate.
A beneficiary under this subsection shall not be required to make the monthly payment of ten dollars ($10.00) as required by G.S. 58‑86‑35 and G.S. 58‑86‑40 after the member has been killed in the line of duty."
SECTION 1.(e) Section 1(a) and 1(d) become effective June 1, 2016, and apply to benefits paid when a member is killed in the line of duty on or after June 1, 2016, but before July 1, 2018. Section 1(e) becomes effective June 1, 2016. Section 1(b) and 1(c) become effective July 1, 2018, and apply to benefits paid when a member is killed in the line of duty on or after that date.
SECTION 1.(f) G.S. 58‑86‑55(d2) is repealed July 1, 2018.
SECTION 2.(a) The February 5, 2008, Attorney General's advisory opinion entitled "Advisory Opinion: Confidentiality of Retirement Benefit Information; Session Law 2007‑508" concluded that information about retirement benefits was intended to be included among those records required to be maintained for public inspection by each department, agency, institution, commission, and bureau of the State and that as a result the Retirement Systems Division of the Department of the State Treasurer makes that information available for public inspection and examination. The General Assembly finds that the interests of clarity require statutory language providing guidance to the Retirement Systems Division in determining and maintaining consistency as to what information should be made available about the retirement accounts of State and local employees.
SECTION 2.(b) Article 1 of Chapter 135 of the General Statutes is amended by adding a new section to read:
"§ 135‑6.1. Member retirement record files held by the Retirement System.
(a) The following definitions apply in this section:
(1) Employment‑related information. – As defined in G.S. 126‑22(b)(3).
(2) Personal information. – As defined in G.S. 126‑22(b)(3).
(3) Retirement file. – Any employment‑related, retirement‑related, or personal information of members in a State‑administered retirement plan gathered by the Retirement Systems Division of the Department of State Treasurer.
(4) Retirement‑related information. – Information including membership and service details, benefit payment information, and other information the Retirement Systems Division of the Department of State Treasurer deems necessary to administer a retirement plan.
(b) Member retirement files are not subject to inspection and examination as authorized by G.S. 132‑6 except as provided in G.S. 135‑6(p), G.S. 128‑28(q), and subsections (c), (d), and (e) of this section.
(c) The following information regarding members and individuals in receipt of a recurring monthly benefit, if held by the Retirement System, is public and subject to subsection (d) of this section:
(1) Name.
(2) Age.
(3) Date of membership in the applicable Retirement System, first service earned date, date of first enrollment, date of first employment, and date of retirement.
(4) The terms of any contract by which the member is employed whether written or oral, past and current, to the extent that the Retirement System has the written contract or a record of the oral contract in its possession.
(5) Current or most recently held position or title.
(6) Compensation and other relevant remuneration history and benefits paid.
(7) Date, general description, and type of each change and the corresponding employing agency.
(8) The office or station to which the member is currently assigned, if any.
(9) The record of benefit payments made by one of the Retirement Systems or Disability Benefits Programs administered by the Department of State Treasurer to a member or to the survivor, beneficiary, or alternate payee of a member.
(10) Purchases of educational leave.
(d) Subject only to rules and policies for the safekeeping of member retirement files adopted by the Board of Trustees, every person having custody of the retirement file information outlined in subsection (b) of this section shall permit the information to be inspected and examined and copies thereof made by any person during regular business hours. Any person who is denied access to any retirement file for the purpose of inspecting, examining, or copying the file has a right to compel compliance with the provisions of this section by application to a court of competent jurisdiction for a writ of mandamus or other appropriate relief.
(e) The Retirement Systems Division of the Department of State Treasurer may disclose the name and mailing address of former State employees, former public school employees, or former community college employees to domiciled, nonprofit organizations representing 10,000 or more retired State government, local government, or public school employees.
(f) All information other than the information listed in subsection (c) of this section contained in a retirement file is confidential and not open for inspection and examination except to the following persons:
(1) The member, or the member's authorized agent, who may examine his or her own retirement file, except for any information concerning a medical disability, mental or physical, that a prudent physician would not divulge to a patient. A member's medical record may be disclosed to a licensed physician in writing by the member.
(2) A member of the General Assembly who may inspect and examine records under the authority of G.S. 120‑19.
(3) A party by authority of a proper court order may inspect and examine a particular confidential portion of a member's retirement file.
(g) Any public official or employee who knowingly and willfully permits any person to have access to or custody or possession of any portion of a retirement file designated as confidential by this section, unless the person is one specifically authorized by this section to have access thereto for inspection and examination, is guilty of a Class 3 misdemeanor and upon conviction shall only be fined in the discretion of the court but not in excess of five hundred dollars ($500.00).
(h) Any person not specifically authorized by this section to have access to a retirement file designated as confidential by this section, who knowingly and willfully examines, removes, or copies any portion of a confidential retirement file, is guilty of a Class 3 misdemeanor and upon conviction shall be fined in the discretion of the court but not in excess of five hundred dollars ($500.00)."
SECTION 2.(c) Article 3 of Chapter 128 of the General Statutes is amended by adding a new section to read:
"§ 128‑33.1. Public records held by the Retirement System.
(a) The following definitions apply in this section:
(1) Employment‑related information. – As defined in G.S. 126‑22(b)(3).
(2) Personal information. – As defined in G.S. 126‑22(b)(3).
(3) Retirement file. – Any employment‑related, retirement‑related, or personal information of members in a State‑administered retirement plan gathered by the Retirement Systems Division of the Department of State Treasurer.
(4) Retirement‑related information. – Information including membership and service details, benefit payment information, and other information the Retirement Systems Division of the Department of State Treasurer deems necessary to administer a retirement plan.
(b) Member retirement files are not subject to inspection and examination as authorized by G.S. 132‑6 except as provided in G.S. 135‑6(p), G.S. 128‑28(q), and subsections (c), (d), and (e) of this section.
(c) The following information regarding members and individuals in receipt of a recurring monthly benefit, if held by the Retirement System, is public subject to subsection (d) of this section:
(1) Name.
(2) Age.
(3) Date of membership in the applicable Retirement System, first service earned date, date of first enrollment, date of first employment, and date of retirement.
(4) The terms of any contract by which the member is employed whether written or oral, past and current, to the extent that the Retirement System has the written contract or a record of the oral contract in its possession.
(5) Current or most recently held position or title.
(6) Compensation and other relevant remuneration history and benefits paid.
(7) Date, general description, and type of each change and the corresponding employing agency.
(8) The office or station to which the member is currently assigned, if any.
(9) The record of benefit payments made by one of the Retirement Systems or Disability Benefits Programs administered by the Department of State Treasurer to a member or to the survivor, beneficiary, or alternate payee of a member.
(10) Purchases of educational leave.
(d) Subject only to rules and policies for the safekeeping of member retirement files adopted by the Board of Trustees, every person having custody of the retirement file information outlined in subsection (b) of this section shall permit the information to be inspected and examined and copies thereof made by any person during regular business hours. Any person who is denied access to any retirement file for the purpose of inspecting, examining, or copying the file has a right to compel compliance with the provisions of this section by application to a court of competent jurisdiction for a writ of mandamus or other appropriate relief.
(e) The Retirement Systems Division of the Department of State Treasurer may disclose the name and mailing address of former State employees, former public school employees, or former community college employees to domiciled, nonprofit organizations representing 10,000 or more retired State government, local government, or public school employees.
(f) All information other than the information listed in subsection (c) of this section contained in a retirement file is confidential and not open for inspection and examination except to the following persons:
(1) The member, or the member's authorized agent, who may examine his or her own retirement file, except for any information concerning a medical disability, mental or physical, that a prudent physician would not divulge to a patient. A member's medical record may be disclosed to a licensed physician in writing by the member.
(2) A member of the General Assembly who may inspect and examine records under the authority of G.S. 120‑19.
(3) A party by authority of a proper court order may inspect and examine a particular confidential portion of a member's retirement file.
(g) Any public official or employee who knowingly and willfully permits any person to have access to or custody or possession of any portion of a retirement file designated as confidential by this section, unless the person is one specifically authorized by this section to have access thereto for inspection and examination, is guilty of a Class 3 misdemeanor and upon conviction shall only be fined in the discretion of the court but not in excess of five hundred dollars ($500.00).
(h) Any person not specifically authorized by this section to have access to a retirement file designated as confidential by this section, who knowingly and willfully examines, removes, or copies any portion of a confidential retirement file, is guilty of a Class 3 misdemeanor and upon conviction shall be fined in the discretion of the court but not in excess of five hundred dollars ($500.00)."
SECTION 2.(d) G.S. 126‑22 reads as rewritten:
"§ 126‑22. Personnel files not subject to inspection under § 132‑6.
(a) Except as provided in G.S. 126‑23 and G.S. 126‑24, personnel files of State employees shall not be subject to inspection and examination as authorized by G.S. 132‑6.
(b) For purposes of this Article the following definitions apply:
(1) "Employee" means any current State employee, former State employee, or applicant for State employment.
(2) "Employer" means any State department, university, division, bureau, commission, council, or other agency subject to Article 7 of this Chapter.
(3) "Personnel
file" means any employment‑related or personal information gathered
by an employer, the Retirement Systems Division of the Department of State
Treasurer, employer or by the Office of State Human Resources.
Employment‑related information contained in a personnel file includes
information related to an individual's application, selection, promotion,
demotion, transfer, leave, salary, contract for employment, benefits, suspension,
performance evaluation, disciplinary actions, and termination. Personal
information contained in a personnel file includes an individual's home
address, social security number, medical history, personal financial data,
marital status, dependents, and beneficiaries.
(4) "Record" means the personnel information that each employer is required to maintain in accordance with G.S. 126‑23.
(c) Personnel files of
former State employees who have been separated from State employment for 10 or
more years may be open to inspection and examination except for papers and
documents relating to demotions and to disciplinary actions resulting in the
dismissal of the employee and personnel files maintained by the Retirement
Systems Division of the Department of State Treasurer.employee.
Retirement files maintained by the Retirement Systems Division of the Department
of State Treasurer shall be made public pursuant to G.S. 128‑33.1
and G.S. 135‑6.1.
(d) Notwithstanding any provision of this section to
the contrary, the Retirement Systems Division of the Department of State
Treasurer may disclose the name and mailing address of former State employees
to domiciled, nonprofit organizations representing 10,000 or more retired State
government, local government, or public school employees."
SECTION 2.(e) G.S. 115C‑321(b1) is repealed.
SECTION 2.(f) G.S. 115D‑29(c) is repealed.
SECTION 2.(g) G.S. 153A‑98(c3) is repealed.
SECTION 2.(h) G.S. 160A‑168(c3) is repealed.
SECTION 3.(a) G.S. 135‑10.1 reads as rewritten:
"§ 135‑10.1. Failure to respond.
If a member fails to respond within
120 days after preliminary option figures and the Form 6‑E or Form 7‑E
are mailed,transmitted to the member, or if a member fails to
respond within 120 days after the effective date of retirement, whichever is
later, the Form 6 or Form 7 shall be null and void; the retirement system shall
not be liable for any benefits due on account of the voided application, and a
new application must be filed establishing a subsequent effective date of
retirement. If an applicant for disability retirement fails to furnish
requested additional medical information within 90 days following such request,
the application shall be declared null and void under the same conditions
outlined above, unless the applicant is eligible for early or service
retirement in which case the application shall be processed accordingly, using
the same effective date as would have been used had the application for
disability retirement been approved. The Director of the Retirement Systems
Division, acting on behalf of the Board of Trustees, may extend the 120‑day
limitation provided for in this section when a member has suffered
incapacitation such that a reasonable person would not have expected the member
to be able to complete the required paperwork within the regular deadline, or
when an omission by the Retirement Systems Division prevents the member from
having sufficient time to meet the regular deadline."
SECTION 3.(b) G.S. 128‑32.1 reads as rewritten:
"§ 128‑32.1. Failure to respond.
If a member fails to respond within
120 days after preliminary option figures and the Form 6‑E or Form 7‑E
are mailed,transmitted to the member, or if a member fails to
respond within 120 days after the effective date of retirement, whichever is
later, the Form 6 or Form 7 shall be null and void; the retirement system shall
not be liable for any benefits due on account of the voided application, and a
new application must be filed establishing a subsequent effective date of
retirement. If an applicant for disability retirement fails to furnish
requested additional medical information within 90 days following such request,
the application shall be declared null and void under the same conditions
outlined above, unless the applicant is eligible for early or service
retirement in which case the application shall be processed accordingly, using
the same effective date as would have been used had the application for
disability retirement been approved. The Director of the Retirement Systems
Division, acting on behalf of the Board of Trustees, may extend the 120‑day
limitation provided for in this section when a member has suffered
incapacitation such that a reasonable person would not have expected the member
to be able to complete the required paperwork within the regular deadline, or
when an omission by the Retirement Systems Division prevents the member from
having sufficient time to meet the regular deadline."
SECTION 4. G.S. 147‑79(a) reads as rewritten:
"(a) The amount of funds deposited by the State Treasurer in an official depository shall be adequately secured by deposit insurance, surety bonds, letters of credit issued by a Federal Home Loan Bank, or investment securities of such nature, in such amounts, and in such manner, as may be prescribed by rule or regulation of the State Treasurer with the approval of the Governor and Council of State. No security is required for the protection of funds remitted to and received by a bank or trust company designated by the State Treasurer under G.S. 142‑1 and acting as paying agent for the payment of the principal of or interest on bonds or notes of the State."
SECTION 5. The Board of Trustees of the Local Governmental Employees' Retirement System shall develop a "State Contribution Rate Stabilization Policy" for the North Carolina Firefighters' and Rescue Squad Workers' Pension Fund and report it to the Office of State Budget and Management and the Fiscal Research Division on or before March 1, 2017.
SECTION 6.(a) G.S. 135‑6(b) reads as rewritten:
"(b) Membership of Board;
Terms. – The Board shall consist of the following 13 members, as
follows:members:
(1) The State Treasurer, ex officio;officio.
(2) The Superintendent of
Public Instruction, ex officio;officio.
(3) The Director of the Office of State Human Resources, ex officio.
(3)(4) NineEight
members to be appointed by the Governor and confirmed by the Senate of North
Carolina. One of the appointive members shall be a member of the teaching
profession of the State; one of the appointive members shall be a
representative of higher education appointed by the Governor for a term of four
years commencing July 1, 1969, and quadrennially thereafter; one of the
appointive members shall be a retired teacher who is drawing a retirement
allowance, appointed by the Governor for a term of four years commencing July
1, 1969, and quadrennially thereafter; one shall be a retired State employee
who is drawing a retirement allowance, appointed by the Governor for a term of
four years commencing July 1, 1977, and quadrennially thereafter; one to be a
general State employee, and two who are not members of the teaching profession
or State employees; two to be appointed for a term of two years, two for a term
of three years and one for a term of four years; one appointive member shall be
a law‑enforcement officer employed by the State, appointed by the
Governor, for a term of four years commencing April 1, 1985. One member shall
be an active or retired member of the North Carolina National Guard appointed
by the Governor for a term of four years commencing July 1, 2013. At the
expiration of these terms of office the appointment shall be for a term of four
years;years.
(4)(5) Two members
appointed by the General Assembly, one appointed upon the recommendation of the
Speaker of the House of Representatives, and one appointed upon the
recommendation of the President Pro Tempore of the Senate in accordance with
G.S. 120‑121. Neither of these members may be an active or retired
teacher or State employee or an employee of a unit of local government. The
initial members appointed by the General Assembly shall serve for terms
expiring June 30, 1983. Thereafter, their successors shall serve for two‑year
terms beginning July 1 of odd‑numbered years. Vacancies in appointments
made by the General Assembly shall be filled in accordance with G.S. 120‑122."
SECTION 6.(b) G.S. 135‑6(g) reads as rewritten:
"(g) Officers and Other
Employees; Salaries and Expenses. – The State Treasurer shall be ex officio chairmanchair
of the Board of Trustees. The Board of Trustees shall, by a majority vote of
all the members, appoint a director, who may be, but need not be, one of its
members. The salary of the director of the Retirement System is subject to the
provisions of Chapter 126 of the General Statutes of North Carolina. Trustees
and shall appoint a director. The Board of Trustees shall engage such
actuarial and other service as shall be required to transact the business of
the Retirement System. The compensation of all persons, other than the
director, engaged by the Board of Trustees, and all other expenses of the Board
necessary for the operation of the Retirement System, shall be paid at such
rates and in such amounts as the Board of Trustees shall approve, subject to
the approval of the Director of the Budget."
SECTION 6.(c) G.S. 136‑6(o) reads as rewritten:
"(o) 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. The annual valuation shall include a supplementary section that provides an analysis of assets on a market basis using the 30‑year treasury rate as of December 31 of the year of the valuation as the discount rate."
SECTION 6.(d) G.S. 128‑28(h) reads as rewritten:
"(h) Officers and Other
Employees, Salaries and Expenses. – The Board of Trustees shall elect from
its membership a chairman, and shall, by a majority vote of all the members,
appoint a director, who may be, but need not be, one of its members. The
State Treasurer shall be ex officio chair of the Board of Trustees and shall
appoint a director. The Board of Trustees shall engage such actuarial and
other service as shall be required to transact the business of the Retirement
System. The compensation of all persons engaged by the Board of Trustees, and
all other expenses of the Board necessary for the operation of the Retirement
System, shall be paid at such rates and in such amounts as the Board of
Trustees shall approve."
SECTION 6.(e) G.S. 128‑28(p) reads as rewritten:
"(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. The annual valuation shall include a supplementary section that provides an analysis of assets on a market basis using the 30‑year treasury rate as of December 31 of the year of the valuation as the discount rate."
SECTION 7.(a) G.S. 115C‑341.2 reads as rewritten:
"§ 115C‑341.2. Department of State Treasurer sponsored 403(b) option.
(a) In addition to the opportunities
for local boards of education to offer section 403(b) of the Internal Revenue
Code of 1986 retirement annuities and/or mutual funds to their employees under
G.S. 115C‑341, the Department of State Treasurer may establish an
approved third‑party vendor of retirement offerings as described in
section 403(b) of the Internal Revenue Code of 1986, as now and hereafter
amended, pursuant to which employees of local school boards may enter into
nonforfeitable 403(b) plan options by way of salary reduction through the
auspices of the Department of State Treasurer. This statewide plan of 403(b)
offerings shall be known as the "North Carolina Public School
Teachers' and Professional Educators' Investment Plan." The vendor
authorized under this section shall be selected by use of StateSupplemental
Retirement Board of Trustees procurement procedures,procedures
under Article 5 of Chapter 135 of the General Statutes, with the goal of
attaining lower administrative fees and enhanced services for participants and
employer compliance with applicable law and regulations. Eligible employees of
local school boards shall all be allowed to use this vendor for the tax‑deferred
403(b) option of their choice.
(b) The criteria in this subsection apply to the Department of State Treasurer's 403(b) offerings to employees of local school boards under this section.
(1) Annuity contracts, trust accounts, and/or custodial accounts shall be administered by a qualified third‑party administrator that shall, under written agreement with the Department of State Treasurer, provide custodial, record‑keeping, and administrative services. The third‑party administrator may also be the selected vendor for the North Carolina Public School Teachers' and Professional Educators' Investment Plan.
For employers choosing to participate in the North Carolina Public School Teachers' and Professional Educators' Investment Plan, the third‑party administrator shall, at a minimum, provide the following:
a. Maintain a written plan document.
b. Review hardship withdrawal requests, loan requests, and other disbursements permitted under section 403(b) of the Internal Revenue Code of 1986.
c. Maintain specimen salary reduction agreements for the employer and employees of that employer to initiate payroll deferrals.
d. Monitor maximum contributions.
e. Coordinate responses to the Internal Revenue Service in any case of an IRS audit.
f. Generate educational communication materials to employees concerning the enrollment process, program eligibility, and investment options.
g. Maintain internal reports to ensure compliance with Section 403(b) of the Internal Revenue Code and Title 26 of the Code of Federal Regulations.
h. Provide compliance monitoring/oversight for all 403(b) plans established under G.S. 115C‑341 within each participating local board of education plan by creating and establishing the necessary connections and processes with existing and future vendors.
i. Keep an updated schedule
of vendor fees and commissions as to the Department's statewide plan.plan
of 403(b) offerings.
(2) Governance and oversight
of the North Carolina Public School Teachers' and Professional Educators'
Investment Plan will be performed under Article 5 of Chapter 135 of the
General Statutes by the Department of State Treasurer and the Supplemental
Retirement Board of Trustees for the North Carolina Supplemental
Retirement Plans established pursuant to G.S. 135‑96. Because of
the administrative and record‑keeping duties enumerated in subdivision
(1) of this subsection, any existing vendor of a 403(b) with a participating
employer must either agree to share data with the State's 403(b) vendor under
this provision (so as to permit oversight over contribution limits, loans, and
hardship withdrawals) or be directed by the participating employer to cease
accepting new contributions, loans, and hardship withdrawals.
(3) Investment options shall
be solely determined by the Department of State Treasurer and the
Supplemental Retirement Board of Trustees for the North Carolina
Supplemental Retirement Plans consistent with section 403(b) of the
Internal Revenue Code of 1986, as amended.
(4) Investment staff of the
Department of State Treasurer may make recommendations to the State Treasurer
and the Supplemental Retirement Board of Trustees for the North
Carolina Supplemental Retirement Plans as to appropriate investment
options. ThePursuant to G.S. 135‑96, the State
Treasurer and Board of Trustees shall have sole responsibility for the
selection of the vendor, third‑party administrator, providers of
investment options, and any other service provider for the North Carolina
Public School Teachers' and Professional Educators' Investment Plan.
(5) All contributions made in accordance with the provisions of section 403(b) of the Internal Revenue Code of 1986, as amended, and this section shall be remitted directly to the administrator and held by the administrator in a custodial account on behalf of each participating employee. Any investment gains or losses shall be credited to those accounts. The forms of payment and disbursement procedures shall be consistent with those generally offered by similar annuity contracts, trust accounts, and custodial accounts and applicable federal and State statutes governing those contracts and accounts.
(6) Any local board of education may elect to make contributions to the employee's account on behalf of the employee. The employer shall take whatever action is necessary to implement this section.
(7) The design and administration of annuity contracts, trust accounts, and custodial accounts under this provision shall comply with all applicable provisions of the Internal Revenue Code of 1986, as amended."
SECTION 7.(b) G.S. 115D‑25.4(b) reads as rewritten:
"(b) The criteria in this subsection apply to the Department of State Treasurer's 403(b) offerings to employees of local boards of trustees under this section:
(1) Annuity contracts, trust accounts, and/or custodial accounts shall be administered by a qualified third‑party administrator that shall, under written agreement with the Department of State Treasurer, provide custodial, record‑keeping, and administrative services. The third‑party administrator may also be the selected vendor for the North Carolina Public School Teachers' and Professional Educators' Investment Plan.
For local boards of trustees as employers choosing to participate in the North Carolina Public School Teachers' and Professional Educators' Investment Plan, the third‑party administrator shall, at a minimum, provide the following:
a. Maintain a written plan document.
b. Review hardship withdrawal requests, loan requests, and other disbursements permitted under section 403(b) of the Internal Revenue Code of 1986.
c. Maintain specimen salary reduction agreements for the employer and employees of that employer to initiate payroll deferrals.
d. Monitor maximum contributions.
e. Coordinate responses to the Internal Revenue Service in any case of an IRS audit.
f. Generate educational communication materials to employees concerning the enrollment process, program eligibility, and investment options.
g. Maintain internal reports to ensure compliance with section 403(b) of the Internal Revenue Code and Title 26 of the Code of Federal Regulations.
h. Provide compliance monitoring/oversight for all 403(b) plans established under G.S. 115D‑25 within each participating local board of trustees plan by creating and establishing the necessary connections and processes with existing and future vendors.
i. Keep an updated schedule
of vendor fees and commissions as to the Department's statewide plan.plan
of 403(b) offerings.
(2) Governance and oversight
of the North Carolina Public School Teachers' and Professional Educators'
Investment Plan will be performed under Article 5 of Chapter 135 of the
General Statutes by the Department of State Treasurer and the Supplemental
Retirement Board of Trustees for the North Carolina Supplemental
Retirement Plans established pursuant to G.S. 135‑96. Because of
the administrative and record‑keeping duties enumerated in subdivision
(1) of this subsection, any existing vendor of a 403(b) with a participating
employer must either agree to share data with the State's 403(b) vendor under
this provision (so as to permit oversight over contribution limits, loans, and
hardship withdrawals) or be directed by the participating employer to cease
accepting new contributions, loans, and hardship withdrawals.
(3) Investment options shall
be solely determined by the Department of State Treasurer and the Supplemental
Retirement Board of Trustees for the North Carolina Supplemental
Retirement Plans consistent with section 403(b) of the Internal Revenue
Code of 1986, as amended.
(4) Investment staff of the
Department of State Treasurer may make recommendations to the State Treasurer
and the Supplemental Retirement Board of Trustees for the North
Carolina Supplemental Retirement Plans as to appropriate investment
options. ThePursuant to G.S. 135‑96, the State
Treasurer and Board of Trustees shall have sole responsibility for the
selection of the vendor, third‑party administrator, providers of
investment options, and any other service provider for the North Carolina
Public School Teachers' and Professional Educators' Investment Plan.
(5) All contributions made in accordance with the provisions of section 403(b) of the Internal Revenue Code of 1986, as amended, and this section shall be remitted directly to the administrator and held by the administrator in a custodial account on behalf of each participating employee. Any investment gains or losses shall be credited to those accounts. The forms of payment and disbursement procedures shall be consistent with those generally offered by similar annuity contracts, trust accounts, and custodial accounts and applicable federal and State statutes governing those contracts and accounts.
(6) Any local board of trustees may elect to make contributions to the employee's account on behalf of the employee. The local board of trustees shall take whatever action is necessary to implement this section.
(7) The design and administration of annuity contracts, trust accounts, and custodial accounts under this provision shall comply with all applicable provisions of the Internal Revenue Code of 1986, as amended."
SECTION 8. G.S. 135‑109 reads as rewritten:
"§ 135‑109. Reports of earnings.
The Department of State Treasurer
and Board of Trustees shall may require each beneficiary to
annually provide a statement of the beneficiary's income received as
compensation for services, including fees, commissions, or similar items,
income received from business, and benefits received from the Social Security
Administration, the federal Veterans Administration, any other federal agency,
under the North Carolina Workers' Compensation Act, or under the provisions of
G.S. 127A‑108. The benefit payable to a beneficiary who does not or
refuses to provide the information requested within 60120 days
after such request shall not be paid a benefit may be suspended until
the information so requested is provided, and should such refusal or failure to
provide such information continue for 240180 days after such
request the right of a beneficiary to a benefit under the Article may be
terminated."
SECTION 9. If any provision of this act or its application is held invalid, the invalidity does not affect other provisions or applications of this act that can be given effect without the invalid provisions or application, and to this end, the provisions of this act are severable.
SECTION 10. Except as otherwise provided, this act is effective when it becomes law.
In the General Assembly read three times and ratified this the 1st day of July, 2016.
s/ Tom Apodaca
Presiding Officer of the Senate
s/ Tim Moore
Speaker of the House of Representatives
s/ Pat McCrory
Governor
Approved 4:03 p.m. this 22nd day of July, 2016
