GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	1 

SENATE BILL 1011

Short Title:  State Employees RIF Rights/Options.	(Public)

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Sponsors: Senators McDaniel, Kincaid, Page, Winner, Carpenter, Martin of Guilford, Hobbs, Ledbetter, McKoy, Warren, Albertson, Clark, Foxx, Carrington, Lucas, Ballantine, Jordan, Conder, Plexico, Sherron, and Davis.

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Referred to:  Pensions and Retirement/Insurance/State Personnel

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May 4, 1995

A BILL TO BE ENTITLED
AN ACT PROVIDING EARLY RETIREMENT OPTIONS TO STATE EMPLOYEES SUBJECT TO THE STATE PERSONNEL ACT WHO ARE SEPARATED FROM  EMPLOYMENT DUE TO REDUCTIONS IN FORCE AND OTHERWISE RELATING TO THE RIGHTS AND BENEFITS OF EMPLOYEES SEPARATED FROM STATE EMPLOYMENT DUE TO REDUCTIONS IN FORCE.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 126-7.1 reads as rewritten:
"§ 126-7.1.  Posting requirement; State employees receive priority consideration; reduction-in-force rights and benefits; severance.
(a)	All vacancies for which any State agency, department, or institution openly recruit shall be posted within at least the following: 
(1)	The personnel office of the agency, department, or institution having the vacancy; and
(2)	The particular work unit of the agency, department, or institution having the vacancy
in a location readily accessible to employees.  If the decision is made, initially or at any time while the vacancy remains open, to receive applicants from outside the recruiting agency, department, or institution, the vacancy shall be listed with the Office of State Personnel for the purpose of informing current State employees of such vacancy.  The State agency, department, or institution may not receive approval from the Office of State Personnel to fill a job vacancy if the agency, department, or institution cannot prove to the satisfaction of the Office of State Personnel that it complied with these posting requirements.  The agency, department, or institution which hires any person in violation of these posting requirements shall pay such person when employment is discontinued as a result of such violation for the work performed during the period of time between his initial employment and separation.
(a1)	For the purposes of this section, 'State employee' means a State employee in a permanent position appointment subject to this Chapter.
(a2)	State employees to be affected by a planned reduction in force shall be notified of the reduction in force as soon as practicable, and in any event, no less than 60 days prior to the effective date of the reduction in force.
(a3)	The State Personnel Commission shall adopt rules to provide that priority consideration for State employees separated from State employment as the result of reductions in force is to enable a State employee's return to career service at a salary grade and salary rate equal to that held in the most recent position.  The State Personnel Commission shall provide that a State employee who:
(1)	Accepts a position at the same salary grade shall be paid at the same salary rate as the employee's previous position.
(2)	Accepts a position at a lower salary grade than the employee's previous position shall be paid at the same rate as the previous position unless the salary rate exceeds the maximum of the new salary grade.  When the salary rate exceeds the maximum of the salary grade, the employee's new salary rate shall be reduced by no more than ten percent (10%).
(a4)	Each State department, agency, or institution shall continue to pay the State Health Plan employee-only premium for employees who are separated due to a reduction in force for the entire period that the employee remains eligible for priority reemployment consideration pursuant to this section.  At the end of a State employee's eligibility for priority reemployment consideration, the employee and the employee's dependents may opt to remain in the State Health Plan on a self-contributing basis at the same premium rate as active State employees.
(a5)	Notwithstanding any other provision of law:
(1)	The State Personnel Commission and the Teachers' and State Employees' Retirement System of North Carolina shall provide unreduced retirement benefits for employees separated due to a reduction in force who are at least 50 years of age and have at least 25 years of service.
(2)	For employees with at least 20 years of service who are less than 50 years of age, five years shall be added to their age for retirement purposes.
(a6)	A State employee separated from employment due to a reduction in force shall receive severance salary continuation, payable monthly, consisting of two components:  (i) a service factor which provides for a continuation of salary as follows:
Years of Service	Payment
Less than 1 year	2 weeks
1 but less than 5 years	1 month
5 but less than 10 years	2 months
10 but less than 20 years	3 months
20 or more years	4 months
and, in addition, (ii) an age adjustment factor, if the employee is 40 years of age or more.  'Age adjustment factor' means a percentage of an employee's annual salary used in determining a State employee's salary severance continuation amount that reflects the employee's age over 39 years to recognize that older employees, although protected by law from discrimination on the basis of age, do have a more difficult time finding new employment due to a lack of transferable skills, current salary level, geographic location, and other factors, as follows:
Years of Service	Age Adjustment Factor
Less than 1 year	2.5%
1 but less than 5 years	2.5%
5 but less than 10 years	2.5%
10 but less than 20 years	2.5%
20 or more years	2.5%.
However, the age adjustment factor shall not exceed the service factor.
(b)	Subsection (a) of this section does not apply to vacancies which must be filled immediately to prevent work stoppage or the protection of the public health, safety, or security.
(c)	If a State employee subject to this section:
(1)	Applies for another position of State employment; and
(2)	Has substantially equal qualifications as an applicant who is not a State employee
then the State employee shall receive priority consideration over the applicant who is not a State employee.  
(c1)	If a State employee who has been separated due to reduction in force or who has been given notice of imminent separation due to reduction in force:
(1)	Applies for another position of State employment equal to or lower in salary grade than the position held by the employee at the time of notification or separation; and
(2)	Is determined qualified for that position
then within the separating agency, the State employee shall receive priority consideration over other applicants including those who are current State employees not affected by the reduction in force.  Within all other agencies, the State employee shall receive priority consideration over other applicants from outside State government, but shall receive equal consideration with other applicants who are current State employees not affected by the reduction in force.  This priority shall remain in effect for a period of 12 months from the date the employee receives notification of separation by reduction in force.  State employees separated due to reduction in force shall receive higher priority than other applicants with employment or reemployment priorities, except that the reemployment priority created by G.S. 126-5(e)(1) shall be considered as equal.  The reduction-in-force priority created by this subsection shall be administered in accordance with rules promulgated by the State Personnel Commission.
(c2)	If the applicants for a position include current State employees, a State employee with more than five years of service shall receive priority consideration over a State employee having less than five years of service in the same or related position classification.  This reemployment priority shall be given by all State departments, agencies, and institutions with regard to positions subject to this Chapter.
(d)	'Qualifications' within the meaning of subsection (c) of this section shall consist of:
(1)	Training or education;
(2)	Years of experience; and
(3)	Other skills, knowledge, and abilities that bear a reasonable functional relationship to the abilities and skills required in the job vacancy applied for."
Sec. 2.  G.S. 135-40.2 reads as rewritten:
"§ 135-40.2.  Eligibility.
(a)	The following persons are eligible for coverage under the Plan, on a noncontributory basis, subject to the provisions of G.S. 135-40.3:
(1)	All permanent full-time employees of an employing unit who meet the following conditions:
a.	Paid from general or special State funds, or
b.	Paid from non-State funds and in a group for which his or her employing unit has agreed to provide coverage.
	Employees of State agencies, departments, institutions, boards, and commissions not otherwise covered by the Plan who are employed in permanent job positions on a recurring basis and who work 30 or more hours per week for nine or more months per calendar year are covered by the provisions of this subdivision.
(1a)	Permanent hourly employees as defined in G.S. 126-5(c4) who work at least one-half of the workdays of each pay period.
(2)	Retired teachers, State employees, members of the General Assembly, and retired State law enforcement officers who retired under the Law Enforcement Officers' Retirement System prior to January 1, 1985.
(2a)	Surviving spouses of:
a.	Deceased retired employees, provided the death of the former plan member occurred prior to October 1, 1986; and
b.	Deceased teachers, State employees, and members of the General Assembly who are receiving a survivor's alternate benefit under any of the State-supported retirement programs, provided the death of the former plan member occurred prior to October 1, 1986.
(3)	Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 29(b).
(3a)	Employees of the General Assembly, not otherwise covered by this section, as determined by the Legislative Services Commission, except for legislative interns and pages.
(4)	Members of the General Assembly.
(5)	Notwithstanding the provisions of subsection (e) of this section, employees on official leave of absence while completing a full-time program in school administration in an approved program as a Principal Fellow in accordance with Article 5C of Chapter 116 of the General Statutes.
(6)	Former employees eligible under G.S. 126-7.1(a3) during the employee's period of priority consideration.
(b)	The following person shall be eligible for coverage under the Plan, on a fully contributory basis, subject to the provisions of G.S. 135-40.3:
(1)	Repealed by Session Laws 1983, c. 761, s. 255.
(2)	Former members of the General Assembly who enroll before October 1, 1986.
(2a)	For enrollments after September 30, 1986, former members of the General Assembly if covered under the Plan at termination of membership in the General Assembly.
(3)	Surviving spouses of deceased former members of the General Assembly who enroll before October 1, 1986.
(3a)	Employees of the General Assembly, not otherwise covered by this section, as determined by the Legislative Services Commission, except for legislative interns and pages.
(3b)	For enrollments after September 30, 1986, surviving spouses of deceased former members of the General Assembly, if covered under the Plan at the time of death of the former member of the General Assembly.
(4)	All permanent part-time employees (designated as half-time or more) of an employing unit who meets the conditions outlined in subdivision (a)(1)a above, and who are not covered by the provisions of G.S. 135-40.2(a)(1).
(4a)	Permanent hourly employees as defined in G.S. 126-5(c4) who work less than one-half of the workdays of each pay period.
(5)	The spouses and eligible dependent children of enrolled employees, retirees, and members of the General Assembly.
(6)	Blind persons licensed by the State to operate vending facilities under contract with the Department of Human Resources, Division of Services for the Blind and its successors, who are:
a.	Operating such a vending facility;
b.	Former operators of such a vending facility whose service as an operator would have made these operators eligible for an early or service retirement allowance under Article 1 of this Chapter had they been members of the Retirement System; and
c.	Former operators of such a vending facility who attain five or more years of service as operators and who become eligible for and receive a disability benefit under the Social Security Act upon cessation of service as an operator.
(7)	Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 29(j).
(8)	Surviving spouses of deceased retirees and surviving spouses of deceased teachers, State employees, and members of the General Assembly provided the death of the former Plan member occurred after September 30, 1986, and the surviving spouse was covered under the Plan at the time of death.
(9)	Repealed by Session Laws 1987, c. 857, s. 11.1.
(10)	Any eligible dependent child of the deceased retiree, teacher, State employee, or member of the General Assembly, provided the child was covered at the time of death of the retiree, teacher, State employee, or member of the General Assembly (or was in posse at the time and is covered at birth under this Part), or was covered under the Plan on September 30, 1986. Any eligible spouse or dependent child of a person eligible under subdivision (8) of this subsection if the spouse or dependent child was enrolled before October 1, 1986.
(11)	Former employees eligible under G.S. 126-7.1(a3), their spouses, and dependent children, after expiration of the employee's period of priority consideration.
(c)	No person shall be eligible for coverage as an employee or retired employee and as a dependent of an employee or retired employee at the same time. In addition, no person shall be eligible for coverage as a dependent of more than one employee or retired employee at the same time.
(d)	Former employees who are receiving disability retirement benefits or disability income benefits pursuant to Article 6 of Chapter 135 of the General Statutes, provided the former employee has at least five years of retirement membership service at the time of disability, shall be eligible for the benefit provisions of this Plan, as set forth in this Part, on the same basis as a retired employee.  Such coverage shall terminate as of the end of the month in which such former employee is no longer eligible for disability retirement benefits or disability income benefits pursuant to Article 6 of this Chapter.
(e)	Employees on official leave of absence without pay may elect to continue this group coverage at group cost provided that they pay the full employee and employer contribution through the employing unit during the leave period.
(f)	For the support of the benefits made available to any member vested at the time of retirement, their spouses or surviving spouses, and the surviving spouses of employees who are receiving a survivor's alternate benefit under G.S. 135-5(m) of those associations listed in G.S. 135-27(a), licensing and examining boards under G.S. 135-1.1, the North Carolina Art Society, Inc., and the North Carolina Symphony Society, Inc., each association, organization or board shall pay to the Plan the full cost of providing these benefits under this section as determined by the Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan. In addition, each association, organization or board shall pay to the Plan an amount equal to the cost of the benefits provided under this section to presently retired members of each association, organization or board since such benefits became available at no cost to the retired member.
	(g)  An eligible surviving spouse and any eligible dependent child of a deceased retiree, teacher, State employee, or member of the General Assembly shall be eligible for group benefits under this section without waiting periods for preexisting conditions provided coverage is elected within 90 days after the death of the former plan member.
(h)	No person shall be eligible for coverage as an employee or retired employee or as a dependent of an employee or retired employee upon a finding by the Executive Administrator or Board of Trustees or by a court of competent jurisdiction that the employee or dependent knowingly and willfully made or caused to be made a false statement or false representation of a material fact in a claim for reimbursement of medical services under the Plan."
Sec. 3.  This act becomes effective July 1, 1995, and applies as to all active State employees subject to the State Personnel Act on or after that date.