GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	2 

SENATE BILL 733
Second Edition Engrossed 6/8/95

Short Title:  Out-of-State Retirement.	(Public)

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Sponsors: Senators Warren, Sherron, Hobbs, McKoy, Kerr, Martin of Guilford, Perdue, McDaniel, Hoyle, Dannelly, and Albertson.

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Referred to:  Pensions and Retirement/Insurance/State Personnel

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April 17, 1995

A BILL TO BE ENTITLED
AN ACT TO RESTORE THE PROVISION FOR PURCHASE OF OUT-OF-STATE SERVICE IN THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM AND THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 128-26 is amended by adding a new subsection to read:
"( j2)	Notwithstanding any other provision of this Chapter, any member and any retired member as herein described may purchase creditable service previously rendered to any state, territory, or other governmental subdivision of the United States other than this State by paying a total lump-sum payment determined as follows:
(1)	For members who completed 10 years of prior and current membership service, and retired members who completed 10 years of prior and current membership service prior to retirement, and whose current membership began on or before January 1, 1988, and who make such purchase within three years after first becoming eligible, the cost shall be an amount equal to the monthly compensation the member earned when he first entered current membership service, times the employee contribution rate at that time, times the months of service to be purchased, times two, with sufficient interest added thereto so as to equal the full cost of allowing such service, plus an administrative fee to be set by the Board of Trustees.
(2)	For members who complete five years of prior and current membership service, and retired members who complete five years of prior and current membership service prior to retirement, and eligible members and retired members covered by subdivision (1) of this subsection, whose current membership began on or before January 1, 1988, but who did not or do not make such purchase within three years after first becoming eligible, the cost shall be an amount equal to the full liability of the service credits calculated on the basis of the assumptions used for the purposes of the actuarial valuation of the System's liabilities and shall take into account the retirement allowance arising on account of the additional service credits commencing at the earliest age at which the member could retire on an unreduced allowance, as determined by the Board of Trustees upon the advice of the consulting actuary, plus an administrative fee to be set by the Board of Trustees.  Notwithstanding the foregoing provisions of this subsection that provide for the purchase of service credits, the term 'full liability' includes assumed postretirement allowance increases, as determined by the Board of Trustees, from the earliest age at which a member could retire on an unreduced service retirement allowance.
Creditable service under this subsection shall be allowed only at the rate of one year of out-of-state service for each two years of service in this State, with a maximum allowable of 10 years of out-of-state service.  Such service is limited to full-time service which would be allowable under the laws governing this System.  Credit will be allowed only if no benefit is allowable in another public retirement system as a  result of the service."
Sec. 2.  G.S. 135-4 is amended by adding a new subsection to read:
"( l1)	Notwithstanding any other provision of this Chapter, any member and any retired member as herein described may purchase creditable service previously rendered to any state, territory, or other governmental subdivision of the United States other than this State by paying a total lump-sum payment determined as follows:
(1)	For members who completed 10 years of membership service, and retired members who completed 10 years of membership service prior to retirement, whose current membership began on or before July 1, 1981, and who make such purchase within three years after first becoming eligible, the cost shall be an amount equal to the monthly compensation the member earned when he first entered current membership service, times the employee contribution rate at that time, times the months of service to be purchased, times two, with sufficient interest added thereto so as to equal the full cost of allowing such service, plus an administrative fee to be set by the Board of Trustees.
(2)	For members who complete five years of membership service, and retired members who complete five years of membership service prior to retirement, and eligible members and retired members covered by subdivision (1) of this subsection, whose current membership began on or before July 1, 1981, but who did not or do not make such purchase within three years after first becoming eligible, the cost shall be an amount equal to the full liability of the service credits calculated on the basis of the assumptions used for the purposes of the actuarial valuation of the System's liabilities and shall take into account the retirement allowance arising on account of the additional service credits commencing at the earliest age at which the member could retire on an unreduced allowance, as determined by the Board of Trustees upon the advice of the consulting actuary, plus an administrative fee to be set by the Board of Trustees.  Notwithstanding the foregoing provisions of this subsection that provide for the purchase of service credits, the term 'full liability' includes assumed postretirement allowance increases, as determined by the Board of Trustees, from the earliest age at which a member could retire on an unreduced service retirement allowance.
Creditable service under this subsection shall be allowed only at the rate of one year of out-of-state service for each two years of current membership service in this State, with a maximum allowable of 10 years of out-of-state service.  Such service is limited to full-time service which would be allowable under the laws governing this System.  Credit will be allowed only if no benefit is allowable in another public retirement system as a  result of the service."
Sec. 3.  This act is effective upon ratification.