GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	2 

SENATE BILL 538
Pensions & Retirement and Insurance Committee Substitute Adopted 4/28/97

Short Title:  Professional Firefighters' Retirement. 	(Public)

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Sponsors: 

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Referred to:  Appropriations.

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March 27, 1997

A BILL TO BE ENTITLED
AN ACT TO DEFINE A PROFESSIONAL FIREFIGHTERS' BENEFIT ACCRUAL RATE FOR MEMBERS AND BENEFICIARIES OF THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 128-21 is amended by adding a new subdivision to read:
"(17a)	'Professional firefighter' means a full-time, paid employee of an employer, maintaining a fire department certified by the North Carolina Department of Insurance, who is actively serving in a position with assigned primary duties and responsibilities for the prevention, detection, and suppression of fire."
Section 2.  G.S. 128-24(5) reads as rewritten:
"(5)	The provisions of this subdivision (5) shall apply to any member whose membership is terminated on or after July 1, 1965, and who becomes entitled to benefits hereunder in accordance with the provisions hereof.
a.	Notwithstanding any other provision of this Chapter, any member who separates from service prior to the attainment of the age of 60 years for any reason other than death or retirement for disability as provided in G.S. 128-27(c), after completing 15 or more years of creditable service, and who leaves his total accumulated contributions in said System shall have the right to retire on a deferred retirement allowance upon attaining the age of 60 years; provided that such member may retire only upon written application to the Board of Trustees setting forth at what time, not less than one day nor more than 90 days subsequent to the execution and filing thereof, he desires to be retired; and further provided that in the case of a member who so separates from service on or after July 1, 1967, the aforestated requirement of 15 or more years of creditable service shall be reduced to 12 or more years of creditable service; and further provided that in the case of a member who so separates from service on or after July 1, 1971, or whose account is active on July 1, 1971, the aforestated requirement of 12 or more years of creditable service shall be reduced to five or more years of creditable service. Such deferred retirement allowance shall be computed in accordance with the service retirement provisions of this Article pertaining to a member who is not a law enforcement officer or eligible former law enforcement officer.
b.	In lieu of the benefits provided in paragraph a of this subdivision, any member who separates from service prior to the attainment of the age of 60 years, for any reason other than death or retirement for disability as provided in G.S. 128-27(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; provided that such member may so retire only upon written application to the Board of Trustees setting forth at what time, not less than one day nor more than 90 days subsequent to the execution and filing thereof, he desires to be retired. Such early retirement allowance so elected shall be equal to the deferred retirement allowance otherwise payable at the attainment of the age of 60 years reduced by the percentage thereof indicated below.
  Age at	Percentage
Retirement	Reduction
59	7
58	14
57	20
56	25
55	30
54	35
53	39
52	43
51	46
50	50
b1.	In lieu of the benefits provided in paragraphs a and b of this subdivision, any member who is a law enforcement officer or a professional firefighter at the time of separation from service prior to the attainment of the age of 50 years, for any reason other than death or disability as provided in this Article, after completing 15 or more years of creditable service in this capacity immediately prior to separation from service, and who leaves his total accumulated contributions in this System, may elect to retire on a deferred early retirement allowance upon attaining the age of 50 years or at any time thereafter; provided, that the member may commence retirement only upon written application to the Board of Trustees setting forth at what time, as of the first day of a calendar month, not less than one day nor more than 90 days subsequent to the execution and filing thereof, he desires to commence retirement. The deferred early retirement allowance shall be computed in accordance with the service retirement provisions of this Article pertaining to law enforcement officers or professional firefighters.
b2.	In lieu of the benefits provided in paragraphs a and b of this subdivision, any member who is a law enforcement officer or professional firefighter at the time of separation from service prior to the attainment of the age of 55 years, for any reason other than death or disability as provided in this Article, after completing five or more years of creditable service in this capacity immediately prior to separation from service, and who leaves his total accumulated contributions in this System may elect to retire on a deferred service retirement allowance upon attaining the age of 55 years or at any time thereafter; provided, that the member may commence retirement only upon written application to the Board of Trustees setting forth at what time, as of the first day of a calendar month not less than one day nor more than 90 days subsequent to the execution and filing thereof, he desires to commence retirement. The deferred service retirement allowance shall be computed in accordance with the service retirement provisions of this Article pertaining to law enforcement officers or professional firefighters.
b3.	Deferred retirement allowance of members retiring on or after July 1, 1995. – In lieu of the benefits provided in paragraphs a. and b. of this subdivision, any member who separates from service prior to attainment of age 60 years, after completing 20 or more years of creditable service, and who leaves his total accumulated contributions in said System, may elect to retire on a deferred retirement allowance upon attaining the age of 50 years or any time thereafter; provided that such member may so retire only upon written application to the Board of Trustees setting forth at what time, not less than one day nor more than 90 days subsequent to the execution and filing thereof, he desires to be retired. Such deferred retirement allowance shall be computed in accordance with the service retirement provisions of this Article pertaining to a member who is not a law enforcement officer or an eligible former law enforcement officer.
c.	Should a beneficiary who retired on an early or service retirement allowance be reemployed, or otherwise engaged to perform services, by an employer participating in the Retirement System on a part-time, temporary, interim, or on fee-for-service basis, whether contractual or otherwise, and if such beneficiary earns an amount in any calendar year which exceeds fifty percent (50%) of the reported compensation, excluding terminal payments, during the 12 months of service preceding the effective date of retirement, or twenty thousand dollars ($20,000), whichever is greater, as hereinafter indexed, then the retirement allowance shall be suspended as of the first day of the month following the month in which the reemployment earnings exceed the amount above, for the balance of the calendar year. The retirement allowance of the beneficiary shall be reinstated as of January 1 of each year following suspension. The amount that may be earned before suspension shall be increased on January 1 of each year by the ratio of the Consumer Price Index to the Index one year earlier, calculated to the nearest tenth of a percent (1/10 of 1%).
d.	Should a beneficiary who retired on an early or service retirement allowance be restored to service as an employee, then the retirement allowance shall cease as of the first day of the month following the month in which the beneficiary is restored to service and the beneficiary shall become a member of the Retirement System and shall contribute thereafter as allowed by law at the uniform contribution payable by all members.
		Upon his subsequent retirement, he shall be paid a retirement allowance determined as follows:
1.	For a member who earns at least three years' membership service after restoration to service, the retirement allowance shall be computed on the basis of his compensation and service before and after the period of prior retirement without restriction; provided, that if the prior allowance was based on a social security leveling payment option, the allowance shall be adjusted actuarially for the difference between the amount received under the optional payment and what would have been paid if the retirement allowance had been paid without optional modification.
2.	For a member who does not earn three years' membership service after restoration to service, the retirement allowance shall be equal to the sum of the retirement allowance to which he would have been entitled had he not been restored to service, without modification of the election of an optional allowance previously made, and the retirement allowance that results from service earned since being restored to service; provided, that if the prior retirement allowance was based on a social security leveling payment option, the prior allowance shall be adjusted actuarially for the difference between the amount that would have been paid for each month had the payment not been suspended and what would have been paid if the retirement allowance had been paid without optional modification."
Section 3.  G.S. 128-27(a) reads as rewritten:
"(a)	Service Retirement Benefits. – 
(1)	Any member may retire upon written application to the Board of Trustees setting forth at what time, as of the first day of a calendar month, not less than one day nor more than 90 days subsequent to the execution and filing thereof, he desires to be retired: Provided, that the said member at the time so specified for his retirement shall have attained the age of 60 years and have at least five years of creditable service or shall have completed 30 years of creditable service, or if a professional firefighter, the member shall have completed at least 25 years of creditable service provided that the last five years of creditable service is as a professional firefighter.
(2)	Repealed by Session Laws 1983 (Regular Session, 1984), c. 1019, s. 1.
(3)	Repealed by Session Laws 1971, c. 325, s. 12.
(4)	Any member who was in service October 8, 1981, who had attained 60 years of age, may retire upon written application to the Board of Trustees setting forth at what time, as of the first day of a calendar month, not less than one day nor more than 90 days subsequent to the execution and filing thereof, he desires to be retired.
(5)	Any member who is a law enforcement officer or professional firefighter, and who attains age 50 and completes 15 or more years of creditable service in this capacity or who attains age 55 and completes five or more years of creditable service in this capacity, may retire upon written application to the Board of Trustees setting forth at what time, as of the first day of a calendar month, not less than one day nor more than 90 days subsequent to the execution and filing thereof, the member desires to be retired; provided, also, any member who has met the conditions required by this section but does not retire, and later becomes an employee other than as a law enforcement officer or professional firefighter, continues to have the right to commence retirement.
Section 4.  G.S. 128-27 is amended by adding a new subsection to read:
"( b16)	Service Retirement Allowance of Professional Firefighters Retiring on or After July 1, 1997. – Upon retirement from service, in accordance with subsection (a) of this section, on or after July 1, 1997, a member who is a professional firefighter or an eligible former professional firefighter shall receive the following service retirement allowance:
(1)	If the member's service retirement date occurs on or after the member's 55th birthday, and completion of five years of creditable service as a professional firefighter, or after the completion of 25 years of creditable service, provided that the last five years of creditable service are as a professional firefighter, the allowance shall be equal to the sum of:
a.	One and seventy-two hundredths percent (1.72%) of the member's average final compensation, multiplied by the number of years of creditable service earned by the member in service other than as a professional firefighter and for service as a professional firefighter earned prior to July 1, 1987, plus
b.	Two and fifty hundredths percent (2.50%) of the member's average final compensation, multiplied by the number of years of creditable service earned as a professional firefighter on or after July 1, 1987.
(2)	If the member's service retirement date occurs after the member's 50th birthday and before the member's 55th birthday with 15 or more years of creditable service as a professional firefighter and prior to completion of 25 years of creditable service, the member's retirement allowance shall be equal to the greater of:
a.	The service retirement allowance payable under G.S. 128-27(b16)(1) reduced by one-third of one percent (1/3 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following the month the member would have attained his 55th birthday; or
b.	The service retirement allowance as computed under G.S. 128-27(b16)(1) reduced by five percent (5%) times the difference between 25 years and the member's creditable service at retirement."
Section 5.  G.S. 128-30(d) is amended by adding a new subdivision to read:
"(10)	Notwithstanding the foregoing provisions of this subsection, beginning with the December 31, 1996, valuation, the actuary shall determine an additional 'accrued liability contribution' on account of each employer's professional firefighters.  This contribution shall be that percentage of the professional firefighters' compensation necessary to liquidate the 'existing unfunded accrued liability' over a period of years to be determined by the Board of Trustees.  The 'existing unfunded accrued liability' for each employer shall be equal to the accrued liability for additional benefits payable to each employer's professional firefighters who are members of the Retirement System on June 30, 1997.  The 'accrued liability contribution' determined on the basis of this subdivision shall be added to that determined under subdivisions (3) and (9) of this subsection and shall be included in the total amount payable under subdivision (5) of this subsection."
Section 6.  This act becomes effective July 1, 1997, and applies to persons retiring on or after that date.