CHAPTER 2 – RETIREMENT SYSTEMS
SUBCHAPTER 2A - DIVISIONAL RULES
SECTION .0100 - organizational rules
20 NCAC 02A .0101 ORGANIZATION: AUTHORITY
The retirement systems division provides the staffing for
the administration of the following agencies. The agencies and the statutory
authority of each are:
(1) Teachers' and State Employees' Retirement System of
North Carolina ‑‑ G.S. 135, Article 1;
(2) North Carolina Local Governmental Employees'
Retirement System ‑‑ G.S. 128, Article 3;
(3) Public Employees' Social Security Agency ‑‑
G.S. 135, Article 2;
(4) Legislative Retirement System of North Carolina ‑‑
G.S. 120‑4, Article 1A;
(5) Consolidated Judicial Retirement System of N.C. ‑‑
G.S. 135, Article 4;
(6) Supplemental Retirement Income Plan of North Carolina
‑‑ G.S. 135, Article 5;
(7) Disability Income Plan of North Carolina ‑‑
G.S. 135, Article 6;
(8) Firemen's and Rescue Squad Workers' Pension Fund ‑‑
G.S. 58, Article 86;
(9) Register of Deeds' Supplemental Pension Fund ‑‑
G.S. 161, Article 3.
History Note: Authority G.S. 128‑28(g); 135‑6(f);
Eff. February 1, 1976;
Readopted Eff. September 21, 1977;
Amended Eff. October 1, 1993; August 1, 1988; April 1,
1985; October 1, 1983.
20 NCAC 02A .0102 EXERCISE OF
AUTHORITY
All of the above named agencies, with the exception of the
N.C. Public Employees' Social Security Agency, exercise their prescribed
statutory powers independently of the State Treasurer. However, those
functions such as planning, organizing, staffing, directing, coordinating,
reporting and budgeting are performed under the direction and supervision of
the State Treasurer. In the case of the N.C. Public Employees' Social Security
Agency, all its prescribed statutory authority, powers, duties and functions,
including rule‑making, are vested in the State Treasurer.
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. February 1, 1976;
Readopted Eff. September 21, 1977;
Amended Eff. October 29, 1979.
20 NCAC 02A .0103 DELEGATION OF AUTHORITY TO DIRECTOR
Whenever the statutes specify that the board of trustees
itself will make specific findings in specific matters relating to specific
persons, the director may make the decisions administratively in accordance
with law and the rules, regulations and previous decisions of this board.
Appeals may be made from the decision of the director under the same procedures
used for contested cases.
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. September 21, 1977;
Amended Eff. October 29, 1979.
20 NCAC 02A .0104 EXERCISE OF EMPLOYER OPTIONS
No election of an optional element of a retirement system
shall be considered effective by the retirement system unless a duly certified
copy of the minutes of the governing board of the employer is received and the
terms under which the option is elected do not discriminate in favor of the
more highly compensated employees.
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. November 9, 1979.
20 NCAC 02A .0105 REPAYMENT FOR RIGHT TO RETIRE
(a) This Rule applies to any former member of a retirement
system who was in service on October 8, 1981 and was then of the appropriate
age to be eligible to retire with a service retirement allowance, and who
applied for a return of accumulated contributions from that retirement system
prior to July 15, 1983.
(b) Eligibility to commence receiving a service retirement
allowance, under all other statutory conditions, may be restored by the payment
of an amount by the former member to the retirement system.
(c) The amount payable by the former member is calculated
as follows:
(1) the amount of accumulated contributions
withdrawn, multiplied by;
(2) a factory equivalent to an interest rate of
six and one‑half percent compounded annually from year of withdrawal to
year of payment.
History Note: Authority G.S. 128‑27(a)(4); 128‑28(g);
135‑5(a)(3); 135‑6(f); 135‑57(d);
Eff. December 1, 1983.
SECTION .0200 ‑ RULE‑MAKING PROCEDURES
20 NCAC 02A .0201 ESTABLISHMENT OF PROCEDURAL RIGHTS
The rules in 20 NCAC 1F .0100 establish rule‑making
procedures for the Retirement Systems Division. All correspondence with the
Retirement Systems Division shall be addressed to:
Director of the Retirement Systems
Albemarle Building
325 North Salisbury Street
Raleigh, North Carolina 27603.
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. February 1, 1976;
Readopted Eff. September 21, 1977;
Amended Eff. October 1, 1993; October 29, 1979.
20 NCAC 02A .0202 DEFINITIONS
The following definitions apply to rule‑making in 20
NCAC 1F .0100:
(1) The "Division" is the Retirement Systems
Division and includes the agencies enumerated in 20 NCAC 2A .0101.
(2) The "Chief Officer" is the Director of the
Retirement Systems.
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. February 1, 1976;
Readopted Eff. September 21, 1977;
Amended Eff. October 1, 1993; October 29, 1979.
SECTION .0300 ‑ DECLARATORY RULINGS
20 NCAC 02A .0301 ESTABLISHMENT OF PROCEDURAL RIGHTS
The rules in 20 NCAC 1F .0200 establish declaratory ruling
procedures for the Retirement Systems Division.
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. February 1, 1976;
Readopted Eff. September 21, 1977;
Amended Eff. October 1, 1993.
20 NCAC 02A .0302 DEFINITIONS
The following definitions apply to declaratory rulings in 20
NCAC 1F .0200:
(1) The "Division" is the Retirement Systems
Division;
(2) The "Chief Officer" is the Director of
the Retirement Systems.
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. February 1, 1976;
Readopted Eff. September 21, 1977;
Amended Eff. October 1, 1993.
20 NCAC 02A .0303 RECONSIDERATION OF DECLARATORY RULINGS
(a) Whenever the director of the retirement systems has
issued a declaratory ruling pursuant to this Section, the petitioner may, at
his option, request that the ruling be reconsidered by the appropriate
governing board in a letter mailed or delivered to the director of the
retirement systems within 10 days of the receipt of such declaratory ruling.
In the event the petitioner requests reconsideration by the appropriate
governing board, the petitioner shall be entitled to appear concerning the
ruling before the appropriate governing board at a regularly scheduled
meeting. The governing board in question shall reconsider the ruling and may
readopt the same ruling or adopt a different ruling.
(b) In the event the petitioner does not request
reconsideration by the appropriate governing board as provided in (a) of this
Rule, the declaratory ruling issued by the director of the retirement systems
shall be considered the final declaratory ruling of the said governing board.
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. October 29, 1979.
SECTION .0400 ‑ CONTESTED CASE PROCEDURES
20 NCAC 02A .0401 ESTABLISHMENT OF PROCEDURAL RIGHTS
The rules in 20 NCAC 1F .0300 establish contested case
procedures for the Retirement Systems Division, with following amendments:
(1) Informal resolution of the problem begins when a
person calls, writes, or visits the state retirement system's office and
describes the problem to a counselor/field representative;
(2) If the problem is not resolved during this initial
contact, the person will be referred to the administrator of the appropriate
section;
(3) If the problem is not resolved at this level, the
person may discuss it with the Assistant Director of the Retirement Systems;
(4) If the aggrieved person is dissatisfied at this
point, he may discuss his difficulty with the Director of the Retirement
Systems.
History Note: Authority G.S. 150B‑23; 135‑6(f);
128‑28(g);
Eff. February 1, 1976;
Readopted Eff. September 21, 1977;
Amended Eff. October 1, 1993.
20 NCAC 02A .0402 DEFINITIONS
The following definitions apply to the contested case
procedures in 20 NCAC 1F .0300:
(1) The "Division" is the Retirement Systems
Division;
(2) The "Chief Officer" is the Director of
the Retirement Systems;
(3) The "Appropriate Board" is either the
Board of Trustees of the Teachers' and State Employees' Retirement System or
the Board of Trustees of the Local Governmental Employees' Retirement System or
the Board of Trustees of the Firemen's and Rescue Squad Workers' Pension Fund.
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. February 1, 1976;
Readopted Eff. September 21, 1977;
Amended Eff. October 1, 1993; October 1, 1983; October
29, 1979.
20 NCAC 02A .0403 HEARING OFFICERS
The director shall appoint the hearing officers.
History Note: Authority G.S. 128‑28(f); 135‑6(f);
Eff. February 1, 1976;
Readopted Eff. September 21, 1977;
Amended Eff. December 1, 1982.
SECTION .0500 ‑ GENERAL PROCEDURES
20 NCAC 02A .0501 GENERAL GUIDELINES
20 NCAC 02A .0502 RETIRING PROCEDURES
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. February 1, 1976;
Readopted Eff. September 21, 1977;
Amended Eff. October 29, 1979;
Repealed Eff. March 1, 1985.
20 NCAC 02A .0503 DUAL MEMBERSHIP ‑ COMPUTATION OF
SERVICE AND BENEFITS
(a) This Rule applies to any individual case in which the
member had one or more periods of dual membership in those rare cases which are
permitted by law. Dual membership means membership in two systems, at the same
time, by virtue of the same position.
(b) Eligibility shall be established for the death benefit,
survivor's alternate benefit, service, early or disability retirement or other
benefits which are based on creditable membership service for both systems
whenever eligibility is established in either one of the systems.
(c) A statute permitting transfer of membership and prior
service shall apply when a person becomes a member of a retirement system to
which the membership and prior service may be transferred from one or the other
of the systems in which the member had dual membership. This shall apply only
where the member is paid under only one retirement system for services rendered
subsequent to the last day of service in a position in which the member had
dual membership.
(d) Death benefit shall be limited to twenty thousand
dollars ($20,000) and shall be allocated pro rata between systems based on the
total compensation paid during the eligibility period.
(e) Other benefits shall be calculated by:
(1) Compute "Average Final
Compensation" on the basis of compensation on which the member would have
contributed had he not been earning "split" service as an employee
with dual membership.
(2) Compute creditable service as follows:
(A) the number of months of creditable service the
member earned or acquired which were based on compensation for service in only
one of the systems; plus
(B) the total of the fractional months earned by the
member in each of the systems during periods of dual membership; where
(C) the fractional months during periods of dual
membership is equal to the same fraction of a month that the compensation
reported to the system bears to the total compensation reported to all systems.
(3) Compute the annual allowance for a member
by multiplying the average final compensation times the creditable service as
computed in Subparagraphs (1) and (2) of this Paragraph.
(4) Allocate the benefits to be paid from each
system pro rata on share of creditable service in each system as computed in
(d)(2) of this Rule.
(f) This Rule shall apply to any individual case in which a
member with dual membership commenced retirement with one retirement system
prior to the effective date of this Rule and continued in service under the
other retirement system. In such cases, the retirement allowance of the member
from the system with which he first retired shall be recomputed in accordance
with this Rule and paid retroactively to the effective date of this Rule.
History Note: Authority G.S. 128‑28(g); 135‑6(f);
Eff. December 1, 1981;
Amended Eff. March 1, 1985.
20 NCAC 02A .0504 DIRECT DEPOSIT OF MONTHLY BENEFIT
PAYMENTS
(a) This Rule applies to any individual case in which a
beneficiary's monthly benefit was paid via electronic funds transfer (EFT) or
direct deposit, when such EFT was suspended by the Division in error. This
Rule does not apply to any individual case involving a delay by this Division
to initiate an EFT or a change in an existing EFT arrangement requested by a
beneficiary.
(b) The Division may reimburse non‑sufficient fund
charges incurred by a beneficiary due to the suspension in error of an existing
EFT arrangement when the beneficiary was not properly notified of the
suspension of such arrangement and upon receipt of satisfactory proof that such
charges were incurred.
(c) Any other bad check service charges or fees imposed by
any financial institution or merchant may be reimbursed at the discretion of
the Division Director upon receipt of satisfactory proof that such charges were
incurred.
(d) Any such reimbursement of NSF or bad check service
charges shall be paid from the Pension Accumulation Fund of the Retirement
System in which the beneficiary is in receipt of a benefit.
History Note: Authority G.S. 128‑28(g); 135‑6(f);
135‑52; 135‑102(c);
Eff. March 1, 1992.
SECTION .0600 ‑ INVESTMENTS
20 NCAC 02A .0601 INVESTMENT OF FUNDS
20 NCAC 02A .0602 INVESTMENT COMMITTEE
History Note: Authority G.S. 135‑6(f); 128‑28(g);
Eff. September 21, 1977;
Repealed Eff. March 1, 1985.
