State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_126 > GS_126-8_5

§ 126‑8.5.  Discontinuedservice retirement allowance and severance wages for certain State employees.

(a)        When the Directorof the Budget determines that the closing of a State institution or a reductionin force will accomplish economies in the State Budget, he shall pay either adiscontinued service retirement allowance or severance wages to any affectedState employee, provided reemployment is not available. As used in thissection, "economies in the State Budget" means economies resulting fromelimination of a job and its responsibilities or from a lack of funds tosupport the job. In determining whether to pay a discontinued serviceretirement allowance or severance wages, the Director of the Budget shallconsider the recommendation of the department head involved and anyrecommendation of the State Personnel Director. Severance wages shall not bepaid to an employee who chooses a discontinued service retirement. Severancewages shall not be subject to employer or employee retirement contributions. Severancewages shall be paid according to the policies adopted by the State PersonnelCommission.

Notwithstanding any otherprovisions of the State's retirement laws, any employee of the State who is amember of the Teachers' and State Employees' Retirement System or the Law‑EnforcementOfficers' Retirement System and who has his job involuntarily terminated as aresult of economies in the State Budget may be entitled to a discontinuedservice retirement allowance, subject to the approval of the employing agencyand the availability of agency funds. An unreduced discontinued serviceretirement allowance, not otherwise allowed, may be approved for employees with20 or more years of creditable retirement service who are at least 55 years ofage; or a discontinued service retirement allowance, not otherwise allowed, maybe approved for employees with 20 or more years of creditable retirementservice who are at least 50 years of age, reduced by one‑fourth of onepercent (¼ of 1%) for each month that retirement precedes his fifty‑fifthbirthday. In cases where a discontinued service retirement allowance isapproved, the employing agency shall make a lump sum payment to theAdministrator of the State Retirement Systems equal to the actuarial presentvalue of the additional liabilities imposed upon the System, to be determinedby the System's consulting actuary, as a result of the discontinued serviceretirement, plus an administrative fee to be determined by the Administrator.

The salary used to determineseverance wages under this section is the last annual salary except that if theemployee was promoted within the previous 12 months, the last annual salary isthat annual salary prior to the promotion. If the annual salary prior to thepromotion is used, it shall be adjusted to account for any across‑the‑boardlegislative salary increases. Excluded from any calculation are any benefitssuch as, but not limited to, overtime pay, shift pay, holiday premium, orlongevity pay.

(b)        Any employeeseparated from State government and paid severance wages under this sectionshall not be employed under a contractual arrangement by any State agency,other than the constituent institutions of The University of North Carolina andthe constituent institutions of the North Carolina Community College System,until 12 months have elapsed since the separation. This subsection does notaffect any reduction in force rights that the employee may have. (1979, c. 838, s. 22; 1983,c. 761, s. 225; c. 923, s. 217(R); 1983 (Reg. Sess., 1984), c. 1034, s. 251;1985 (Reg. Sess., 1986), c. 981, s. 1; c. 1024, s. 20; 1987, c. 177, s. 2; 1989(Reg. Sess., 1990), c. 1066, s. 36(a); 1998‑212, s. 28.28(a); 2006‑203,s. 6.)