Retirement System for Teachersand State Employees; Social Security; Health Insurance Program for Children.
Article 1.
Retirement System forTeachers and State Employees.
§ 135‑1. Definitions.
The following words andphrases as used in this Chapter, unless a different meaning is plainly requiredby the context, shall have the following meanings:
(1) "Accumulatedcontributions" shall mean the sum of all the amounts deducted from thecompensation of a member and accredited to his individual account in theannuity savings fund, together with regular interest thereon as provided inG.S. 135‑8.
(2) "Actuarialequivalent" shall mean a benefit of equal value when computed upon thebasis of such mortality tables as shall be adopted by the Board of Trustees,and regular interest.
(3) "Annuity"shall mean payments for life derived from that "accumulatedcontribution" of a member. All annuities shall be payable in equal monthlyinstallments.
(4) "Annuityreserve" shall mean the present value of all payments to be made onaccount of any annuity or benefit in lieu of any annuity, computed upon thebasis of such mortality tables as shall be adopted by the Board of Trustees,and regular interest.
(5) "Average finalcompensation" shall mean the average annual compensation of a memberduring the four consecutive calendar years of membership service producing thehighest such average; but shall not include any compensation, as determined bythe Board of Trustees, for the reimbursement of expenses or payments for housingor any other allowances whether or not classified as salary and wages. In theevent a member is or has been in receipt of a benefit under the provisions ofG.S. 135‑105 or G.S. 135‑106, the compensation used in thecalculation of "average final compensation" shall be the higher ofcompensation of the member under the provisions of this Article or compensationused in calculating the payment of benefits under Article 6 of this Chapter asadjusted for percentage increases in the post disability benefit.
(6) "Beneficiary"shall mean any person in receipt of a pension, an annuity, a retirementallowance or other benefit as provided by this Chapter.
(7) "Board ofTrustees" shall mean the Board provided for in G.S. 135‑6 toadminister the Retirement System.
(7a) a. "Compensation"shall mean all salaries and wages prior to any reduction pursuant to sections125, 401(k), 403(b), 414(h)(2), and 457 of the Internal Revenue Code, notincluding any terminal payments for unused sick leave, derived from public fundswhich are earned by a member of the Retirement System for service as anemployee or teacher in the unit of the Retirement System for which he isperforming full‑time work. In addition to the foregoing,"compensation" shall include:
1. Performance‑basedcompensation (regardless of whether paid in a lump sum, in periodicinstallments, or on a monthly basis);
2. Conversion ofadditional benefits to salary (additional benefits such as health, life, ordisability plans), so long as the benefits are other than mandated by State lawor regulation;
3. Payment of taxconsequences for benefits provided by the employer, so long as they constitutean adjustment or increase in salary and not a "reimbursement ofexpenses";
4. Payout of vacationleave so long as such payouts are permitted by applicable law and regulation;
5. Employeecontributions to eligible deferred compensation plans; and
6. Effective July 1,2009, payment of military differential wages.
b. "Compensation"shall not include any payment, as determined by the Board of Trustees, for thereimbursement of expenses or payments for housing or any other allowanceswhether or not classified as salary and wages. "Compensation"includes all special pay contribution of annual leave made to a 401(a) SpecialPay Plan for the benefit of an employee. Notwithstanding any other provision ofthis Chapter, "compensation" shall not include:
1. Supplement/allowanceprovided to employee to purchase additional benefits such as health, life, ordisability plans;
3. Employercontributions to eligible deferred compensation plans;
4. Employer‑providedfringe benefits (additional benefits such as health, life, or disabilityplans);
5. Reimbursement ofuninsured medical expenses;
6. Reimbursement ofbusiness expenses;
7. Reimbursement ofmoving expenses;
8. Reimbursement/paymentof personal expenses;
9. Incentive paymentsfor early retirement;
10. Bonuses paid incidentto retirement;
11. Contractbuyout/severance payments; and
12. Payouts for unusedsick leave.
c. In the event anemployer reports as "compensation" payments not specifically includedor excluded as "compensation", such payments shall be"compensation" for retirement purposes only if the employer pays theRetirement System the additional actuarial liability created by such payments.
(8) "Creditableservice" shall mean the total of "prior service" plus"membership service" plus service, both noncontributory andpurchased, for which credit is allowable as provided in G.S. 135‑4. In noevent, however, shall "creditable service" be deemed "membershipservice" for the purpose of determining eligibility for benefits accruingunder this Chapter.
(9) "Earnablecompensation" shall mean the full rate of the compensation that would bepayable to a teacher or employee if he worked in full normal working time. Incases where compensation includes maintenance, the Board of Trustees shall fixthe value of that part of the compensation not paid in money.
(10) "Employee"shall mean all full‑time employees, agents or officers of the State ofNorth Carolina or any of its departments, bureaus and institutions other thaneducational, whether such employees are elected, appointed or employed:Provided that the term "employee" shall not include any person who isa member of the Consolidated Judicial Retirement System, any member of theGeneral Assembly or any part‑time or temporary employee. Notwithstandingany other provision of law, "employee" shall include all employees ofthe General Assembly except participants in the Legislative Intern Program,pages, and beneficiaries in receipt of a monthly retirement allowance underthis Chapter who are reemployed on a temporary basis. "Employee" alsoincludes any participant whose employment is interrupted by reason of servicein the Uniformed Services, as that term is defined in section 4303(16) of theUniformed Services Employment and Reemployment Rights Act, Public Law 103‑353,if that participant was an employee at the time of the interruption; if theparticipant does not return immediately after that service to employment with acovered employer in this System, then the participant shall be deemed "inservice" until the date on which the participant was first eligible to beseparated or released from his or her involuntary military service. In allcases of doubt, the Board of Trustees shall determine whether any person is anemployee as defined in this Chapter. "Employee" shall also mean everyfull‑time civilian employee of the Army National Guard and Air NationalGuard of this State who is employed pursuant to section 709 of Title 32 of theUnited States Code and paid from federal appropriated funds, but held by thefederal authorities not to be a federal employee: Provided, however, that the authorityor agency paying the salaries of such employees shall deduct or cause to bededucted from each employee's salary the employee's contribution in accordancewith applicable provisions of G.S. 135‑8 and remit the same, eitherdirectly or indirectly, to the Retirement System; coverage of employeesdescribed in this sentence shall commence upon the first day of the calendaryear or fiscal year, whichever is earlier, next following the date of executionof an agreement between the Secretary of Defense of the United States and theAdjutant General of the State acting for the Governor in behalf of the State,but no credit shall be allowed pursuant to this sentence for any servicepreviously rendered in the above‑described capacity as a civilianemployee of the National Guard: Provided, further, that the Adjutant General,in his discretion, may terminate the Retirement System coverage of the above‑describedNational Guard employees if a federal retirement system is established for suchemployees and the Adjutant General elects to secure coverage of such employeesunder such federal retirement system. Any full‑time civilian employee ofthe National Guard described above who is now or hereafter may become a memberof the Retirement System may secure Retirement System credit for such serviceas a National Guard civilian employee for the period preceding the time whensuch employees became eligible for Retirement System coverage by paying to theRetirement System an amount equal to that which would have constituted employeecontributions if he had been a member during the years of ineligibility, plusinterest. Employees of State agencies, departments, institutions, boards, andcommissions who are employed in permanent job positions on a recurring basisand who work 30 or more hours per week for nine or more months per calendaryear are covered by the provisions of this subdivision. On and after August 1,2001, a person who is a nonimmigrant alien and who otherwise meets therequirements of this subdivision shall not be excluded from the definition of"employee" solely because the person holds a temporary or time‑limitedvisa.
(11) "Employer"shall mean the State of North Carolina, the county board of education, the cityboard of education, the State Board of Education, the board of trustees of theUniversity of North Carolina, the board of trustees of other institutions andagencies supported and under the control of the State, or any other agency ofand within the State by which a teacher or other employee is paid.
(11a) "Filing"when used in reference to an application for retirement shall mean the receiptof an acceptable application on a form provided by the Retirement System.
(11b) "Law‑EnforcementOfficer" means a full‑time paid employee of an employer who is activelyserving in a position with assigned primary duties and responsibilities forprevention and detection of crime or the general enforcement of the criminallaws of the State of North Carolina or serving civil processes, and whopossesses the power of arrest by virtue of an oath administered under theauthority of the State.
(12) "Medicalboard" shall mean the board of physicians provided for in G.S. 135‑6.
(13) "Member"shall mean any teacher or State employee included in the membership of theSystem as provided in G.S. 135‑3 and 135‑4.
(14) "Membershipservice" shall mean service as a teacher or State employee rendered whilea member of the Retirement System.
(15) "Pensionreserve" shall mean the present value of all payments to be made onaccount of any pension or benefit in lieu of any pension computed upon thebasis of such mortality tables as shall be adopted by the Board of Trustees,and regular interest.
(16) "Pensions"shall mean payments for life derived from money provided by the State of NorthCarolina, and by county or city boards of education. All pensions shall bepayable in equal monthly installments.
(17) "Priorservice" shall mean service rendered prior to the date of establishment ofthe Retirement System for which credit is allowable under G.S. 135‑4;provided, persons now employed by the Board of Transportation shall be entitledto credit for employment in road maintenance by the various counties and roaddistricts prior to 1931.
(18) "Publicschool" shall mean any day school conducted within the State under theauthority and supervision of a duly elected or appointed city or county schoolboard, and any educational institution supported by and under the control ofthe State.
(19) "Regularinterest" shall mean interest compounded annually at such a rate as shallbe determined by the Board of Trustees in accordance with G.S. 135‑7,subsection (b).
(20) (Forapplicability, see Editor's note) "Retirement" means thetermination of employment and the complete separation from active service withno intent or agreement, express or implied, to return to service. A retirementallowance under the provisions of this Chapter may only be granted uponretirement of a member. In order for a member's retirement to become effectivein any month, the member must render no service, including part‑time,temporary, substitute, or contractor service, at any time during the six monthsimmediately following the effective date of retirement. For purposes of thissubdivision, service as a member of a school board or as an unpaid bona fidevolunteer in a local school administrative unit shall not be consideredservice.
(21) "Retirementallowance" shall mean the sum of the "annuity and the pensions,"or any optional benefit payable in lieu thereof.
(22) "RetirementSystem" shall mean the Teachers' and State Employees' Retirement System ofNorth Carolina as defined in G.S. 135‑2.
(23) "Service"shall mean service as a teacher or State employee as described in subdivision(10) or (25) of this section.
(24) "Social securitybreakpoint" shall mean the maximum amount of taxable wages under theFederal Insurance Contributions Act as from time to time in effect.
(25) "Teacher"shall mean any teacher, helping teacher, teacher in a job‑sharingposition under G.S. 115C‑326.5 except for a beneficiary in that position,librarian, principal, supervisor, superintendent of public schools or any full‑timeemployee, city or county, superintendent of public instruction, or any full‑timeemployee of Department of Public Instruction, president, dean or teacher, orany full‑time employee in any educational institution supported by andunder the control of the State: Provided, that the term "teacher"shall not include any part‑time, temporary, or substitute teacher oremployee except for a teacher in a job‑sharing position, and shall notinclude those participating in an optional retirement program provided for inG.S. 135‑5.1 or G.S. 135‑5.4. In all cases of doubt, the Board ofTrustees, hereinbefore defined, shall determine whether any person is a teacheras defined in this Chapter. On and after August 1, 2001, a person who is anonimmigrant alien and who otherwise meets the requirements of this subdivisionshall not be excluded from the definition of "teacher" solely becausethe person holds a temporary or time‑limited visa. Notwithstanding theforegoing, the term "teacher" shall not include any nonimmigrantalien employed in elementary or secondary public schools (whether employed in afull‑time, part‑time, temporary, permanent, or substitute teacherposition) and participating in an exchange visitor program designated by theUnited States Department of State pursuant to 22 C.F.R. Part 62 or by theUnited States Department of Homeland Security pursuant to 8 C.F.R. Part214.2(q).
(26) "Year" asused in this Article shall mean the regular fiscal year beginning July 1 andending June 30 in the following calendar year unless otherwise defined byregulation of the Board of Trustees. (1941, c. 25, s. 1; 1943, c. 431; 1945, c. 924; 1947,c. 458, s. 6; 1953, c. 1053; 1955, c. 818; c. 1155, s. 81/2; 1959, c. 513, s.1; c. 1263, s. 1; 1963, c. 687, s. 1; 1965, c. 750; c. 780, s. 1; 1969, c. 44,s. 74; c. 1223, s. 16; c. 1227; 1971, c. 117, ss. 1‑5; c. 338, s. 1;1973, c. 507, s. 5; c. 640, s. 2; c. 1233; 1975, c. 475, s. 1; 1977, c. 574, s.1; 1979, c. 972, s. 1; 1981, c. 557, ss. 1, 2; 1983, c. 412, ss. 1, 2; 1983(Reg. Sess., 1984), c. 1034, s. 227; 1985, c. 649, s. 3; 1987, c. 738, ss.29(a), 36(a); 1991, c. 51, s. 2; 1993 (Reg. Sess., 1994), c. 769, s. 7.31(c);1998‑1, s. 4(g); 2001‑424, s. 32.24(b); 2001‑426, ss. 2, 3;2001‑513, s. 24; 2002‑110, s. 1; 2002‑126, ss. 28.6(b),28.12(a); 2002‑174, s. 2; 2003‑359, ss. 1, 2; 2004‑81, s. 1;2004‑199, s. 34(a); 2005‑276, s. 29.28(e); 2006‑66, s. 22.21;2007‑143, s. 1; 2009‑11, s. 1; 2009‑66, s. 6(e), (i); 2009‑281,s. 1; 2009‑451, s. 26.22.)
Retirement System for Teachersand State Employees; Social Security; Health Insurance Program for Children.
Article 1.
Retirement System forTeachers and State Employees.
§ 135‑1. Definitions.
The following words andphrases as used in this Chapter, unless a different meaning is plainly requiredby the context, shall have the following meanings:
(1) "Accumulatedcontributions" shall mean the sum of all the amounts deducted from thecompensation of a member and accredited to his individual account in theannuity savings fund, together with regular interest thereon as provided inG.S. 135‑8.
(2) "Actuarialequivalent" shall mean a benefit of equal value when computed upon thebasis of such mortality tables as shall be adopted by the Board of Trustees,and regular interest.
(3) "Annuity"shall mean payments for life derived from that "accumulatedcontribution" of a member. All annuities shall be payable in equal monthlyinstallments.
(4) "Annuityreserve" shall mean the present value of all payments to be made onaccount of any annuity or benefit in lieu of any annuity, computed upon thebasis of such mortality tables as shall be adopted by the Board of Trustees,and regular interest.
(5) "Average finalcompensation" shall mean the average annual compensation of a memberduring the four consecutive calendar years of membership service producing thehighest such average; but shall not include any compensation, as determined bythe Board of Trustees, for the reimbursement of expenses or payments for housingor any other allowances whether or not classified as salary and wages. In theevent a member is or has been in receipt of a benefit under the provisions ofG.S. 135‑105 or G.S. 135‑106, the compensation used in thecalculation of "average final compensation" shall be the higher ofcompensation of the member under the provisions of this Article or compensationused in calculating the payment of benefits under Article 6 of this Chapter asadjusted for percentage increases in the post disability benefit.
(6) "Beneficiary"shall mean any person in receipt of a pension, an annuity, a retirementallowance or other benefit as provided by this Chapter.
(7) "Board ofTrustees" shall mean the Board provided for in G.S. 135‑6 toadminister the Retirement System.
(7a) a. "Compensation"shall mean all salaries and wages prior to any reduction pursuant to sections125, 401(k), 403(b), 414(h)(2), and 457 of the Internal Revenue Code, notincluding any terminal payments for unused sick leave, derived from public fundswhich are earned by a member of the Retirement System for service as anemployee or teacher in the unit of the Retirement System for which he isperforming full‑time work. In addition to the foregoing,"compensation" shall include:
1. Performance‑basedcompensation (regardless of whether paid in a lump sum, in periodicinstallments, or on a monthly basis);
2. Conversion ofadditional benefits to salary (additional benefits such as health, life, ordisability plans), so long as the benefits are other than mandated by State lawor regulation;
3. Payment of taxconsequences for benefits provided by the employer, so long as they constitutean adjustment or increase in salary and not a "reimbursement ofexpenses";
4. Payout of vacationleave so long as such payouts are permitted by applicable law and regulation;
5. Employeecontributions to eligible deferred compensation plans; and
6. Effective July 1,2009, payment of military differential wages.
b. "Compensation"shall not include any payment, as determined by the Board of Trustees, for thereimbursement of expenses or payments for housing or any other allowanceswhether or not classified as salary and wages. "Compensation"includes all special pay contribution of annual leave made to a 401(a) SpecialPay Plan for the benefit of an employee. Notwithstanding any other provision ofthis Chapter, "compensation" shall not include:
1. Supplement/allowanceprovided to employee to purchase additional benefits such as health, life, ordisability plans;
3. Employercontributions to eligible deferred compensation plans;
4. Employer‑providedfringe benefits (additional benefits such as health, life, or disabilityplans);
5. Reimbursement ofuninsured medical expenses;
6. Reimbursement ofbusiness expenses;
7. Reimbursement ofmoving expenses;
8. Reimbursement/paymentof personal expenses;
9. Incentive paymentsfor early retirement;
10. Bonuses paid incidentto retirement;
11. Contractbuyout/severance payments; and
12. Payouts for unusedsick leave.
c. In the event anemployer reports as "compensation" payments not specifically includedor excluded as "compensation", such payments shall be"compensation" for retirement purposes only if the employer pays theRetirement System the additional actuarial liability created by such payments.
(8) "Creditableservice" shall mean the total of "prior service" plus"membership service" plus service, both noncontributory andpurchased, for which credit is allowable as provided in G.S. 135‑4. In noevent, however, shall "creditable service" be deemed "membershipservice" for the purpose of determining eligibility for benefits accruingunder this Chapter.
(9) "Earnablecompensation" shall mean the full rate of the compensation that would bepayable to a teacher or employee if he worked in full normal working time. Incases where compensation includes maintenance, the Board of Trustees shall fixthe value of that part of the compensation not paid in money.
(10) "Employee"shall mean all full‑time employees, agents or officers of the State ofNorth Carolina or any of its departments, bureaus and institutions other thaneducational, whether such employees are elected, appointed or employed:Provided that the term "employee" shall not include any person who isa member of the Consolidated Judicial Retirement System, any member of theGeneral Assembly or any part‑time or temporary employee. Notwithstandingany other provision of law, "employee" shall include all employees ofthe General Assembly except participants in the Legislative Intern Program,pages, and beneficiaries in receipt of a monthly retirement allowance underthis Chapter who are reemployed on a temporary basis. "Employee" alsoincludes any participant whose employment is interrupted by reason of servicein the Uniformed Services, as that term is defined in section 4303(16) of theUniformed Services Employment and Reemployment Rights Act, Public Law 103‑353,if that participant was an employee at the time of the interruption; if theparticipant does not return immediately after that service to employment with acovered employer in this System, then the participant shall be deemed "inservice" until the date on which the participant was first eligible to beseparated or released from his or her involuntary military service. In allcases of doubt, the Board of Trustees shall determine whether any person is anemployee as defined in this Chapter. "Employee" shall also mean everyfull‑time civilian employee of the Army National Guard and Air NationalGuard of this State who is employed pursuant to section 709 of Title 32 of theUnited States Code and paid from federal appropriated funds, but held by thefederal authorities not to be a federal employee: Provided, however, that the authorityor agency paying the salaries of such employees shall deduct or cause to bededucted from each employee's salary the employee's contribution in accordancewith applicable provisions of G.S. 135‑8 and remit the same, eitherdirectly or indirectly, to the Retirement System; coverage of employeesdescribed in this sentence shall commence upon the first day of the calendaryear or fiscal year, whichever is earlier, next following the date of executionof an agreement between the Secretary of Defense of the United States and theAdjutant General of the State acting for the Governor in behalf of the State,but no credit shall be allowed pursuant to this sentence for any servicepreviously rendered in the above‑described capacity as a civilianemployee of the National Guard: Provided, further, that the Adjutant General,in his discretion, may terminate the Retirement System coverage of the above‑describedNational Guard employees if a federal retirement system is established for suchemployees and the Adjutant General elects to secure coverage of such employeesunder such federal retirement system. Any full‑time civilian employee ofthe National Guard described above who is now or hereafter may become a memberof the Retirement System may secure Retirement System credit for such serviceas a National Guard civilian employee for the period preceding the time whensuch employees became eligible for Retirement System coverage by paying to theRetirement System an amount equal to that which would have constituted employeecontributions if he had been a member during the years of ineligibility, plusinterest. Employees of State agencies, departments, institutions, boards, andcommissions who are employed in permanent job positions on a recurring basisand who work 30 or more hours per week for nine or more months per calendaryear are covered by the provisions of this subdivision. On and after August 1,2001, a person who is a nonimmigrant alien and who otherwise meets therequirements of this subdivision shall not be excluded from the definition of"employee" solely because the person holds a temporary or time‑limitedvisa.
(11) "Employer"shall mean the State of North Carolina, the county board of education, the cityboard of education, the State Board of Education, the board of trustees of theUniversity of North Carolina, the board of trustees of other institutions andagencies supported and under the control of the State, or any other agency ofand within the State by which a teacher or other employee is paid.
(11a) "Filing"when used in reference to an application for retirement shall mean the receiptof an acceptable application on a form provided by the Retirement System.
(11b) "Law‑EnforcementOfficer" means a full‑time paid employee of an employer who is activelyserving in a position with assigned primary duties and responsibilities forprevention and detection of crime or the general enforcement of the criminallaws of the State of North Carolina or serving civil processes, and whopossesses the power of arrest by virtue of an oath administered under theauthority of the State.
(12) "Medicalboard" shall mean the board of physicians provided for in G.S. 135‑6.
(13) "Member"shall mean any teacher or State employee included in the membership of theSystem as provided in G.S. 135‑3 and 135‑4.
(14) "Membershipservice" shall mean service as a teacher or State employee rendered whilea member of the Retirement System.
(15) "Pensionreserve" shall mean the present value of all payments to be made onaccount of any pension or benefit in lieu of any pension computed upon thebasis of such mortality tables as shall be adopted by the Board of Trustees,and regular interest.
(16) "Pensions"shall mean payments for life derived from money provided by the State of NorthCarolina, and by county or city boards of education. All pensions shall bepayable in equal monthly installments.
(17) "Priorservice" shall mean service rendered prior to the date of establishment ofthe Retirement System for which credit is allowable under G.S. 135‑4;provided, persons now employed by the Board of Transportation shall be entitledto credit for employment in road maintenance by the various counties and roaddistricts prior to 1931.
(18) "Publicschool" shall mean any day school conducted within the State under theauthority and supervision of a duly elected or appointed city or county schoolboard, and any educational institution supported by and under the control ofthe State.
(19) "Regularinterest" shall mean interest compounded annually at such a rate as shallbe determined by the Board of Trustees in accordance with G.S. 135‑7,subsection (b).
(20) (Forapplicability, see Editor's note) "Retirement" means thetermination of employment and the complete separation from active service withno intent or agreement, express or implied, to return to service. A retirementallowance under the provisions of this Chapter may only be granted uponretirement of a member. In order for a member's retirement to become effectivein any month, the member must render no service, including part‑time,temporary, substitute, or contractor service, at any time during the six monthsimmediately following the effective date of retirement. For purposes of thissubdivision, service as a member of a school board or as an unpaid bona fidevolunteer in a local school administrative unit shall not be consideredservice.
(21) "Retirementallowance" shall mean the sum of the "annuity and the pensions,"or any optional benefit payable in lieu thereof.
(22) "RetirementSystem" shall mean the Teachers' and State Employees' Retirement System ofNorth Carolina as defined in G.S. 135‑2.
(23) "Service"shall mean service as a teacher or State employee as described in subdivision(10) or (25) of this section.
(24) "Social securitybreakpoint" shall mean the maximum amount of taxable wages under theFederal Insurance Contributions Act as from time to time in effect.
(25) "Teacher"shall mean any teacher, helping teacher, teacher in a job‑sharingposition under G.S. 115C‑326.5 except for a beneficiary in that position,librarian, principal, supervisor, superintendent of public schools or any full‑timeemployee, city or county, superintendent of public instruction, or any full‑timeemployee of Department of Public Instruction, president, dean or teacher, orany full‑time employee in any educational institution supported by andunder the control of the State: Provided, that the term "teacher"shall not include any part‑time, temporary, or substitute teacher oremployee except for a teacher in a job‑sharing position, and shall notinclude those participating in an optional retirement program provided for inG.S. 135‑5.1 or G.S. 135‑5.4. In all cases of doubt, the Board ofTrustees, hereinbefore defined, shall determine whether any person is a teacheras defined in this Chapter. On and after August 1, 2001, a person who is anonimmigrant alien and who otherwise meets the requirements of this subdivisionshall not be excluded from the definition of "teacher" solely becausethe person holds a temporary or time‑limited visa. Notwithstanding theforegoing, the term "teacher" shall not include any nonimmigrantalien employed in elementary or secondary public schools (whether employed in afull‑time, part‑time, temporary, permanent, or substitute teacherposition) and participating in an exchange visitor program designated by theUnited States Department of State pursuant to 22 C.F.R. Part 62 or by theUnited States Department of Homeland Security pursuant to 8 C.F.R. Part214.2(q).
(26) "Year" asused in this Article shall mean the regular fiscal year beginning July 1 andending June 30 in the following calendar year unless otherwise defined byregulation of the Board of Trustees. (1941, c. 25, s. 1; 1943, c. 431; 1945, c. 924; 1947,c. 458, s. 6; 1953, c. 1053; 1955, c. 818; c. 1155, s. 81/2; 1959, c. 513, s.1; c. 1263, s. 1; 1963, c. 687, s. 1; 1965, c. 750; c. 780, s. 1; 1969, c. 44,s. 74; c. 1223, s. 16; c. 1227; 1971, c. 117, ss. 1‑5; c. 338, s. 1;1973, c. 507, s. 5; c. 640, s. 2; c. 1233; 1975, c. 475, s. 1; 1977, c. 574, s.1; 1979, c. 972, s. 1; 1981, c. 557, ss. 1, 2; 1983, c. 412, ss. 1, 2; 1983(Reg. Sess., 1984), c. 1034, s. 227; 1985, c. 649, s. 3; 1987, c. 738, ss.29(a), 36(a); 1991, c. 51, s. 2; 1993 (Reg. Sess., 1994), c. 769, s. 7.31(c);1998‑1, s. 4(g); 2001‑424, s. 32.24(b); 2001‑426, ss. 2, 3;2001‑513, s. 24; 2002‑110, s. 1; 2002‑126, ss. 28.6(b),28.12(a); 2002‑174, s. 2; 2003‑359, ss. 1, 2; 2004‑81, s. 1;2004‑199, s. 34(a); 2005‑276, s. 29.28(e); 2006‑66, s. 22.21;2007‑143, s. 1; 2009‑11, s. 1; 2009‑66, s. 6(e), (i); 2009‑281,s. 1; 2009‑451, s. 26.22.)
Retirement System for Teachersand State Employees; Social Security; Health Insurance Program for Children.
Article 1.
Retirement System forTeachers and State Employees.
§ 135‑1. Definitions.
The following words andphrases as used in this Chapter, unless a different meaning is plainly requiredby the context, shall have the following meanings:
(1) "Accumulatedcontributions" shall mean the sum of all the amounts deducted from thecompensation of a member and accredited to his individual account in theannuity savings fund, together with regular interest thereon as provided inG.S. 135‑8.
(2) "Actuarialequivalent" shall mean a benefit of equal value when computed upon thebasis of such mortality tables as shall be adopted by the Board of Trustees,and regular interest.
(3) "Annuity"shall mean payments for life derived from that "accumulatedcontribution" of a member. All annuities shall be payable in equal monthlyinstallments.
(4) "Annuityreserve" shall mean the present value of all payments to be made onaccount of any annuity or benefit in lieu of any annuity, computed upon thebasis of such mortality tables as shall be adopted by the Board of Trustees,and regular interest.
(5) "Average finalcompensation" shall mean the average annual compensation of a memberduring the four consecutive calendar years of membership service producing thehighest such average; but shall not include any compensation, as determined bythe Board of Trustees, for the reimbursement of expenses or payments for housingor any other allowances whether or not classified as salary and wages. In theevent a member is or has been in receipt of a benefit under the provisions ofG.S. 135‑105 or G.S. 135‑106, the compensation used in thecalculation of "average final compensation" shall be the higher ofcompensation of the member under the provisions of this Article or compensationused in calculating the payment of benefits under Article 6 of this Chapter asadjusted for percentage increases in the post disability benefit.
(6) "Beneficiary"shall mean any person in receipt of a pension, an annuity, a retirementallowance or other benefit as provided by this Chapter.
(7) "Board ofTrustees" shall mean the Board provided for in G.S. 135‑6 toadminister the Retirement System.
(7a) a. "Compensation"shall mean all salaries and wages prior to any reduction pursuant to sections125, 401(k), 403(b), 414(h)(2), and 457 of the Internal Revenue Code, notincluding any terminal payments for unused sick leave, derived from public fundswhich are earned by a member of the Retirement System for service as anemployee or teacher in the unit of the Retirement System for which he isperforming full‑time work. In addition to the foregoing,"compensation" shall include:
1. Performance‑basedcompensation (regardless of whether paid in a lump sum, in periodicinstallments, or on a monthly basis);
2. Conversion ofadditional benefits to salary (additional benefits such as health, life, ordisability plans), so long as the benefits are other than mandated by State lawor regulation;
3. Payment of taxconsequences for benefits provided by the employer, so long as they constitutean adjustment or increase in salary and not a "reimbursement ofexpenses";
4. Payout of vacationleave so long as such payouts are permitted by applicable law and regulation;
5. Employeecontributions to eligible deferred compensation plans; and
6. Effective July 1,2009, payment of military differential wages.
b. "Compensation"shall not include any payment, as determined by the Board of Trustees, for thereimbursement of expenses or payments for housing or any other allowanceswhether or not classified as salary and wages. "Compensation"includes all special pay contribution of annual leave made to a 401(a) SpecialPay Plan for the benefit of an employee. Notwithstanding any other provision ofthis Chapter, "compensation" shall not include:
1. Supplement/allowanceprovided to employee to purchase additional benefits such as health, life, ordisability plans;
3. Employercontributions to eligible deferred compensation plans;
4. Employer‑providedfringe benefits (additional benefits such as health, life, or disabilityplans);
5. Reimbursement ofuninsured medical expenses;
6. Reimbursement ofbusiness expenses;
7. Reimbursement ofmoving expenses;
8. Reimbursement/paymentof personal expenses;
9. Incentive paymentsfor early retirement;
10. Bonuses paid incidentto retirement;
11. Contractbuyout/severance payments; and
12. Payouts for unusedsick leave.
c. In the event anemployer reports as "compensation" payments not specifically includedor excluded as "compensation", such payments shall be"compensation" for retirement purposes only if the employer pays theRetirement System the additional actuarial liability created by such payments.
(8) "Creditableservice" shall mean the total of "prior service" plus"membership service" plus service, both noncontributory andpurchased, for which credit is allowable as provided in G.S. 135‑4. In noevent, however, shall "creditable service" be deemed "membershipservice" for the purpose of determining eligibility for benefits accruingunder this Chapter.
(9) "Earnablecompensation" shall mean the full rate of the compensation that would bepayable to a teacher or employee if he worked in full normal working time. Incases where compensation includes maintenance, the Board of Trustees shall fixthe value of that part of the compensation not paid in money.
(10) "Employee"shall mean all full‑time employees, agents or officers of the State ofNorth Carolina or any of its departments, bureaus and institutions other thaneducational, whether such employees are elected, appointed or employed:Provided that the term "employee" shall not include any person who isa member of the Consolidated Judicial Retirement System, any member of theGeneral Assembly or any part‑time or temporary employee. Notwithstandingany other provision of law, "employee" shall include all employees ofthe General Assembly except participants in the Legislative Intern Program,pages, and beneficiaries in receipt of a monthly retirement allowance underthis Chapter who are reemployed on a temporary basis. "Employee" alsoincludes any participant whose employment is interrupted by reason of servicein the Uniformed Services, as that term is defined in section 4303(16) of theUniformed Services Employment and Reemployment Rights Act, Public Law 103‑353,if that participant was an employee at the time of the interruption; if theparticipant does not return immediately after that service to employment with acovered employer in this System, then the participant shall be deemed "inservice" until the date on which the participant was first eligible to beseparated or released from his or her involuntary military service. In allcases of doubt, the Board of Trustees shall determine whether any person is anemployee as defined in this Chapter. "Employee" shall also mean everyfull‑time civilian employee of the Army National Guard and Air NationalGuard of this State who is employed pursuant to section 709 of Title 32 of theUnited States Code and paid from federal appropriated funds, but held by thefederal authorities not to be a federal employee: Provided, however, that the authorityor agency paying the salaries of such employees shall deduct or cause to bededucted from each employee's salary the employee's contribution in accordancewith applicable provisions of G.S. 135‑8 and remit the same, eitherdirectly or indirectly, to the Retirement System; coverage of employeesdescribed in this sentence shall commence upon the first day of the calendaryear or fiscal year, whichever is earlier, next following the date of executionof an agreement between the Secretary of Defense of the United States and theAdjutant General of the State acting for the Governor in behalf of the State,but no credit shall be allowed pursuant to this sentence for any servicepreviously rendered in the above‑described capacity as a civilianemployee of the National Guard: Provided, further, that the Adjutant General,in his discretion, may terminate the Retirement System coverage of the above‑describedNational Guard employees if a federal retirement system is established for suchemployees and the Adjutant General elects to secure coverage of such employeesunder such federal retirement system. Any full‑time civilian employee ofthe National Guard described above who is now or hereafter may become a memberof the Retirement System may secure Retirement System credit for such serviceas a National Guard civilian employee for the period preceding the time whensuch employees became eligible for Retirement System coverage by paying to theRetirement System an amount equal to that which would have constituted employeecontributions if he had been a member during the years of ineligibility, plusinterest. Employees of State agencies, departments, institutions, boards, andcommissions who are employed in permanent job positions on a recurring basisand who work 30 or more hours per week for nine or more months per calendaryear are covered by the provisions of this subdivision. On and after August 1,2001, a person who is a nonimmigrant alien and who otherwise meets therequirements of this subdivision shall not be excluded from the definition of"employee" solely because the person holds a temporary or time‑limitedvisa.
(11) "Employer"shall mean the State of North Carolina, the county board of education, the cityboard of education, the State Board of Education, the board of trustees of theUniversity of North Carolina, the board of trustees of other institutions andagencies supported and under the control of the State, or any other agency ofand within the State by which a teacher or other employee is paid.
(11a) "Filing"when used in reference to an application for retirement shall mean the receiptof an acceptable application on a form provided by the Retirement System.
(11b) "Law‑EnforcementOfficer" means a full‑time paid employee of an employer who is activelyserving in a position with assigned primary duties and responsibilities forprevention and detection of crime or the general enforcement of the criminallaws of the State of North Carolina or serving civil processes, and whopossesses the power of arrest by virtue of an oath administered under theauthority of the State.
(12) "Medicalboard" shall mean the board of physicians provided for in G.S. 135‑6.
(13) "Member"shall mean any teacher or State employee included in the membership of theSystem as provided in G.S. 135‑3 and 135‑4.
(14) "Membershipservice" shall mean service as a teacher or State employee rendered whilea member of the Retirement System.
(15) "Pensionreserve" shall mean the present value of all payments to be made onaccount of any pension or benefit in lieu of any pension computed upon thebasis of such mortality tables as shall be adopted by the Board of Trustees,and regular interest.
(16) "Pensions"shall mean payments for life derived from money provided by the State of NorthCarolina, and by county or city boards of education. All pensions shall bepayable in equal monthly installments.
(17) "Priorservice" shall mean service rendered prior to the date of establishment ofthe Retirement System for which credit is allowable under G.S. 135‑4;provided, persons now employed by the Board of Transportation shall be entitledto credit for employment in road maintenance by the various counties and roaddistricts prior to 1931.
(18) "Publicschool" shall mean any day school conducted within the State under theauthority and supervision of a duly elected or appointed city or county schoolboard, and any educational institution supported by and under the control ofthe State.
(19) "Regularinterest" shall mean interest compounded annually at such a rate as shallbe determined by the Board of Trustees in accordance with G.S. 135‑7,subsection (b).
(20) (Forapplicability, see Editor's note) "Retirement" means thetermination of employment and the complete separation from active service withno intent or agreement, express or implied, to return to service. A retirementallowance under the provisions of this Chapter may only be granted uponretirement of a member. In order for a member's retirement to become effectivein any month, the member must render no service, including part‑time,temporary, substitute, or contractor service, at any time during the six monthsimmediately following the effective date of retirement. For purposes of thissubdivision, service as a member of a school board or as an unpaid bona fidevolunteer in a local school administrative unit shall not be consideredservice.
(21) "Retirementallowance" shall mean the sum of the "annuity and the pensions,"or any optional benefit payable in lieu thereof.
(22) "RetirementSystem" shall mean the Teachers' and State Employees' Retirement System ofNorth Carolina as defined in G.S. 135‑2.
(23) "Service"shall mean service as a teacher or State employee as described in subdivision(10) or (25) of this section.
(24) "Social securitybreakpoint" shall mean the maximum amount of taxable wages under theFederal Insurance Contributions Act as from time to time in effect.
(25) "Teacher"shall mean any teacher, helping teacher, teacher in a job‑sharingposition under G.S. 115C‑326.5 except for a beneficiary in that position,librarian, principal, supervisor, superintendent of public schools or any full‑timeemployee, city or county, superintendent of public instruction, or any full‑timeemployee of Department of Public Instruction, president, dean or teacher, orany full‑time employee in any educational institution supported by andunder the control of the State: Provided, that the term "teacher"shall not include any part‑time, temporary, or substitute teacher oremployee except for a teacher in a job‑sharing position, and shall notinclude those participating in an optional retirement program provided for inG.S. 135‑5.1 or G.S. 135‑5.4. In all cases of doubt, the Board ofTrustees, hereinbefore defined, shall determine whether any person is a teacheras defined in this Chapter. On and after August 1, 2001, a person who is anonimmigrant alien and who otherwise meets the requirements of this subdivisionshall not be excluded from the definition of "teacher" solely becausethe person holds a temporary or time‑limited visa. Notwithstanding theforegoing, the term "teacher" shall not include any nonimmigrantalien employed in elementary or secondary public schools (whether employed in afull‑time, part‑time, temporary, permanent, or substitute teacherposition) and participating in an exchange visitor program designated by theUnited States Department of State pursuant to 22 C.F.R. Part 62 or by theUnited States Department of Homeland Security pursuant to 8 C.F.R. Part214.2(q).
(26) "Year" asused in this Article shall mean the regular fiscal year beginning July 1 andending June 30 in the following calendar year unless otherwise defined byregulation of the Board of Trustees. (1941, c. 25, s. 1; 1943, c. 431; 1945, c. 924; 1947,c. 458, s. 6; 1953, c. 1053; 1955, c. 818; c. 1155, s. 81/2; 1959, c. 513, s.1; c. 1263, s. 1; 1963, c. 687, s. 1; 1965, c. 750; c. 780, s. 1; 1969, c. 44,s. 74; c. 1223, s. 16; c. 1227; 1971, c. 117, ss. 1‑5; c. 338, s. 1;1973, c. 507, s. 5; c. 640, s. 2; c. 1233; 1975, c. 475, s. 1; 1977, c. 574, s.1; 1979, c. 972, s. 1; 1981, c. 557, ss. 1, 2; 1983, c. 412, ss. 1, 2; 1983(Reg. Sess., 1984), c. 1034, s. 227; 1985, c. 649, s. 3; 1987, c. 738, ss.29(a), 36(a); 1991, c. 51, s. 2; 1993 (Reg. Sess., 1994), c. 769, s. 7.31(c);1998‑1, s. 4(g); 2001‑424, s. 32.24(b); 2001‑426, ss. 2, 3;2001‑513, s. 24; 2002‑110, s. 1; 2002‑126, ss. 28.6(b),28.12(a); 2002‑174, s. 2; 2003‑359, ss. 1, 2; 2004‑81, s. 1;2004‑199, s. 34(a); 2005‑276, s. 29.28(e); 2006‑66, s. 22.21;2007‑143, s. 1; 2009‑11, s. 1; 2009‑66, s. 6(e), (i); 2009‑281,s. 1; 2009‑451, s. 26.22.)
