State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_135 > GS_135-4

§ 135‑4.  Creditableservice.

(a)        Under such rulesand regulations as the Board of Trustees shall adopt, each member who was ateacher or State employee at any time during the five years immediatelypreceding the establishment of the System and who became a member prior to July1, 1946, shall file a detailed statement of all North Carolina service as ateacher or State employee rendered by him prior to the date of establishmentfor which he claims credit; provided, that, notwithstanding the foregoing, anymember retiring on or after July 1, 1965, with credit for not less than 10years of membership service shall file such detailed statement of service as ateacher or State employee rendered by him prior to July 1, 1941, for which heclaims credit; provided, that any member who retired on a service retirementallowance prior to July 1, 1965, who at the time of his retirement did notqualify for credit for his service as a teacher or State employee prior to July1, 1941, may request on and after July 1, 1971, that his original benefit berecalculated, in accordance with the formula prevailing at the time of hisretirement, to include credit for such service with the new benefit to becomeeffective on the first of the month following certification of the prior service.

(b)        The Board ofTrustees shall fix and determine by appropriate rules and regulations how muchservice in any year is equivalent to one year of service, but in no case shallmore than one year of service be creditable for all services in one year. Servicerendered for the regular school year in any district shall be equivalent to oneyear's service. Service rendered by a school employee in a job‑sharingposition shall be credited at the rate of one‑half year for each regularschool year of employment.

(c)        Subject to theabove restrictions and to such other rules and regulations as the Board ofTrustees may adopt, the Board of Trustees shall verify, as soon as practicableafter the filing of such statements of service, the service therein claimed.

In lieu of a determination ofthe actual compensation of the members that was received during such period ofprior service the Board of Trustees may use for the purpose of this Chapter thecompensation rates which will be determined by the average salary of themembers for five years immediately preceding the date this System becameoperative as the records show the member actually received. Creditable servicefor unused sick leave shall be allowed only for sick leave accrued monthlyduring employment under a duly adopted sick leave policy and for which themember may be able to take credits and be paid for sick leave withoutrestriction.

(d)        Any member may, upto his date of retirement and within one year thereafter, request the Board ofTrustees to modify or correct his prior service credit.

(e)        Creditable serviceat retirement on which the retirement allowance of a member shall be basedshall consist of the membership service rendered by him since he last became amember, and also if he has a prior service certificate which is in full forceand effect, the amount of service certified on his prior service certificate;and if he has sick leave standing to his credit upon retirement on or afterJuly 1, 1971, one month of credit for each 20 days or portion thereof, but notless than one hour; sick leave shall not be counted in computing creditableservice for the purpose of determining eligibility for disability retirement orfor a vested deferred allowance.

On and after July 1, 1971, amember whose account was closed on account of absence from service under theprovisions of G.S. 135‑3(3) and who subsequently returns to service for aperiod of five years, may thereafter repay in a lump sum the amount withdrawnplus regular interest thereon from the date of withdrawal through the year ofrepayment and thereby increase his creditable service by the amount ofcreditable service lost when his account was closed.

On and after July 1, 1973, amember whose account in the North Carolina Local Governmental Employees'Retirement System was closed on account of absence from service under theprovisions of G.S. 128‑24(1a) and who subsequently became or becomes amember of this System with credit for five years of service, may thereafterrepay in a lump sum the amount withdrawn from the North Carolina LocalGovernmental Employees' Retirement System plus regular interest thereon fromthe date of withdrawal through the year of repayment and thereby increase hiscreditable service in this System by the amount of creditable service lost whenhis account was closed.

On or after July 1, 1979, amember who has obtained 60 months of aggregate service, or five years ofmembership service, as an employee of the North Carolina General Assembly,except legislators, participants in the Legislative Intern Program and pages,may make a lump sum payment together with interest, and an administrative feefor such service, to the Teachers' and State Employees' Retirement System of anamount equal to what he would have contributed had he been a member on hisfirst day of employment.

On and after January 1, 1985,the creditable service of a member who was a member of the Law‑EnforcementOfficers' Retirement System at the time of the transfer of law‑enforcementofficers employed by the State from that System to this Retirement System andwhose accumulated contributions are transferred from that System to thisRetirement System, shall include service that was creditable in the Law‑EnforcementOfficers' Retirement System; and membership service with that System shall bemembership service with this Retirement System; provided, notwithstanding anyprovision of this Article to the contrary, any inchoate or accrued rights ofsuch a member to purchase creditable service for military service, withdrawnservice and prior service under the rules and regulations of the Law‑EnforcementOfficers' Retirement System shall not be diminished and may be purchased ascreditable service with this Retirement System under the same conditions whichwould have otherwise applied.

(f)         Armed ServiceCredit. –

(1)        Teachers and otherState employees who entered the armed services of the United States on or afterSeptember 16, 1940, and prior to February 17, 1941, and who returned to theservice of the State within a period of two years after they were firsteligible to be separated or released from such armed services under other thandishonorable conditions shall be entitled to full credit for all prior service.

(2)        Teachers and otherState employees who entered the armed services of the United States on or afterSeptember 16, 1940, and who returned to the service of the State prior toOctober 1, 1952, or who devote not less than 10 years of service to the Stateafter they are separated or released from such armed services under other thandishonorable conditions, shall be entitled to full credit for all priorservice, and, in addition they shall receive membership service credit for theperiod of service in such armed services up to the date they were firsteligible to be separated or released therefrom, occurring after the date ofestablishment of the Retirement System.

(3)        Teachers and otherState employees who enter the armed services of the United States on or afterJuly 1, 1950, or who engage in active military service on or after July 1,1950, and who return to the service of the State within a period of two yearsafter they are first eligible to be separated or released from such activemilitary service under other than dishonorable conditions shall be entitled tofull membership service credit for the period of such active service in thearmed services.

(4)        Under such rules asthe Board of Trustees shall adopt, credit will be provided by the RetirementSystem with respect to each such teacher or other State employee in the amountsthat he would have been paid during such service in such armed services on thebasis of his earnable compensation when such service commenced. Suchcontributions shall be credited to the individual account of the member in theannuity savings fund, in such manner as the Board of Trustees shall determine,but any such contributions so credited and any regular interest thereon shallbe available to the member only in the form of an annuity, or benefit in lieuthereof, upon his retirement on a service, disability or special retirementallowance; and in the event of cessation of membership or death prior thereto,any such contributions so credited and regular interest thereon shall not bepayable to him or on his account, but shall be transferred from the annuitysavings fund to the pension accumulation fund. If any payments were made by amember on account of such service as provided by subdivision (5) of subsection(b) of G.S. 135‑8, the Board of Trustees shall refund to or reimbursesuch member for such payments.

(5)        The provisions ofthis subsection shall also apply to members of the National Guard with respectto teachers and State employees who are called into federal service or who arecalled into State service, to the extent that such persons fail to receivecompensation for performance of the duties of their employment other than forservice in the National Guard.

(6)        Repealed by SessionLaws 1981, c. 636, s. 1. For proviso as to inchoate or accrued rights, seeEditor's Note below.

(7)        Notwithstanding anyother provision of this Chapter, any member and any retired member as hereindescribed may purchase creditable service in the Armed Forces of the UnitedStates, not otherwise allowed, by paying a total lump sum payment determined asfollows:

a.         For members whocompleted 10 years of membership service, and retired members who completed 10years of membership service prior to retirement, whose membership began on orprior to July 1, 1981, and who make this purchase within three years afterfirst becoming eligible, the cost shall be an amount equal to the monthlycompensation the member earned when he first entered membership service timesthe employee contribution rate at that time times the months of service to bepurchased, with sufficient interest added thereto so as to equal one‑halfof the cost of allowing this service, plus an administrative fee to be set bythe Board of Trustees.

b.         For members whocomplete five years of membership service, and retired members who completefive years of membership service prior to retirement, and eligible members andretired members covered by paragraph a. of this subdivision, whose membershipbegan on or before July 1, 1981, but who did not or do not make this purchasewithin three years after first becoming eligible, the cost shall be an amountequal to the full liability of the service credits calculated on the basis ofthe assumptions used for the purposes of the actuarial valuation of theSystem's liabilities and shall take into account the retirement allowance arisingon account of the additional service credits commencing at the earliest age atwhich the member could retire on an unreduced allowance, as determined by theBoard of Trustees upon the advice of the consulting actuary, plus anadministrative fee to be set by the Board of Trustees. Notwithstanding theforegoing provisions of this subsection that provide for the purchase ofservice credits, the term "full liability" includes assumed post‑retirementallowance increases, as determined by the Board of Trustees, from the earliestage at which a member could retire on an unreduced service retirementallowance.

Creditableservice allowed under this subdivision shall be only for the initial period of"active duty", as defined in 38 U.S. Code Section 101(21), in the ArmedForces of the United States up to the date the member was first eligible to beseparated and released and for subsequent periods of "active duty",as defined in 38 U.S. Code Section 101(21), as required by the Armed Forces ofthe United States up to the date of first eligibility for separation orrelease, but shall not include periods of active duty in the Armed Forces ofthe United States creditable in any other retirement system except the NationalGuard or any reserve component of the Armed Forces of the United States, andshall not include periods of "active duty for training", as definedin 38 U.S. Code Section 101(22), or periods of "inactive dutytraining", as defined in 38 U.S. Code Section 101(23), rendered in anyreserve component of the Armed Forces of the United States. Provided,creditable service may be allowed only for active duty in the Armed Forces ofthe United States of a member that resulted in a general or honorable dischargefrom duty. The member shall submit satisfactory evidence of the serviceclaimed. For purposes of this subsection, membership service may include anymembership or prior service credits transferred to this Retirement Systempursuant to G.S. 135‑18.1.

(g)        Teachers and otherState employees who served in the uniformed services as defined in theUniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. §4303, and who, after being honorably discharged, returned to the service of theState within a period of two years from date of discharge shall be creditedwith prior service for such period of service in the uniformed services for themaximum period that they are entitled to reemployment under the UniformedServices Employment and Reemployment Rights Act of 1994, 38 U.S.C. § 4301, etseq., or other federal law, and the salary or compensation of such a teacher orState employee during that period of service is deemed to be that salary orcompensation the employee would have received but for the period of service hadthe employee remained continuously employed, if the determination of thatsalary or compensation is reasonably certain. If the determination of thesalary or compensation is not reasonably certain, then it is deemed to be thatemployee's average rate of compensation during the 12‑month periodimmediately preceding the period of service.

(h)        During periods whena member is on leave of absence and is receiving less than his fullcompensation, he will be deemed to be in service only if he is contributing tothe Retirement System as provided in G.S. 135‑8(b)(5). If he is socontributing, the annual rate of compensation paid to such employee immediatelybefore the leave of absence began will be deemed to be the actual compensationrate of the employee during the leave of absence.

(i)         Any person whobecame a member after June 30, 1947, and before July 1, 1955, and did notsubsequently withdraw his contributions may, prior to his retirement, increasehis creditable service to the extent of the period of time from the date hebecame a "teacher or employee" as the terms are defined in thisChapter to the date he became a member, but not exceeding three monthsimmediately preceding membership, provided that he makes an additionalcontribution in one lump sum equal to five per centum (5%) of the compensationhe received for the aforesaid period of time plus regular interest thereon fromthe date he became a member to the date of payment.

(j)         Creditable serviceat retirement shall include any service rendered by a member while on leave ofabsence to serve as a member or officer of the General Assembly which is notcreditable toward retirement under the Legislative Retirement Fund provided theallowance of such credit shall be contingent upon the cancellation of servicecredit in the Fund and the transfer of the member's contributions plusaccumulated interest from the Fund to this System.

(j1)       Any member maypurchase creditable service for service as a member of the General Assembly nototherwise creditable under this section, provided the service is not creditedin the Legislative Retirement Fund nor the Legislative Retirement System, andfurther provided the member pays a lump sum amount equal to the full cost ofthe additional service credits calculated on the basis of the assumptions usedfor the purposes of the actuarial valuation of the System's liabilities, takinginto account the additional retirement allowance arising on account of theadditional service credits commencing at the earliest age at which a membercould retire on an unreduced retirement allowance as determined by the Board ofTrustees upon the advice of the consulting actuary, plus an administrative feeto be set by the Board of Trustees. Notwithstanding the foregoing provisions ofthis subsection that provide for the purchase of service credits, the terms"full cost", "full liability", and "full actuarialcost" include assumed annual post‑retirement allowance increases, asdetermined by the Board of Trustees, from the earliest age at which a membercould retire on an unreduced service allowance.

(j2)       The creditableservice of a member who was a member of the Local Governmental Employees'Retirement System, the Consolidated Judicial Retirement System, or theLegislative Retirement System, and whose accumulated contributions and reservesare transferred from that System to this System, includes service that wascreditable in the Local Governmental Employees' Retirement System, theConsolidated Judicial Retirement System, or the Legislative Retirement System,and membership service with those Retirement Systems is membership service withthis Retirement System.

(k)        Notwithstanding anyother provision of this Chapter, any person who withdrew his contributions inaccordance with the provisions of G.S. 128‑27(f) or G.S. 135‑5(f)or the rules and regulations of the Law‑Enforcement Officers' RetirementSystem and who subsequently returns to service may, upon completion of fiveyears of membership service, repay in a total lump sum any and all of theaccumulated contributions previously withdrawn with interest compoundedannually at the rate of six and one‑half percent (6.5%) for each calendaryear from the year of withdrawal to the year of repayment plus a fee to coverexpense of handling which shall be determined by the Board of Trustees, andreceive credit for the service forfeited at time of withdrawal. Theseprovisions shall apply equally to retired members who had attained five yearsof membership service prior to retirement. The retirement allowance of aretired member who restores service under this subsection shall be increasedthe month following the month payment is received. The increase in theretirement allowance shall be the difference between the initial retirementallowance, under any optional allowance elected at the time of retirement, andthe amount of the retirement allowance, under any optional allowance elected atthe time of retirement, to which the retired member would have been entitledhad the service not been previously forfeited, adjusted by any increases in theretirement accrual rate occurring between the member's date of retirement andthe date of payment. The increase in the retirement allowance shall not includeany adjustment for cost‑of‑living increases granted since the dateof retirement.

Notwithstanding any provisionto the contrary, a law enforcement officer who was transferred from the LawEnforcement Officers' Retirement System to this Retirement System pursuant toArticle 12C of Chapter 143 of the General Statutes and withdrew his accumulatedcontributions prior to January 1, 1985, in accordance with G.S. 128‑27(f)or G.S. 135‑5(f) for non‑law enforcement service and who has fiveyears or more of membership service standing to his credit may repay in a totallump sum the accumulated contributions previously withdrawn with interestcompounded annually at the rate of six and one‑half percent (6.5%) foreach calendar year from the year of withdrawal to the year of repayment plus afee to cover expense of handling which shall be determined by the Board ofTrustees, and receive credit for the service forfeited at time ofwithdrawal(s). The retirement allowance of a retired member who restoresservice under this subsection shall be increased the month following the monthpayment is received. The increase in the retirement allowance shall be thedifference between the initial retirement allowance, under any optionalallowance elected at the time of retirement, and the amount of the retirementallowance, under any optional allowance elected at the time of retirement, towhich the retired member would have been entitled had the service not beenpreviously forfeited, adjusted by any increases in the retirement accrual rateoccurring between the member's date of retirement and the date of payment. Theincrease in the retirement allowance shall not include any adjustment for cost‑of‑livingincreases granted since the date of retirement.

(l)         Repealed bySession Laws 1981, c. 636, s. 1. For proviso as to inchoate or accrued rights,see Editor's Note below.

(l1)       Notwithstanding anyother provision of this Chapter, any member and any retired member as hereindescribed may purchase creditable service previously rendered to any state,territory, or other governmental subdivision of the United States other thanthis State by paying a total lump‑sum payment determined as follows:

(1)        For members whocompleted 10 years of current membership service, and retired members whocompleted 10 years of current membership service prior to retirement, whosemembership began on or before July 1, 1981, and who make such purchase withinthree years after first becoming eligible, the cost shall be an amount equal tothe monthly compensation the member earned when he first entered membershipservice, times the employee contribution rate at that time, times the months ofservice to be purchased, times two, with sufficient interest added thereto soas to equal the full cost of allowing such service, plus an administrative feeto be set by the Board of Trustees.

(2)        For members whocomplete five years of current membership service, and retired members whocomplete five years of current membership service prior to retirement, andeligible members and retired members covered by subdivision (1) of thissubsection, whose membership began on or before July 1, 1981, but who did notor 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 creditscalculated on the basis of the assumptions used for the purposes of theactuarial valuation of the System's liabilities and shall take into account theretirement allowance arising on account of the additional service creditscommencing at the earliest age at which the member could retire on an unreducedallowance, as determined by the Board of Trustees upon the advice of theconsulting actuary, plus an administrative fee to be set by the Board ofTrustees. Notwithstanding the foregoing provisions of this subsection thatprovide for the purchase of service credits, the term "full liability"includes assumed postretirement allowance increases, as determined by the Boardof Trustees, from the earliest age at which a member could retire on anunreduced service retirement allowance. Notwithstanding the requirement of fiveyears of current membership service, a member whose membership began prior tothe service the member desires to purchase shall be eligible to purchasecreditable service under this subdivision upon returning to service as ateacher or employee upon completion of a total of five years of membershipservice and upon completion of one year of current membership service.

Current membership serviceshall mean membership service earned since the service previously rendered toany state, territory, or other governmental subdivision of the United Statesother than this State. Creditable service under this subsection shall beallowed only at the rate of one year of out‑of‑state service foreach year of membership service in this State, with a maximum allowable of 10years of out‑of‑state service. Such service is limited to full‑timeservice which would be allowable under the laws governing this System. Creditwill be allowed only if no benefit is allowable in another public retirementsystem as a result of the service.

(m)       Notwithstanding anylanguage to the contrary of any provision of this section, or of any repealedprovision of this section that was repealed with the inchoate and accruedrights preserved, all repayments and purchases of service credits, allowedunder the provisions of this section or of any repealed provision of thissection that was repealed with inchoate and accrued rights preserved, must bemade within three years after the member first becomes eligible to make suchrepayments and purchases. Any member who does not repay or purchase servicecredits within said three years after first eligibility to make such repaymentsand purchases may, under the same conditions as are otherwise required, repayor purchase service credits provided that the repayment or purchase equals thefull cost of the service credits calculated on the basis of the assumptionsused for purposes of the actuarial valuation of the system's liabilities andshall take into account the additional retirement allowance arising on accountof such additional service credit commencing at the earliest age at which suchmember could retire on an unreduced retirement allowance as determined by theBoard of Trustees upon the advice of the consulting actuary. Notwithstandingthe foregoing provisions of this subsection that provide for the purchase ofservice credits, the terms "full cost", "full liability",and "full actuarial cost" include assumed annual post‑retirementallowance increases, as determined by the Board of Trustees, from the earliestage at which a member could retire on an unreduced service allowance.Notwithstanding the foregoing, on and after July 1, 2001, the provisions ofthis subsection shall not apply to the repayment of contributions withdrawnpursuant to subsection (k) of this section.

(n)        Repealed by SessionLaws 1981, c. 636, s. 1. For proviso as to inchoate or accrued rights, seeEditor's Note below.

(o)        Repealed by SessionLaws 1981, c. 636, s. 1. For proviso as to inchoate or accrued rights, seeEditor's Note below.

(p)        Credit for priortemporary State employment. – Notwithstanding any other provision of thisChapter, a member may purchase service credit for temporary State employmentupon completion of 10 years of membership service and subject to the conditionthat the member had been classified as a temporary employee for more than threeyears. Each employer shall certify to the Board of Trustees that an employee iseligible to purchase this service credit prior to the member making payment.Payment for the service credit shall be in a single lump sum based upon theamount the member would have contributed if he had been properly classified asa permanent employee and been a member of this retirement system.

(p1)      Part‑TimeService Credit. –

(1)        Notwithstanding anyother provision of this Chapter, upon completion of five years of membershipservice, any member may purchase service previously rendered as a part‑timeteacher or employee of an employer as defined in G.S. 135‑1(11) or G.S.128‑21(11), except for temporary or part‑time service renderedwhile a full‑time student in pursuit of a degree or diploma in a degree‑grantingprogram. Payment shall be made in a single lump sum in an amount equal to thefull actuarial cost of providing credit for the service, together with interestand an administrative fee, as determined by the Board of Trustees on the adviceof the Retirement System's actuary. Notwithstanding the provisions of G.S. 135‑4(b),the Board of Trustees shall fix and determine by appropriate rules andregulations how much service in any year, as based on compensation, isequivalent to one year of service in proportion to "earnablecompensation", but in no case shall more than one year of service becreditable for all service in one year. Service rendered for the regular schoolyear in any district shall be equivalent to one year's service. Notwithstandingthe foregoing provisions of this subdivision that provide for the purchase ofservice credits, the terms "full cost", "full liability",and "full actuarial cost" include assumed annual post‑retirementallowance increases, as determined by the Board of Trustees, from the earliestage at which a member could retire on an unreduced service allowance.

(2)        Under allrequirements and conditions set forth in the preceding subdivision of this subsection(p1), except for the requirement that the completion of five years ofmembership service be subsequent to service rendered as a part‑timeteacher or employee of the State, any member with five or more years ofmembership service standing to his credit may purchase additional membershipservice for service rendered as a part‑time teacher or employee of theState if (i) the member terminates or has terminated employment in any capacityas a teacher or employee of the State, (ii) the purchase of the additionalmembership service causes the member to become eligible to commence an early orservice retirement allowance, and (iii) the member immediately elects tocommence retirement and become a beneficiary.

(3)        Under all therequirements and conditions set forth in subdivision (1) of this subsection,except for the condition that part‑time service rendered when a full‑timestudent in pursuit of a degree or diploma in a degree‑granting program isnot eligible for purchase, any member with five or more years of membershipservice standing to the member's credit may purchase creditable service forservice rendered as a part‑time teacher or employee of the State if thatservice was rendered on a permanent part‑time basis and required at least20 hours of service per week.

(q)        Notwithstanding anyother provision of this Chapter, any member who entered service or was restoredto service prior to July 1, 1982, and was excluded from membership servicesolely on account of having attained the age of 62 years, in accordance withformer G.S. 135‑3(6), may purchase membership service credits of suchexcluded service by making a lump‑sum payment equal to the contributionsthat would have been deducted pursuant to G.S. 135‑8(b) had he been amember of the Retirement System, increased by interest calculated at a rate ofseven percent (7%) per annum.

(r)        Notwithstanding anyother provision of this Chapter, any member may purchase creditable service forperiods of employer approved leaves of absence when in receipt of benefitsunder the North Carolina Workers' Compensation Act. This service shall bepurchased by paying a cost calculated in the following manner:

(1)        Leaves of AbsenceTerminated Prior to July 1, 1983. – The cost to a member whose employerapproved leave of absence, when in receipt of benefits under the North CarolinaWorkers' Compensation Act, terminated upon return to service prior to July 1,1983, shall be a lump sum amount payable to the Annuity Savings Fund equal tothe full liability of the service credits calculated on the basis of theassumptions used for purposes of the actuarial valuation of the system'sliabilities, and shall take into account the retirement allowance arising onaccount of the additional service credit commencing at the earliest age at whichthe member could retire on an unreduced retirement allowance, as determined bythe board of trustees upon the advice of the consulting actuary, plus anadministrative fee to be set by the board of trustees. Notwithstanding theforegoing provisions of this subdivision that provide for the purchase ofservice credits, the terms "full cost", "full liability",and "full actuarial cost" include assumed annual post‑retirementallowance increases, as determined by the Board of Trustees, from the earliestage at which a member could retire on an unreduced service allowance.

(2)        Leaves of AbsenceTerminating On and After July 1, 1983, but before January 1, 1988. – The costto a member whose employer approved leave of absence, when in receipt ofbenefits under the North Carolina Workers' Compensation Act, terminates uponreturn to service on and after July 1, 1983, but before January 1, 1988, shallbe a lump sum amount due and payable to the Annuity Savings Fund within sixmonths from return to service equal to the total employee and employerpercentage rates of contribution in effect at the time of purchase and based onthe annual rate of compensation of the member immediately prior to the leave ofabsence; Provided, however, the cost to a member whose amount due is not paidwithin six months from return to service shall be the amount due plus onepercent (1%) per month penalty for each month or fraction thereof the paymentis made beyond the six‑month period.

(3)        Leaves of AbsenceTerminating On and After January 1, 1988. – The cost to a member whose employerapproved leave of absence, when in receipt of benefits under the North CarolinaWorkers' Compensation Act, terminates upon or before a return to service on andafter January 1, 1988, shall be due and payable to the Annuity Savings Fundwithin six months from return to service and shall be a lump sum amount equalto the employee percentage rate of contribution in effect at the time ofpurchase applied to the annual rate of compensation of the member immediately priorto the leave of absence. For members electing to make this payment, themember's employer which granted the leave of absence, or the member's employerupon a return to service, or both, shall make a matching lump sum payment tothe Pension Accumulation Fund within six months from return to service equal tothe employer percentage rate of contribution in effect at the time of purchaseapplied to the annual rate of compensation of the member immediately prior tothe leave of absence. Such purchases of creditable service are applicable onlywhen members have membership service credits within 30 days prior to the leaveof absence and within 12 months following the leave of absence and suchmembership service is creditable service at the time of purchase. Notwithstandingany other provision of this subdivision, the cost to a member and to a member'semployer or former employer or both employers whose amount due is not paidwithin six months from return to service shall be the amount due plus onepercent (1%) per month penalty for each month or fraction thereof that thepayment is made after the six‑month period.

Notwithstandingthe requirement of this provision that a member return to service, a member whois in receipt of Workers' Compensation during the period for which he or shewould have otherwise been eligible to receive short‑term benefits asprovided in G.S. 135‑105 and who subsequently becomes a beneficiary inreceipt of a benefit as provided in G.S. 135‑106 may purchase creditableservice for any period of employer approved leave of absence when in receipt ofbenefits under the North Carolina Workers' Compensation Act. The cost topurchase such creditable service shall be as determined above provided theamount due if not paid within six months from the beginning of the long‑termdisability period as determined in G.S. 135‑106 shall be the amount dueplus one percent (1%) per month penalty for each month or fraction thereof thatthe payment is made after the six‑month period.

Wheneverthe creditable service purchased pursuant to this subsection is for a periodthat occurs during the four consecutive calendar years that would have producedthe highest average annual compensation pursuant to G.S. 135‑1(5) had themember not been on leave of absence without pay, then the compensation that themember would have received during the purchased period shall be included incalculating the member's average final compensation. In such cases, thecompensation that the member would have received during the purchased periodshall be based on the annual rate of compensation of the member immediatelyprior to the leave of absence.

(s)        Credit at Full Costfor Temporary Employment. – In addition to the provisions of subsection (p)above, any member may purchase creditable service for State employment whenclassified as a temporary teacher or employee subject to the conditions thatthe:

(1)        Member was employedby an employer as defined in G.S. 135‑1(11) or G.S. 128‑21(11);

(2)        Member's temporaryemployment met all other requirements of G.S. 135‑1(10) or (25), or G.S.128‑21(10);

(3)        Member has completedfive years or more of membership service;

(4)        Member acquires fromthe employer such certifications of temporary employment as are required by theBoard of Trustees; and

(5)        Member makes a lumpsum payment into the Annuity Savings Fund equal to the full liability of theservice credits calculated on the basis of the assumptions used for purposes ofthe actuarial valuation of the Retirement System's liabilities and shall take intoaccount the retirement allowance arising on account of the additional servicecredit commencing at the earliest age at which the member could retire on anunreduced retirement allowance, as determined by the Board of Trustees upon theadvice of the actuary, plus an administrative expense fee to be determined bythe Board of Trustees. Notwithstanding the foregoing provisions of thissubdivision that provide for the purchase of service credits, the terms"full cost", "full liability", and "full actuarial cost"include assumed annual post‑retirement allowance increases, as determinedby the Board of Trustees, from the earliest age at which a member could retireon an unreduced service allowance.

The provisions of this subsectionshall also apply to the purchase of creditable service for State employmentwhen classified as a permanent hourly employee in accordance with G.S. 126‑5(c4).

(t)         Credit at FullCost for Local Government Employment. – Any member may purchase creditableservice for any employment as an employee, as defined in G.S. 128‑21(10),of a local government employer not creditable in the North Carolina LocalGovernmental Employees' Retirement System upon completion of five years ofmembership service by making a lump‑sum payment into the Annuity SavingsFund. The payment by the member shall be equal to the full liability of theservice credits calculated on the basis of the assumptions used for purposes ofthe actuarial valuation of the Retirement System's liabilities, taking intoaccount the additional retirement allowance arising on account of theadditional service credits commencing at the earliest age at which the membercould retire with an unreduced retirement allowance, as determined by the Boardof Trustees upon the advice of the actuary plus an administrative expense feeto be determined by the Board of Trustees. Notwithstanding the foregoingprovisions of this subsection that provide for the purchase of service credits,the terms "full cost", "full liability", and "fullactuarial cost" include assumed annual post‑retirement allowanceincreases, as determined by the Board of Trustees, from the earliest age atwhich a member could retire on an unreduced service allowance.

(u)        Any member who wasa wildlife protector who elected to become a member of the Law EnforcementOfficers' Retirement System pursuant to Chapter 837 of the 1971 Session Laws bythe transfer of accumulated contributions from this Retirement System to theLaw Enforcement Officers' Retirement System and who has not subsequentlyapplied for and received a return of accumulated contributions shall beentitled to creditable service for the service as a non‑law enforcementofficer forfeited as a result of the transfer pursuant to Chapter 837 of the1971 Session Laws.

(v)        Omitted MembershipService. – A member who had service as an employee as defined in G.S. 135‑1(10)and G.S. 128‑21(10) or as a teacher as defined in G.S. 135‑1(25)and who was omitted from contributing membership through error may be allowedmembership service, after submitting clear and convincing evidence of theerror, as follows:

(1)        Within 90 days ofthe omission, by the payment of employee and employer contributions that wouldhave been paid; or

(2)        After 90 days andprior to three years of the omission, by the payment of the employee andemployer contributions that would have been paid plus interest compoundedannually at a rate equal to the greater of the average yield on the pensionaccumulation fund for the preceding calendar year or the actuarial investment rate‑of‑returnassumption, as adopted by the Board of Trustees; or

(3)        After three years ofthe omission, by the payment of an amount equal to the full cost of the servicecredits calculated on the basis of the assumptions used for the purposes of theactuarial valuation of the system's liabilities, and shall take into accountthe additional retirement allowance arising on account of such additionalservice credit commencing at the earliest age at which a member could retire onan unreduced retirement allowance, as determined by the Board of Trustees uponthe advice of the consulting actuary, plus an administrative fee to be set bythe Board of Trustees. Notwithstanding the foregoing provisions of thissubdivision that provide for the purchase of service credits, the terms"full cost", "full liability", and "full actuarialcost" include assumed annual post‑retirement allowance increases, asdetermined by the Board of Trustees, from the earliest age at which a membercould retire on an unreduced service allowance.

Nothing contained in thissubsection shall prevent an employer or member from paying all or a part of thecost of the omitted membership service; and to the extent paid by the employer,the cost paid by the employer shall be credited to the pension accumulationfund; and to the extent paid by the member, the cost paid by the members shallbe credited to the member's annuity savings account; provided, however, anemployer does not discriminate against any member or group of members in hisemploy in paying all or any part of the cost of the omitted membership service.

(w)       Credit at Full Costfor Federal Employment. – Notwithstanding any other provisions of this Chapter,a member, upon the completion of five years of membership service, may purchasecreditable service for periods of federal employment, provided that the memberis not receiving any retirement benefits resulting from this federalemployment, and provided that the member is not vested in the particularfederal retirement system to which the member may have belonged while a federalemployee. The member shall purchase this service by making a lump sum amountpayable to the Annuity Savings Fund equal to the full liability of the servicecredits calculated on the basis of the assumptions used for purposes of theactuarial valuation of the system's liabilities, and shall take into accountthe retirement allowance arising on account of the additional service creditcommencing at the earliest age at which the member could retire on an unreducedretirement allowance, as determined by the Board of Trustees upon the advice ofthe consulting actuary, plus an administrative fee to be set by the Board ofTrustees. Notwithstanding the foregoing provisions of this subsection thatprovide for the purchase of service credits, the terms "full cost","full liability", and "full actuarial cost" include assumedannual post‑retirement allowance increases, as determined by the Board ofTrustees, from the earliest age at which a member could retire on an unreducedservice allowance.

Members may also purchasecreditable service for periods of employment with public community serviceentities within the State funded entirely with federal funds, other than thefederal government, that are not covered by the provisions of G.S. 128‑21(11)or G.S. 135‑1(11), under the same terms and conditions that areapplicable to the purchase of creditable service for periods of federalemployment in accordance with this subsection. "Public community serviceentities" as used in this subsection shall mean community action, humanrelations, manpower development, and community development programs as definedin Articles 19 and 21 of Chapter 160A and Article 18 of Chapter 153A of theGeneral Statutes and any other similar programs that the Board of Trustees mayadopt.

(x)        Repealed by SessionLaws 2001‑424, s. 32.32(c), effective July 1, 2001.

(y)        A member who is abeneficiary of the Disability Income Plan provided for in Article 6 of thisChapter shall be granted creditable service for each month that the member iseligible for and for which a benefit is paid under the provisions of G.S. 135‑105and G.S. 135‑106; provided, however, that in no instance shall a memberbe granted creditable service under this subsection if creditable service isearned or credited for the same month in this retirement system or any otherretirement system administered by the State.

(z)        Credit at Full Costfor Leave Due to Extended Illness. – Any member in service with five or moreyears of membership service standing to his credit may purchase creditableservice for periods of interrupted service while on leave without pay statusdue to the member's illness or injury, excluding leave due to maternity,provided that any single such interrupted service shall have included suchperiod of time during which the member failed to earn at least two monthsmembership service, by making a lump sum amount payable to the Annuity SavingsFund equal to the full liability of the service credits calculated on the basisof the assumptions used for purposes of the actuarial valuation of the system'sliabilities; and the calculation of the amount payable shall take into accountthe retirement allowance arising on account of the additional service creditcommencing at the earliest age at which the member could retire on an unreducedretirement allowance, as determined by the Board of Trustees upon the advice ofthe consulting actuary, plus an administrative fee to be set by the Board ofTrustees. Notwithstanding the foregoing provisions of this subsection thatprovide for the purchase of service credits, the terms "full cost","full liability", and "full actuarial cost" include assumedannual post‑retirement allowance increases, as determined by the Board ofTrustees, from the earliest age at which a member could retire on an unreducedservice allowance.

(aa)      Credit at Full Costfor Maternity Leave. – Notwithstanding other provisions of this Chapter, anymember in service with five or more years of credited membership service maypurchase creditable service for periods of service which were interrupted dueto parental leave, pregnancy or childbirth, or involuntary administrativefurlough due to a lack of funds to support the position by making a lump sumamount payable to the Annuity Savings Fund equal to the full liability of theservice credits calculated on the basis of the assumptions used for purposes ofthe actuarial valuation of the system's liabilities; and the calculation of theamount payable shall take into account the retirement allowance arising onaccount of the additional service credit commencing at the earliest age atwhich the member could retire on an unreduced retirement allowance, asdetermined by the Board of Trustees upon the advice of the consulting actuary,plus an administrative fee to be set by the Board of Trustees. Creditableservice purchased under this subsection may not exceed six months per parentalleave, pregnancy or childbirth, or involuntary administrative furlough due to alack of funds to support the position. Notwithstanding the foregoing provisionsof this subsection that provide for the purchase of service credits, the term"full liability" includes assumed annual postretirement allowanceincreases, as determined by the Board of Trustees, from the earliest age atwhich a member could retire on an unreduced service allowance.

(bb)      Credit at Full Costfor Probationary Local Government Employment. – Notwithstanding any otherprovision of this Chapter, a member may purchase creditable service, prior toretirement, for employment with any local employer as defined in G.S. 128‑21(11)when considered to be in a probationary or employer‑imposed waitingperiod status, between the date of employment and the date of membershipservice with the Local Governmental Employees' Retirement System, provided thatthe former employer of such a member has revoked this probationary employmentor waiting period policy.

The member shall purchase thisservice by making a lump‑sum amount payable to the Annuity Savings Fundequal to the full liability of the service credits calculated on the basis ofthe assumptions used for purposes of the actuarial valuation of the liabilitiesof the retirement system, and the calculation of the amount payable shall takeinto account the retirement allowance arising on account of the additionalservice credit commencing at the earliest age at which the member could retireon an unreduced retirement allowance, as determined by the Board of Trusteesupon the advice of the consulting actuary, plus an administrative fee to be setby the Board of Trustees. Notwithstanding the provisions of this subsectionthat provide for the purchase of service credits, the term "fullliability" includes assumed annual postretirement allowance increases, asdetermined by the Board of Trustees, from the earliest age at which a membercould retire on an unreduced service allowance.

(cc)      Credit forEmployment in Charter School Operated by a Private Nonprofit Corporation. – Anymember may purchase creditable service for any employment as an employee of acharter school operated by a private nonprofit corporation whose board ofdirectors did not elect to participate in the Retirement System under G.S. 135‑5.3upon completion of five years of membership service after that charter schoolemployment by making a lump‑sum payment into the Annuity Savings Fund.The payment by the member shall be equal to the full liability of the servicecredits calculated on the basis of the assumptions used for purposes of theactuarial valuation of the Retirement System's liabilities, taking into accountthe additional retirement allowance arising on account of the additionalservice credits commencing at the earliest age at which the member could retirewith an unreduced retirement allowance, as determined by the Board of Trusteesupon the advice of the actuary plus an administrative expense fee to bedetermined by the Board of Trustees. Notwithstanding the foregoing provisionsof this subsection that provide for the purchase of service credits, the terms "fullcost", "full liability", and "full actuarial cost"include assumed annual postretirement allowance increases, as determined by theBoard of Trustees, from the earliest age at which a member could retire on anunreduced service allowance.

(dd)      Purchase of ServiceCredits Through Rollover Contributions From Certain Other Plans. – Notwithstandingany other provision of this Article, and without regard to any limitations oncontributions otherwise set forth in this Article, a member, who is eligible torestore or purchase membership or creditable service pursuant to the provisionsof G.S. 135‑4, may, subject to such rules and regulations established bythe Board of Trustees, purchase such service credits through rollovercontributions to the Annuity Savings Fund from (i) an annuity contractdescribed in Section 403(b) of the Internal Revenue Code, (ii) an eligible planunder Section 457(b) of the Internal Revenue Code which is maintained by astate, political subdivision of a state, or any agency or instrumentality of astate or political subdivision of a state, (iii) an individual retirementaccount or annuity described in Section 408(a) or 408(b) of the InternalRevenue Code that is eligible to be rolled over and would otherwise beincludible in gross income, or (iv) a qualified plan described in Section401(a) or 403(a) of the Internal Revenue Code. Notwithstanding the foregoing,the Retirement System shall not accept any amount as a rollover contributionunless such amount is eligible to be rolled over to a qualified trust inaccordance with applicable law and the member provides evidence satisfactory tothe Retirement System that such amount qualifies for rollover treatment. Unlessreceived by the Retirement System in the form of a direct rollover, the rollovercontribution must be paid to the Retirement System on or before the 60th dayafter the date it was received by the member.

Purchase of Service CreditsThrough Plan‑to‑Plan Transfers. – Notwithstanding any otherprovision of this Article, and without regard to any limitations oncontributions otherwise set forth in this Article, a member, who is eligible torestore or purchase membership or creditable service pursuant to the provisionsof G.S. 135‑4, may, subject to such rules and regulations established bythe Board of Trustees, purchase such service credits through a direct transferto the Annuity Savings Fund of funds from (i) an annuity contract described inSection 403(b) of the Internal Revenue Code or (ii) an eligible plan underSection 457(b) of the Code which is maintained by a state, politicalsubdivision of a state, or any agency or instrumentality of a state orpolitical subdivision of a state.

(ee)      Purchase of ServiceCredits Through Plan‑to‑Plan Transfers. – Notwithstanding any otherprovision of this Article, and without regard to any limitations oncontributions otherwise set forth in this Article, a member, who is eligible torestore or purchase membership or creditable service pursuant to the provisionsof G.S. 135‑4, may, subject to such rules and regulations established bythe Board of Trustees, purchase such service credits through a direct transferto the Annuity Savings Fund of funds from (i) the Supplemental RetirementIncome Plans A, B, or C of North Carolina or (ii) any other definedcontribution plan qualified under Section 401(a) of the Internal Revenue Codewhich is maintained by the State of North Carolina, a political subdivision ofa state, or any agency or instrumentality of a state or political subdivisionof a state.

(ff)        RetroactiveMembership Service. – A member who is reinstated to service as an employee asdefined in G.S. 135‑1(10) or as a teacher as defined in G.S. 135‑1(25)retroactively to the date of prior involuntary termination (with backpay andbenefits) may be allowed membership service, after submitting clear andconvincing evidence of the reinstatement, as follows:

(1)        Within 90 days ofthe involuntary termination, by the payment of employee and employercontributions that would have been paid; or

(2)        After 90 days of theinvoluntary termination, by the payment of the employee and employercontributions that would have been paid plus interest compounded annually at arate equal to the greater of the average yield on the pension accumulation fundfor the preceding calendar year or the actuarial investment rate‑of‑returnassumption, as adopted by the Board of Trustees.

Nothing contained in thissubsection shall prevent an employer or member from paying all or a part of thecost of the retroactive membership service; and to the extent paid by theemployer, the cost paid by the employer shall be credited to the pensionaccumulation fund; and to the extent paid by the member, the cost paid by themember shall be credited to the member's annuity savings account; provided,however, an employer does not discriminate against any member or group ofmembers in his employ in paying all or any part of the cost of the retroactivemembership service.

In the event a member receiveda return of accumulated contributions subsequent to an involuntary terminationas provided in G.S. 135‑5(f), the member may redeposit, within 90 days ofreinstatement retroactive to the date of prior involuntary termination, in theannuity savings fund by single payment an amount equal to the total amount hepreviously withdrew plus regular interest and restore the creditable serviceforfeited upon receiving his return of accumulated contributions.

(gg)      If a member who isan elected government official and has not vested in this System on July 1,2007, is convicted of an offense listed in G.S. 135‑18.10 for actscommitted after July 1, 2007, then that member shall forfeit all benefits underthis System. If a member who is an elected government official and has vestedin this System on July 1, 2007, is convicted of an offense listed in G.S. 135‑18.10for acts committed after July 1, 2007, then that member is not entitled to anycreditable service that accrued after July 1, 2007. No member shall forfeit anybenefit or creditable service earned from a position not as an electedgovernment official.

(hh)      Credit at Full Costfor Service With The University of North Carolina During Which a MemberParticipated in the Optional Retirement Program. – Notwithstanding any otherprovisions of this Chapter, a member upon the completion of five years ofmembership service may purchase creditable service for periods of employmentwith The University of North Carolina during which the member participated inthe Optional Retirement Program as provided for in G.S. 135‑5.1, providedthat the member is not receiving, and is not entitled to receive, anyretirement benefits resulting from this employment. The member shall purchasethis service by making a lump‑sum amount payable to the Annuity SavingsFund equal to the full liability of the service credits calculated on the basisof the assumptions used for purposes of the actuarial valuation of the system'sliabilities and shall take into account the retirement allowance arising onaccount of the additional service credit commencing at the earliest age atwhich the member could retire on an unreduced retirement allowance, asdetermined 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 theforegoing provisions of this subsection that provide for the purchase ofservice credits, the terms "full cost," "full liability,"and "full actuarial cost" include assumed annual postretirementallowance increases, as determined by the Board of Trustees, from the earliestage at which a member could retire on an unreduced service allowance.  (1941, c. 25, s. 4; 1943,cc. 200, 783; 1945, c. 797; 1947, c. 575; 1949, c. 1056, ss. 2, 4; 1953, c.1050, s. 3; 1959, c. 513, s. 11/2; 1961, c. 516, s. 3; c. 779, s. 2; 1963, c.1262; 1965, c. 780, s. 1; c. 924; 1967, c. 720, s. 3; 1969, c. 1223, ss. 3, 4;1971, c. 117, ss. 9, 10; c. 993; 1973, c. 241, s. 2; c. 242, s. 1; c. 667, s.2; c. 737, s. 1; c. 816, s. 1; c. 1063; c. 1311, ss. 1‑5; 1975, c. 205,s. 2; c. 875, s. 47; 1977, cc. 317, 790; 1979, c. 826; c. 866, s. 2; c. 867; c.972, s. 3; 1981, c. 557, s. 3; c. 636, s. 1; c. 1116, s. 1; 1981 (Reg. Sess.,1982), c. 1396, s. 4; 1983, c. 533, s. 1; c. 725; 1983 (Reg. Sess., 1984), c.1030; c. 1034, ss. 230, 231; c. 1045, ss. 1, 2; 1985, c. 401, ss. 1, 2; c. 407,s. 1; c. 479, s. 193; c. 512; c. 530; c. 649, ss. 1, 4; c. 749, s. 1; 1987, c.533, s. 1; c. 717, s. 2; c. 738, s. 29(b); c. 809, s. 2; c. 821; c. 825; 1987(Reg. Sess., 1988), c. 1088, ss. 1‑4; c. 1103; c. 1110, s. 9; 1989, c.255, ss. 11‑20; c. 762, s. 3; 1991 (Reg. Sess., 1992), c. 1017, s. 2; c. 1029, s. 1; 1995, c. 507,s. 7.23D(b); 1998‑71, ss. 3, 4; 1998‑190, s. 1; 1998‑212, s.9.14A(c); 1998‑214, s. 2; 1999‑71, s. 1; 1999‑158, s. 2; 2001‑424,ss. 32.28(a), 32.32(a), 32.32(b), 32.32(c); 2002‑71, s. 5; 2002‑153,s. 4; 2002‑174, s. 3; 2003‑284, s. 30.18(b); 2003‑358, s. 3;2003‑359, ss. 7, 8, 9, 12; 2005‑91, s. 1; 2007‑179, s. 3(b);2007‑233, s. 1; 2007‑431, ss. 8, 11; 2009‑281, s. 1.)