State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_135 > GS_135-5_1

§ 135‑5.1.  Optionalretirement program for The University of North Carolina.

(a)        An OptionalRetirement Program provided for in this section is authorized and establishedand shall be implemented by the Board of Governors of The University of NorthCarolina. The Optional Retirement Program shall be underwritten by the purchaseof annuity contracts, which may be both fixed and variable contracts or acombination thereof, or financed through the establishment of a trust, for thebenefit of participants in the Program. Participation in the OptionalRetirement Program shall be limited to University personnel who are eligiblefor membership in the Teachers' and State Employees' Retirement Program and whoare:

(1)        Administrators andfaculty of The University of North Carolina with the rank of instructor orabove;

(2)        The President andemployees of The University of North Carolina who are appointed by the Board ofGovernors on recommendation of the President pursuant to G.S. 116‑11(4),116‑11(5), and 116‑14 or who are appointed by the Board of Trusteesof a constituent institution of The University of North Carolina upon therecommendation of the Chancellor pursuant to G.S. 116‑40.22(b);

(3)        Nonfacultyinstructional and research staff who are exempt from the State Personnel Act,as defined by the provisions of G.S. 126‑5(c1)(8), and the faculty of theNorth Carolina School of Science and Mathematics; and

(4)        Field faculty of theCooperative Agriculture Extension Service, and tenure track faculty in NorthCarolina State University agriculture research programs who are exempt from theState Personnel Act and who are eligible for membership in the Teachers' andState Employees' Retirement System pursuant to G.S. 135‑3(1), who in anyof the cases described in this subsection (i) had been members of the OptionalRetirement Program under the provisions of Chapter 338, Session Laws of 1971,immediately prior to July 1, 1985, or (ii) have sought membership as requiredin subsection (b), below. Under the Optional Retirement Program, the State andthe participant shall contribute, to the extent authorized or required, towardthe purchase of such contracts or deposited in such trust on the participant'sbehalf.

(b)        Participation inthe Optional Retirement Program shall be governed as follows:

(1)        Those participatingin the Optional Retirement Program immediately prior to July 1, 1985, under theprovisions of Chapter 338, Session Laws of 1971, are deemed automaticallyenrolled in the Program as established by this section.

(2)        Eligible employeesinitially appointed on or after July 1, 1985, shall at the same time ofentering upon eligible employment elect (i) to join the Retirement System inaccordance with the provisions of law applicable thereto or (ii) to participatein the Optional Retirement Program. This election shall be in writing and filedwith the Retirement System and with the employing institution and shall beeffective as of the date of entry into eligible service.

(3)        An election toparticipate in the Optional Retirement Program shall be irrevocable. Aneligible employee failing to elect to participate in the Optional RetirementProgram at the time of entry into eligible service shall automatically beenrolled as a member of the Retirement System.

(4)        No election by an eligibleemployee of the Optional Retirement Program shall be effective unless it isaccompanied by an appropriate application for the issuance of a contract orcontracts or trust participation under the Program.

(5)        If any participanthaving less than five years coverage under the Optional Retirement Programleaves the employ of The University of North Carolina and either retires orcommences employment with an employer not having a retirement program with thesame company underwriting the participant's annuity contract, regardless ofwhether the annuity contract is held by the participant, a trust, or theRetirement System, the participant's interest in the Optional RetirementProgram attributable to contributions of The University of North Carolina shallbe forfeited and shall either (i) be refunded to The University of NorthCarolina and forthwith paid by it to the Retirement System and credited to thepension accumulation fund or (ii) be paid directly to the Retirement System andcredited to the pension accumulation fund.

(c)        Each employinginstitution shall contribute on behalf of each participant in the OptionalRetirement Program an amount equal to a percentage of the participant'scompensation as established from time to time by the General Assembly. Eachparticipant shall contribute the amount which he or she would be required tocontribute if a member of the Retirement System. Contributions authorized orrequired by the provisions of this subsection on behalf of each participantshall be made, consistent with Section 414(h) of the Internal Revenue Code, bysalary reduction according to rules and regulations established by TheUniversity of North Carolina. Additional personal contributions may also bemade by a participant by payroll deduction or salary reduction to an annuity orretirement income plan established pursuant to G.S. 116‑17. Payment ofcontributions shall be made by the employing institution to the designatedcompany or companies underwriting the annuities or the trustees for the benefitof each participant, and this employer contribution shall not be subject to anyState tax if made under the Optional Retirement Program or, otherwise, bysalary reduction.

(d)        The Board ofGovernors of The University of North Carolina shall designate the company orcompanies from which contracts are to be purchased or the trustee responsiblefor the investment of contributions under the Optional Retirement Program, andshall approve the form and contents of such contracts or trust agreement. Inmaking this designation and giving such approval, the Board shall give dueconsideration to the following:

(1)        The nature andextent of the rights and benefits to be provided by these contracts or trustagreement for participants and their beneficiaries;

(2)        The relation ofthese rights and benefits to the amount of contributions to be made;

(3)        The suitability ofthese rights and benefits to the needs of the participants and the interest ofthe institutions of The University of North Carolina in recruiting andretaining faculty in a national market; and

(4)        The ability of thedesignated company or companies underwriting the annuity contracts or trustagreement to provide these suitable rights and benefits under such contracts ortrust agreement for these purposes.

Notwithstanding the provisionsof this subsection, no contractual relationship established under the OptionalRetirement Program pursuant to the authority granted by Chapter 338, SessionLaws of 1971, is deemed terminated by the provisions of this section.

(e)        The Board ofGovernors of The University of North Carolina may provide for theadministration of the Optional Retirement Program and may perform or authorizethe performance of all functions necessary for its administration.

(f)         Any eligibleemployee electing to participate in the Optional Retirement Program isineligible for membership in the Retirement System so long as he or she remainsemployed in any eligible position within The University of North Carolina, and,in this event, he or she shall continue to participate in the OptionalRetirement Program.

(g)        No retirementbenefit, death benefit, or other benefit under the Optional Retirement Programshall be paid by the State of North Carolina, or The University of NorthCarolina, or the Board of Trustees of the Teachers' and State Employees'Retirement System with respect to any employee selecting and participating inthe Optional Retirement Program or with respect to any beneficiary of thatemployee. Benefits shall be payable to participants or their beneficiaries onlyby the designated company in accordance with the terms of the contracts ortrust agreement.(1971,c. 338, s. 2; c. 916; 1973, c. 1425; 1977, c. 1070; 1985, c. 309; 1987 (Reg.Sess., 1988), c. 1086, s. 28; 2001‑424, s. 32.27; 2003‑356, s. 1; 2006‑172,ss. 2, 3.)