State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_135 > GS_135-5_4

§ 135‑5.4.  Optionalretirement program for State‑funded community colleges.

(a)        An OptionalRetirement Program provided for in this section is authorized and establishedand shall be implemented by the North Carolina Community Colleges System,("System"). The Optional Retirement Program shall be underwritten bythe purchase of annuity contracts, which may be both fixed and variablecontracts or a combination thereof, or financed through the establishment of atrust, for the benefit of the presidents of the community colleges all of whomare appointed after the implementation of the Program and who elect membershipas required by subsection (b) of this section. Under the Optional RetirementProgram, the State and the participant shall contribute, to the extentauthorized or required, toward the purchase of such contracts or deposited insuch trust on the participant's behalf.

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

(1)        Employees initiallyappointed on or after the implementation of the Optional Retirement Programshall at the same time of entering upon eligible employment elect (i) to jointhe Retirement System in accordance with the provisions of law applicablethereto or (ii) to participate in the Optional Retirement Program. Thiselection shall be in writing and filed with the Retirement System and with theemploying institution and shall be effective as of the date of entry intoeligible service.

(2)        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.

(3)        No election by aneligible employee of the Optional Retirement Program shall be effective unlessit is accompanied by an appropriate application for the issuance of a contractor contracts or trust participation under the Program.

(4)        If any participanthaving less than five years coverage under the Optional Retirement Programleaves the employ of the System and either retires or commences employment withan employer not having a retirement program with the same company underwritingthe participant's annuity contract, regardless of whether the annuity contractis held by the participant, a trust, or the Retirement System, theparticipant's interest in the Optional Retirement Program attributable tocontributions of the employing institution shall be forfeited and shall either(i) be refunded to the employing institution and forthwith paid by it to theRetirement System and credited to the pension accumulation fund or (ii) be paiddirectly to the Retirement System and credited to the pension accumulationfund.

(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 that 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 theemploying institution. Additional personal contributions may also be made by aparticipant by payroll deduction or salary reduction to an annuity orretirement income plan established pursuant to G.S. 115D‑25. 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 System shalldesignate the company or companies from which contracts are to be purchased orthe trustee responsible for the investment of contributions under the OptionalRetirement Program and shall approve the form and contents of such contracts ortrust agreement. In making this designation and giving such approval, the Boardshall give due consideration 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 System in recruiting and retaining faculty in anational and market;

(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.

In lieu of such designationand in order to provide a more efficient, cost‑effective, and flexibleProgram, the System may designate the company or companies designated for theOptional Retirement Program for State institutions of higher education asprescribed in G.S. 135‑5.1(d).

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 System oremploying institution may provide for the administration of the OptionalRetirement Program and may perform or authorize the performance of allfunctions 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 System, and, in this event, he orshe shall continue to participate in the Optional Retirement Program.

(g)        No retirementbenefit, death benefit, or other benefit under the Optional Retirement Programshall be paid by the State of North Carolina, or the System, or the Board ofTrustees of the Teachers' and State Employees' Retirement System with respectto any employee selecting and participating in the Optional Retirement Programor with respect to any beneficiary of that employee. Benefits shall be payableto participants or their beneficiaries only by the designated company inaccordance with the terms of the contracts or trust agreement. (2001‑424, s. 32.24(a);2001‑513, s. 24.)