§ 128-26. Allowance for service.
§ 128‑26. Allowance forservice.
(a) Each person whobecomes a member during the first year of his employer's participation, and whowas an employee of the same employer at any time during the year immediatelypreceding the date of participation, shall file a detailed statement of allservice rendered by him to that employer prior to the date of participation forwhich he claims credit.
A participating employer mayallow prior service credit to any of its employees on account of: their earlierservice to the aforesaid employer; or, their earlier service to any otheremployer as the term employer is defined in G.S. 128‑21(11); or, theirearlier service to any state, territory, or other governmental subdivision ofthe United States other than this State.
A participating employer mayallow prior service credit to any of its employees on account of service, asdefined in G.S. 135‑1(23), to the State of North Carolina to the extentof such service prior to the establishment of the Teachers' and StateEmployees' Retirement System on July 1, 1941; provided that employees allowedsuch prior service credit pay in a total lump sum an amount calculated on thebasis of compensation the employee earned when he first entered membership andthe employee contribution rate at that time together with interest thereon fromyear of first membership to year of payment shall be one half of the calculatedcost.
With respect to a memberretiring on or after July 1, 1967, the governing board of a participating unitmay allow credit for any period of military service in the armed forces of theUnited States if the person returned to the service of his employer within twoyears after having been honorably discharged, or becoming entitled to bedischarged, released, or separated from such armed services; provided that,notwithstanding the above provisions, any member having credit for not lessthan 10 years of otherwise creditable service may be allowed credit for suchmilitary services which are not creditable in any other governmental retirementsystem; provided further, that a member will receive credit for militaryservice under the provisions of this paragraph only if he submits satisfactoryevidence of the military service claimed and the participating unit of which heis an employee agrees to grant credit for such military service prior toJanuary 1, 1972.
A member retiring on or afterJuly 1, 1971, who is not granted credit for military service under theprovisions of the preceding paragraph will be allowed credit for any period inthe armed services of the United States up to the date he was first eligible tobe separated or released therefrom; provided that he was an employee as definedin G.S. 128‑21(10) at the time he entered military service, and either ofthe following conditions is met:
(1) He returns toservice, with the employer by whom he was employed when he entered militaryservice, within a period of two years after he is first eligible to beseparated or released from such military service under other than dishonorableconditions.
(2) He is in service,with the employer by whom he was employed when he entered military service, fora period of not less than 10 years after he is separated or released from sucharmed services under other than dishonorable conditions.
(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 service in one calendaryear.
(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 Articlethe compensation rates which if they had progressed with the rates of salaryincrease shown in the tables as prescribed in subsection (o) of G.S. 128‑28would have resulted in the same average salary of the member for the five yearsimmediately preceding the date of participation of his employer, as the recordsshow the member actually received.
(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 the service certified on his prior servicecertificate; and if he has sick leave standing to his credit upon retirement onor after July 1, 1971, one month of credit for each 20 days or portion thereof,but not less than one hour; sick leave shall not be counted in computingcreditable service for the purpose of determining eligibility for disabilityretirement or for 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. 128‑24(1a) and who subsequently returns to service fora period of five years, may thereafter repay the amount withdrawn plus regularinterest thereon from the date of withdrawal through the year of repayment andthereby increase his creditable service by the amount of creditable servicelost when this account was closed.
On and after July 1, 1973, amember whose account in the Teachers' and State Employees' Retirement Systemwas closed on account of absence from service under the provisions of G.S. 135‑3(3)and who subsequently became or becomes a member of this System with credit forfive years of service, may thereafter repay in a lump sum the amount withdrawnfrom the Teachers' and State Employees' Retirement System plus regular interestthereon from the date of withdrawal through the year of repayment and therebyincrease his creditable service in this System by the amount of creditableservice lost when his account was closed.
Notwithstanding any otherprovision of this Chapter, any member who entered service or was restored toservice prior to July 1, 1982, and was excluded from membership service solelyon account of having attained the age of 62 years, in accordance with formerG.S. 128‑24(3a), may purchase membership service credits for suchexcluded service by making a lump‑sum payment equal to the contributionsthat would have been deducted pursuant to G.S. 128‑30(b) had he been amember of the Retirement System, increased by interest calculated at a rate ofseven percent (7%) per annum. Creditable service for unused sick leave shall beallowed only for sick leave accrued monthly during employment under a dulyadopted sick leave policy and for which the member may be able to take creditsand be paid for sick leave without restriction.
On and after January 1, 1986,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 participating employers from that System to thisRetirement System and whose accumulated contributions are transferred from thatSystem to this Retirement System, includes service that was creditable in theLaw Enforcement Officers' Retirement System; and membership service with thatSystem is membership service with this Retirement System; provided,notwithstanding any provisions of this Article to the contrary, any inchoate oraccrued rights of such a member to purchase creditable service for militaryservice, withdrawn service and prior service under the rules and regulations ofthe Law Enforcement Officers' Retirement System may not be diminished and maybe purchased as creditable service with this Retirement System under the sameconditions that would have otherwise applied.
(f) Effective January1, 1955, there shall be three classes of prior service certificates, to be designatedas Class A, Class B and Class C respectively. Each such certificate issued onaccount of service rendered to a Class A employer shall be a Class A priorservice certificate; each such certificate issued on account of servicerendered to a Class B employer shall be a Class B prior service certificate;and each such certificate issued on account of service rendered to a Class Cemployer shall be a Class C prior service certificate. Each Class C priorservice certificate shall specify a prior service benefit percentage rate whichshall be three per centum (3%) in the case of any member entitled to suchcertificate who is, at the date of participation of his employer, in a positioncovered by the Social Security Act under a federal‑State agreement and whichshall be five per centum (5%) in the case of a member entitled to suchcertificate but who at the date of participation of his employer is in aposition not so covered.
(g) 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. 128‑30(b)(4). 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.
(h) 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.
(h1) 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.
(i) Notwithstandingany other provision of this Chapter, any person who withdrew his contributionsin accordance with the provisions of G.S. 128‑27(f) or 135‑5(f) orthe rules and regulations of the Law Enforcement Officers' Retirement Systemand who subsequently returns to service may, upon completion of five years ofprior and current membership service, repay in a total lump sum any and all ofthe accumulated 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(s). Theseprovisions shall apply equally to retired members who had attained five yearsof prior and current membership service prior to retirement. The retirementallowance of a retired member who restores service under this subsection shallbe increased the month following the month payment is received. The increase inthe retirement 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.
(j) Repealed bySession Laws 1987, c. 617, s. 3.
(j1) Notwithstanding anyother provision of this Chapter, any member and any retired member as hereindescribed may purchase creditable service for service in the Armed Forces ofthe United States, not otherwise allowed, by paying a total lump sum paymentdetermined as follows:
(1) For members whocompleted 10 years of membership service, and retired members who completed 10years of membership service prior to retirement, and whose membership began onor prior to January 1, 1988, and who make such purchase within three yearsafter first 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 such service, plus an administrative fee to be set bythe Board of Trustees.
(2) 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 (1) of this subdivision, whose membershipbegan on or before January 1, 1988, but who did not or do not make suchpurchase within three years after first becoming eligible, the cost shall be anamount equal to the full liability of the service credits calculated on thebasis of the assumptions used for the purposes of the actuarial valuation ofthe System's liabilities and shall take into account the retirement allowancearising on account of the additional service credits commencing at the earliestage at which the member could retire on an unreduced allowance, as determinedby the 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 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.
Creditable service allowedunder this subdivision shall be only for the initial period of "activeduty", as defined in 38 U.S. Code Section 101(21), in the Armed Forces ofthe United States up to the date the member was first eligible to be separatedand released and for subsequent periods of "active duty", as definedin 38 U.S. Code Section 101(21), as required by the Armed Forces of the United Statesup to the date of first eligibility for separation or release, but shall notinclude periods of active duty in the Armed Forces of the United Statescreditable in any other retirement system except the National Guard or anyreserve component of the Armed Forces of the United States, and shall notinclude periods of "active duty for training", as defined in 38 U.S.Code Section 101(22), or periods of "inactive duty training", asdefined in 38 U.S. Code Section 101(23), rendered in any reserve component ofthe Armed Forces of the United States. Provided, creditable service may beallowed only for active duty in the Armed Forces of the United States of amember that resulted in a general or honorable discharge from duty. The membershall submit satisfactory evidence of the service claimed. For purposes of thissubsection, membership service may include any membership or prior servicecredits transferred to this Retirement System pursuant to G.S. 128‑24.
(j2) 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 prior and current membership service, and retired memberswho completed 10 years of prior and current membership service prior toretirement, and whose membership began on or before January 1, 1988, and whomake such purchase within three years after first becoming eligible, the costshall be an amount equal to the monthly compensation the member earned when hefirst entered membership service, times the employee contribution rate at thattime, times the months of service to be purchased, times two, with sufficientinterest added thereto so as to equal the full cost of allowing such service,plus an administrative fee to be set by the Board of Trustees.
(2) For members whocomplete five years of prior and current membership service, and retiredmembers who complete five years of prior and current membership service priorto retirement, and eligible members and retired members covered by subdivision(1) of this subsection, whose membership began on or before January 1, 1988,but who did not or do not make such purchase within three years after firstbecoming eligible, the cost shall be an amount equal to the full liability ofthe service credits calculated on the basis of the assumptions used for the purposesof the actuarial valuation of the System's liabilities and shall take intoaccount the retirement allowance arising on account of the additional servicecredits commencing at the earliest age at which the member could retire on anunreduced 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 term "fullliability" includes assumed postretirement allowance increases, asdetermined by the Board of Trustees, from the earliest age at which a membercould retire on an unreduced service retirement allowance. Notwithstanding therequirement of five years of current membership service, a member whosemembership began prior to the service the member desires to purchase shall beeligible to purchase creditable service under this subdivision upon returningto service as an employee upon completion of a total of five years ofmembership service and upon completion of one year of current membershipservice.
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 service in this State, with a maximum allowable of 10 years of out‑of‑stateservice. Such service is limited to full‑time service which would beallowable under the laws governing this System. Credit will be allowed only ifno benefit is allowable in another public retirement system as a result of theservice.
(k) 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 purchases 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 January 1, 2003, the provisions ofthis subsection shall not apply to the repayment of contributions withdrawnpursuant to subsection (i) of this section.
(l) Notwithstandingany other provision of this Chapter, any member may purchase creditable servicefor periods of employer approved leaves of absence when in receipt of benefitsunder the North Carolina Workers' Compensation Act. This service shall be purchasedby 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 atwhich the member could retire on an unreduced retirement allowance, as determinedby the 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. The cost to a member whose employerapproved leave of absence, when in receipt of benefits under the North CarolinaWorkers' Compensation Act, terminates upon return to service on and after July1, 1983, shall be a lump sum amount due and payable to the Annuity Savings Fundwithin six months from return to service equal to the total employee andemployer percentage rates of contribution in effect at the time of purchase andbased on the annual rate of compensation of the member immediately prior to theleave of absence; Provided, however, the cost to a member whose amount due isnot paid within six months from return to service shall be the amount due plusone percent (1%) per month penalty for each month or fraction thereof thepayment is made beyond the six‑month period.
Whenever the creditableservice purchased pursuant to this subsection is for a period that occursduring the four consecutive calendar years that would have produced the highestaverage annual compensation pursuant to G.S. 128‑21(5) had the member notbeen on leave of absence without pay, then the compensation that the memberwould 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.
In the case of a lawenforcement officer electing to purchase service under this section who is inreceipt of benefits under the North Carolina Workers' Compensation Act due toserious bodily injury suffered in the line of duty as a result of anintentional or unlawful act of another, as certified by the head of theemploying law enforcement agency, and whose approved leave of absenceterminates on or before a return to service on and after August 1, 2006, theemployer percentage rate of contribution payable under subdivision (2) of thissubsection shall be made by the employer that granted the leave of absence. Thecost to the law enforcement officer shall be reduced by the amount paid by theemployer. For purposes of this subsection, "serious bodily injury"means bodily injury that creates a substantial risk of death, or that causesserious permanent disfigurement, coma, a permanent or protracted condition thatcauses extreme pain, or permanent or protracted loss or impairment of thefunction of any bodily member or organ, or that results in prolonged hospitalization.
Nothing in this subsectionprevents an employer from voluntarily paying all or a part of the employeeportion of the total cost of the service credit purchased, and the employerdoes not discriminate against any eligible law enforcement officer in thissubsection employed by the employer by paying that portion of cost. To theextent paid by the employer, the employee portion paid by the employer shall becredited to the Pension Accumulation Fund; to the extent paid by the member,the employee portion paid by the member shall be credited to the member'sannuity savings account. A member shall pay any part of the employee portion ofthe total cost not paid by the employer.
(m) 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 investmentrate‑of‑return assumption, 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.In the event an employer pays all or a part of the full actuarial cost asdetermined in subdivision (3) of this subsection, the employer may, at itsoption, pay such amount either in a lump sum or by increasing its "accruedliability contribution" for the remainder of its accrued liability period.In the event an employer has satisfied its accrued liability contribution, theemployer may amortize its portion of the full actuarial cost over a period notto exceed ten years. The expense of making an actuarial valuation to determinethe accrued liability contribution or the additional accrued liabilitycontribution, required to amortize the portion of the full actuarial cost paidby the employer, shall be paid by the employer in a lump sum at the time of theactuarial valuation.
(n) Repealed by SessionLaws 2002‑153, s. 3, effective January 1, 2003.
(o) 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 liabilities of the Retirement System; and thecalculation of the amount payable shall take into account the retirementallowance arising on account of the additional service credit commencing at theearliest age at which the member could retire on an unreduced retirementallowance, as determined by the Board of Trustees upon the advice of theconsulting actuary, plus an administrative fee to be set by the Board ofTrustees. Members may also purchase creditable service for periods ofemployment with public community service entities within the State fundedentirely with federal funds, other than the federal government, that are notcovered by the provisions of G.S. 128‑21(11) or G.S. 135‑1(11),under the same terms and conditions that are applicable to the purchase ofcreditable service for periods of federal employment in accordance with thissubsection. "Public community service entities" as used in thissubsection shall mean community action, human relations, manpower development,and community development programs as defined in Articles 19 and 21 of Chapter160A and Article 18 of Chapter 153A of the General Statutes and any othersimilar programs that the Board of Trustees may adopt. 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 post‑retirementallowance increases, as determined by the Board of Trustees, from the earliestage at which a member could retire on an unreduced service allowance.
(p) 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‑timeemployee of a participating employer as defined in G.S. 128‑21(11) orG.S. 135‑1(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. 128‑26(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. Notwithstanding the foregoingprovisions of this subdivision 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.
(2) Under allrequirements and conditions set forth in the preceding subdivision of thissubsection, except for the requirement that the completion of five years ofmembership service be subsequent to service rendered as a part‑timeemployee, any member with five or more years of membership service standing tohis credit may purchase additional membership service for service rendered as apart‑time employee of an employer as defined in G.S. 128‑21(11) if(i) the member terminates or has terminated employment in any capacity as anemployee, (ii) the purchase of the additional membership service causes themember to become eligible to commence an early or service retirement allowance,and (iii) the member immediately elects to commence retirement and become abeneficiary.
(q) Credit at Full Costfor Probationary Employment. Notwithstanding any other provision of thisChapter, a member may purchase creditable service, prior to retirement, foremployment with an employer as defined in this Article when considered to be ina probationary or employer imposed waiting period status and thereby notregularly employed, between date of employment and date of membership servicewith the retirement system, provided that the employer or former employer ofsuch a member has revoked this probationary employment or waiting periodpolicy.
Provided, the member shallpurchase this service by making a lump sum amount payable to the AnnuitySavings Fund equal to the full liability of the service credits calculated onthe basis of the assumptions used for purposes of the actuarial valuation ofthe liabilities of the retirement system, and the calculation of the amountpayable shall take into account the retirement allowance arising on account ofthe additional service credit commencing at the earliest age at which themember could retire on an unreduced retirement 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. In no instance shall theamount payable be less than the contributions a member would have made duringthe employment plus four percent (4%) interest compounded annually.
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.
Nothing contained in thissubsection shall prevent an employer or member from paying all or a part of thecost of the probationary employment; 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 member shallbe credited to the member's annuity savings account; provided, however, anemployer does not discriminate against any member or group of members in itscurrent employ in paying all or any part of the cost of the probationaryemployment. In the event an employer pays all or a part of the full actuarialcost, the employer may, at its option, pay such amount either in a lump sum orby increasing its "accrued liability contribution" for the remainderof its accrued liability period. In the event an employer has satisfied itsaccrued liability contribution, the employer may amortize its portion of thefull actuarial cost over a period not to exceed 10 years. The expense of makingan actuarial valuation to determine the accrued liability contribution or theadditional accrued liability contribution, required to amortize the portion ofthe full actuarial cost paid by the employer, shall be paid by the employer ina lump sum at the time of the actuarial valuation.
(r) Credit at Full Costfor Temporary Government Employment. Notwithstanding any other provisions ofthis Chapter, any member may purchase creditable service for governmentemployment when classified as a temporary employee subject to the conditionsthat:
(1) The member wasemployed by an employer as defined in G.S. 128‑21(11) or G.S. 135‑1(11);
(2) The member'stemporary employment met all other requirements of G.S. 128‑21(10), orG.S. 135‑1(10) or (25);
(3) The member hascompleted five years or more of membership service;
(4) The member acquiresfrom the employer such certifications of temporary employment as are requiredby the Board of Trustees; and
(5) The member makes alump sum payment into the Annuity Savings Fund equal to the full liability ofthe service credits calculated on the basis of the assumptions used forpurposes of the actuarial valuation of the retirement system's liabilities, andthe calculation of the amount payable shall take into account the retirementallowance arising on account of the additional service credit commencing at theearliest age at which the member could retire on an unreduced retirementallowance, as determined by the Board of Trustees upon the advice of theactuary, plus an administrative fee to be determined by the Board of Trustees.Notwithstanding the foregoing provisions of this subdivision that provide forthe purchase of service credits, the terms "full cost", "fullliability", and "full actuarial cost" include assumed annualpost‑retirement allowance increases, as determined by the Board ofTrustees, from the earliest age at which a member could retire on an unreducedservice allowance.
(s) Credit at Full Costfor Employment Not Otherwise Creditable. Notwithstanding any other provisionsof this Chapter, any member may purchase creditable service for any employmentas an employee, as defined in G.S. 128‑21(10), of a local governmentemployer not creditable in any other retirement system or plan, upon completionof five years of membership service by making a lump sum payment into theAnnuity Savings Fund. The payment by the member shall be equal to the fullliability of the service credits calculated on the basis of the assumptionsused for purposes of the actuarial valuation of the retirement system'sliabilities, and the calculation of the amount payable shall take 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 fee to be determined bythe Board of Trustees. Notwithstanding the foregoing provisions of thissubsection 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.
(t) Purchase ofService Credits 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. 128‑26, 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 contribution unlesssuch amount is eligible to be rolled over to a qualified trust in accordancewith applicable law and the member provides evidence satisfactory to theRetirement System that such amount qualifies for rollover treatment. Unlessreceived by the Retirement System in the form of a direct rollover, therollover contribution must be paid to the Retirement System on or before the60th day after 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. 128‑26, 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.
(u) 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. 128‑26, 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.
(u1) (See Editor'sNote for December 31, 2009, expiration provision) Credit at Full Cost forNonqualified Employment. Notwithstanding any other provisions of thisChapter, any member may purchase a maximum of five years of creditable servicefor nonqualified employment with an economic development organization thatreceives at least fifty percent (50%) of its funding from local government,upon the completion of five years of membership service, by making a lump‑sumpayment into the Annuity Savings Fund. The member shall obtain writtenverification of the service from the nonprofit corporation. The payment by themember shall be equal to the full liability of the service credits calculatedon the basis of the assumptions used for purposes of the actuarial valuation ofthe Retirement System's liabilities, and the calculation of the amount payableshall take into account the additional retirement allowance arising on accountof the additional service credits commencing at the earliest age at which themember could retire with an unreduced retirement allowance, as determined bythe Board of Trustees upon the advice of the actuary, plus an administrativefee to 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 postretirement allowance increases,as determined by the Board of Trustees, from the earliest age at which a membercould retire on an unreduced service allowance.
(v) RetroactiveMembership Service. A member who is reinstated to service as an employee asdefined in G.S. 128‑21(10) retroactively to the date of prior involuntarytermination (with backpay and benefits) may be allowed membership service,after submitting clear and convincing evidence of the reinstatement, asfollows:
(1) Within 90 days ofthe involuntary termination, by the payment of employee and employer contributionsthat 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. 128‑27(f), the member may redeposit, within 90 daysof reinstatement retroactive to the date of prior involuntary termination, inthe annuity savings fund by single payment, an amount equal to the total amounthe previously withdrew plus regular interest and restore the creditable serviceforfeited upon receiving his return of accumulated contributions.
(w) 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. 128‑38.4 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. 128‑38.4for 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. (1939, c. 390, s. 6; 1941, c. 357, s. 5; 1943, c. 535; 1945, c. 526,s. 3; 1951, c. 274, s. 3; 1955, c. 1153, s. 3; 1967, c. 978, ss. 11, 12; 1969,c. 442, s. 6; 1971, c. 325, ss. 9‑11, 19; 1973, c. 243, s. 2; c. 667, s.1; c. 816, s. 3; c. 1310, ss. 1‑4; 1975, c. 205, s. 1; c. 485, ss. 1‑3;1977, c. 973; 1979, c. 866, s. 1; c. 868, ss. 1, 2; c. 1059, s. 1; 1981, c.557, s. 3; 1981 (Reg. Sess., 1982), c. 1283, s. 1; c. 1396, s. 3; 1983, c. 533,s. 2; 1983 (Reg. Sess., 1984), c. 1034, s. 231; 1985, c. 407, s. 1; c. 479, s.196(h); c. 649, ss. 1, 4; 1987, c. 533, s. 2; c. 617, ss. 1‑4; c. 717, s.1; 1987 (Reg. Sess., 1988), c. 1088, ss. 5, 6; c. 1110, s. 8; 1989, c. 255, ss.1‑10; c. 762, s. 2; 1989 (Reg. Sess., 1990), c. 1024, s. 28; 1991, c.753, s. 1; 1991 (Reg. Sess., 1992), c. 1017, s. 1; 1995, c. 507, s. 7.23D(a);1998‑71, ss. 1, 2; 1998‑214, s. 1; 1999‑158, s. 1; 2001‑487,s. 82; 2002‑71, s. 3; 2002‑153, ss. 1‑3; 2003‑359, ss.17‑19, 22; 2005‑91, s. 8; 2006‑29, s. 1; 2007‑179, s. 2(b); 2007‑304, s. 1; 2009‑281, s. 1;2009‑392, s. 1.)