NC
North Carolina House Bill H487

North Carolina 2025-2026 Regular Session

North Carolina House Bill H487 Compare Versions

OldNewDifferences
11 GENERAL ASSEMBLY OF NORTH CAROLINA
22 SESSION 2025
3-H 2
3+H 1
44 HOUSE BILL 487
5-Committee Substitute Favorable 4/9/25
5+
66
77 Short Title: Shorter Separation for Retired ADAs and APDs. (Public)
8-Sponsors:
9-Referred to:
8+Sponsors: Representatives Carson Smith and Wheatley (Primary Sponsors).
9+For a complete list of sponsors, refer to the North Carolina General Assembly web site.
10+Referred to: Pensions and Retirement, if favorable, Appropriations, if favorable, Rules,
11+Calendar, and Operations of the House
1012 March 25, 2025
11-*H487 -v-2*
13+*H487 -v-1*
1214 A BILL TO BE ENTITLED 1
13-AN ACT TO ALLOW CERT AIN RETIRED ASSISTANT DISTRICT ATTORNEYS AND 2
14-RETIRED ASSISTANT PUBLIC DEFENDERS TO RE TURN TO WORK FOR THE 3
15-STATE AFTER A TWO-MONTH SEPARATION. 4
15+AN ACT TO ALLOW RETI RED ASSISTANT DISTRICT ATTORNEYS AND RET IRED 2
16+ASSISTANT PUBLIC DEFENDERS TO RETURN TO WORK FOR THE STATE AFTER 3
17+A THIRTY-DAY SEPARATION. 4
1618 The General Assembly of North Carolina enacts: 5
1719 SECTION 1.(a) G.S. 135-1(20) reads as rewritten: 6
1820 (20) "Retirement" under this Chapter, except as otherwise provided, means the 7
1921 commencement of monthly retirement benefits along with termination of 8
2022 employment and the complete separation from active service with no intent or 9
2123 agreement, express or implied, to return to service. A retirement allowance 10
2224 under the provisions of this Chapter may only be granted upon retirement of 11
2325 a member. In order for a member's retirement to become effective in any 12
2426 month, the member must perform no work for an employer, including 13
2527 part-time, temporary, substitute, or contractor work, at any time during the six 14
2628 months immediately following the effective date of retirement. retirement, 15
27-except that in the case of a member who earned at least five years of 16
28-membership service as an assistant district attorney or assistant public 17
29-defender, as certified by the Administrative Office of the Courts, the 18
30-Conference of District Attorneys, or the Director of Indigent Services, the 19
31-period of separation required is two months if the beneficiary becomes 20
32-employed by the Judicial Branch. A member who is a full-time faculty 21
33-member of The University of North Carolina may effect a retirement 22
34-allowance under this Chapter, notwithstanding the six-month requirement 23
35-above, provided the member immediately enters the University's Phased 24
36-Retirement Program for Tenured Faculty as that program existed on May 25, 25
37-2011. For purposes of this subdivision, all of the following shall not be 26
38-considered service or work: 27
39-…." 28
40-SECTION 1.(b) G.S. 135-3(d) reads as rewritten: 29
41-"(d) If a beneficiary who retired on an early or service retirement allowance under this 30
42-Chapter is reemployed by, or otherwise engaged to perform services for, an employer 31
43-participating in the Retirement System on a part-time, temporary, interim, or on a fee for service 32
44-basis, whether contractual or otherwise at any time during (i) the six months immediately 33
45-following the effective date of retirement, retirement or, (ii) if the beneficiary earned at least five 34
46-years of membership service as an assistant district attorney or assistant public defender, as 35
47-certified by the Administrative Office of the Courts, the Conference of District Attorneys, or the 36 General Assembly Of North Carolina Session 2025
48-Page 2 House Bill 487-Second Edition
49-Director of Indigent Services, the two months immediately following the effective date of 1
50-retirement if the beneficiary becomes employed by the Judicial Branch, then the option of the 2
51-following subdivisions that has the lesser financial impact on the member, as determined by the 3
52-Retirement System, shall be applied: 4
53-…." 5
54-SECTION 1.(c) G.S. 135-106(b) reads as rewritten: 6
55-"(b) After the commencement of benefits under this section, the benefits payable under 7
56-the terms of this section during the first 36 months of the long-term disability period shall be 8
57-equal to sixty-five percent (65%) of 1/12th of the annual base rate of compensation last payable 9
58-to the participant or beneficiary prior to the beginning of the short-term disability period as may 10
59-be adjusted for percentage increases as provided under G.S. 135-108, plus sixty-five percent 11
60-(65%) of 1/12th of the annual longevity payment to which the participant or beneficiary would 12
61-be eligible, to a maximum of three thousand nine hundred dollars ($3,900) per month reduced by 13
62-any primary Social Security disability benefits to which the beneficiary may be entitled, effective 14
63-as of the first of the month following the month of initial entitlement, and by monthly payments 15
64-for Workers' Compensation to which the participant or beneficiary may be entitled. When 16
65-primary Social Security disability benefits are increased by cost-of-living adjustments, the 17
66-increased reduction shall be applied in the first month following the month in which the member 18
67-becomes entitled to the increased Social Security benefit. The monthly benefit shall be further 19
68-reduced by the amount of any monthly payments from the federal Department of Veterans 20
69-Affairs, any other federal agency or any payments made under the provisions of G.S. 127A-108, 21
70-to which the participant or beneficiary may be entitled on account of the same disability. 22
71-Provided, in any event, the benefit payable shall be no less than ten dollars ($10.00) a month. 23
72-However, a disabled participant may elect to receive any salary continuation as provided in 24
73-G.S. 135-104 in lieu of long-term disability benefits; provided such election shall not extend the 25
74-first 36 consecutive calendar months of the long-term disability period. An election to receive 26
75-any salary continuation for any part of any given day shall be in lieu of any long-term benefit 27
76-payable for that day, provided further, any lump-sum payout for vacation leave shall be treated 28
77-as if the beneficiary or participant had exhausted the leave and shall be in lieu of any long-term 29
78-benefit otherwise payable. Provided that, in any event, a beneficiary's benefit shall be reduced 30
79-during the first 36 months of the long-term disability period by an amount, as determined by the 31
80-Board of Trustees, equal to a primary Social Security retirement benefit to which the beneficiary 32
81-might be entitled, effective as of the first of the month following the month of initial entitlement. 33
82-… 34
83-Notwithstanding the foregoing, the long-term disability benefit is payable so long as the 35
84-beneficiary is disabled and is in receipt of a primary Social Security disability benefit until the 36
85-earliest date at which the beneficiary is eligible for an unreduced service retirement allowance 37
86-from the Retirement System, at which time the beneficiary would receive a retirement allowance 38
87-calculated on the basis of the beneficiary's average final compensation at the time of disability as 39
88-adjusted to reflect compensation increases subsequent to the time of disability and the creditable 40
89-service accumulated by the beneficiary, including creditable service while in receipt of benefits 41
90-under the Plan. In the event the beneficiary has not been approved and is not in receipt of a 42
91-primary Social Security disability benefit, the long-term disability benefit shall cease after the 43
92-first 36 months of the long-term disability period. When such a long-term disability recipient 44
93-begins receiving this unreduced service retirement allowance from the System, that recipient 45
94-shall not be subject to the six-month applicable waiting period set forth in G.S. 135-1(20). 46
95-However, a beneficiary shall be entitled to a restoration of the long-term disability benefit in the 47
96-event the Social Security Administration grants a retroactive approval for primary Social Security 48
97-disability benefits with a benefit effective date within the first 36 months of the long-term 49
98-disability period. In such event, the long-term disability benefit shall be restored retroactively to 50
99-the date of cessation." 51 General Assembly Of North Carolina Session 2025
100-House Bill 487-Second Edition Page 3
101-SECTION 2.(a) The State Treasurer shall seek a favorable private letter ruling from 1
102-the Internal Revenue Service to determine that this act does not jeopardize the status of the 2
103-Teachers' and State Employees' Retirement System. The State Treasurer shall submit a request 3
104-for the private letter ruling required under this section by January 1, 2026, or within 120 days of 4
105-this section becoming law, whichever is later. 5
106-SECTION 2.(b) If the State Treasurer has met the obligation under Section 2(a) of 6
107-this act, and the Internal Revenue Service declines to make a private letter ruling or does not 7
108-issue a response by December 17, 2026, then this act is repealed. The State Treasurer shall notify 8
109-the Revisor of Statutes that the Internal Revenue Service declined to make a private letter ruling 9
110-or did not issue a response. Within three business days of notifying the Revisor of Statutes, the 10
111-State Treasurer shall notify all employers of the repeal of this act and shall publicly notice the 11
112-receipt of this information on the Department of State Treasurer's website. Within three business 12
113-days of receipt of the notice from the State Treasurer, an employer shall notify all former assistant 13
114-district attorneys and former assistant public defenders reemployed by that employer of the repeal 14
115-of this act. 15
116-SECTION 2.(c) If the Internal Revenue Service issues any determination other than 16
117-a favorable determination that this act does not jeopardize the status of the Teachers' and State 17
118-Employees' Retirement System of North Carolina under the Internal Revenue Code, then this act 18
119-is repealed on the last day of the month following the month of receipt of that determination by 19
120-the State Treasurer. Upon receipt of that determination, the State Treasurer shall notify the 20
121-Revisor of Statutes of the determination and the date of receipt. Within three business days of 21
122-receiving a determination other than a favorable determination, the State Treasurer shall notify 22
123-all employers of the repeal of this act and shall publicly notice the receipt of this information on 23
124-the Department of State Treasurer's website. Within three business days of receipt of the notice 24
125-from the State Treasurer, an employer shall notify all former assistant district attorneys and 25
126-former assistant public defenders reemployed by that employer of the repeal of this act. 26
127-SECTION 2.(d) Notwithstanding any other provision of law to the contrary, in order 27
128-to pay costs associated with the administration of the provisions of this act, the Retirement 28
129-Systems Division of the Department of State Treasurer may increase receipts from the retirement 29
130-assets of the Teachers' and State Employees' Retirement System or pay costs associated with the 30
131-administration directly from the retirement assets. 31
132-SECTION 2.(e) This section is effective when it becomes law. 32
133-SECTION 3.(a) The Administrative Office of the Courts and the Director of Indigent 33
134-Services shall certify monthly to the Retirement System that a member is employed as an 34
135-assistant district attorney or assistant public defender and the total amount of membership service 35
136-they have earned as an assistant district attorney or assistant public defender. 36
137-SECTION 3.(b) Any beneficiary who earned at least five years of membership 37
138-service as an assistant district attorney or assistant public defender, that is subsequently employed 38
139-by the Administrative Office of the Courts, the Conference of District Attorneys, or the Director 39
140-of Indigent Services, shall not be eligible to elect into a position that would lead the beneficiary 40
141-to be eligible to accrue any benefits under G.S. 135-3. Notwithstanding G.S. 135-6(a) and 41
142-G.S. 135-2, any failure of the Administrative Office of the Courts, the Conference of District 42
143-Attorneys, or the Director of Indigent Services to comply with the foregoing shall be corrected 43
144-by the Executive Director of the Retirement System as may be appropriate under State and federal 44
145-law. Any costs of the correction, as determined by the Executive Director of the Retirement 45
146-System, shall be the sole responsibility of the Administrative Office of the Courts, the Conference 46
147-of District Attorneys, or the Director of Indigent Services, as appropriate, and shall be transferred 47
148-to the Pension Accumulation Fund under G.S. 135-8 under rules adopted by the Board of 48
149-Trustees. 49
150-SECTION 4. Effective July 1, 2025, there is appropriated from the General Fund to 50
151-the Department of State Treasurer the sum of one hundred thousand dollars ($100,000) in 51 General Assembly Of North Carolina Session 2025
152-Page 4 House Bill 487-Second Edition
153-nonrecurring funds for the 2025-2026 fiscal year to be used to obtain the private letter ruling 1
154-required under Section 2 of this act. 2
155-SECTION 5. Except as otherwise provided, this act is effective January 1, 2027. 3
29+except that in the case of a member who is a retired assistant district attorney 16
30+or retired assistant public defender, the period of separation required is 30 17
31+days. A member who is a full-time faculty member of The University of North 18
32+Carolina may effect a retirement allowance under this Chapter, 19
33+notwithstanding the six-month requirement above, provided the member 20
34+immediately enters the University's Phased Retirement Program for Tenured 21
35+Faculty as that program existed on May 25, 2011. For purposes of this 22
36+subdivision, all of the following shall not be considered service or work: 23
37+…." 24
38+SECTION 1.(b) G.S. 135-3(d) reads as rewritten: 25
39+"(d) If a beneficiary who retired on an early or service retirement allowance under this 26
40+Chapter is reemployed by, or otherwise engaged to perform services for, an employer 27
41+participating in the Retirement System on a part-time, temporary, interim, or on a fee for service 28
42+basis, whether contractual or otherwise at any time during (i) the six months immediately 29
43+following the effective date of retirement, retirement or, (ii) if the beneficiary is a retired assistant 30
44+district attorney or retired assistant public defender, the 30 days immediately following the 31
45+effective date of retirement, then the option of the following subdivisions that has the lesser 32
46+financial impact on the member, as determined by the Retirement System, shall be applied: 33
47+…." 34 General Assembly Of North Carolina Session 2025
48+Page 2 House Bill 487-First Edition
49+SECTION 1.(c) G.S. 135-106(b) reads as rewritten: 1
50+"(b) After the commencement of benefits under this section, the benefits payable under 2
51+the terms of this section during the first 36 months of the long-term disability period shall be 3
52+equal to sixty-five percent (65%) of 1/12th of the annual base rate of compensation last payable 4
53+to the participant or beneficiary prior to the beginning of the short-term disability period as may 5
54+be adjusted for percentage increases as provided under G.S. 135-108, plus sixty-five percent 6
55+(65%) of 1/12th of the annual longevity payment to which the participant or beneficiary would 7
56+be eligible, to a maximum of three thousand nine hundred dollars ($3,900) per month reduced by 8
57+any primary Social Security disability benefits to which the beneficiary may be entitled, effective 9
58+as of the first of the month following the month of initial entitlement, and by monthly payments 10
59+for Workers' Compensation to which the participant or beneficiary may be entitled. When 11
60+primary Social Security disability benefits are increased by cost-of-living adjustments, the 12
61+increased reduction shall be applied in the first month following the month in which the member 13
62+becomes entitled to the increased Social Security benefit. The monthly benefit shall be further 14
63+reduced by the amount of any monthly payments from the federal Department of Veterans 15
64+Affairs, any other federal agency or any payments made under the provisions of G.S. 127A-108, 16
65+to which the participant or beneficiary may be entitled on account of the same disability. 17
66+Provided, in any event, the benefit payable shall be no less than ten dollars ($10.00) a month. 18
67+However, a disabled participant may elect to receive any salary continuation as provided in 19
68+G.S. 135-104 in lieu of long-term disability benefits; provided such election shall not extend the 20
69+first 36 consecutive calendar months of the long-term disability period. An election to receive 21
70+any salary continuation for any part of any given day shall be in lieu of any long-term benefit 22
71+payable for that day, provided further, any lump-sum payout for vacation leave shall be treated 23
72+as if the beneficiary or participant had exhausted the leave and shall be in lieu of any long-term 24
73+benefit otherwise payable. Provided that, in any event, a beneficiary's benefit shall be reduced 25
74+during the first 36 months of the long-term disability period by an amount, as determined by the 26
75+Board of Trustees, equal to a primary Social Security retirement benefit to which the beneficiary 27
76+might be entitled, effective as of the first of the month following the month of initial entitlement. 28
77+… 29
78+Notwithstanding the foregoing, the long-term disability benefit is payable so long as the 30
79+beneficiary is disabled and is in receipt of a primary Social Security disability benefit until the 31
80+earliest date at which the beneficiary is eligible for an unreduced service retirement allowance 32
81+from the Retirement System, at which time the beneficiary would receive a retirement allowance 33
82+calculated on the basis of the beneficiary's average final compensation at the time of disability as 34
83+adjusted to reflect compensation increases subsequent to the time of disability and the creditable 35
84+service accumulated by the beneficiary, including creditable service while in receipt of benefits 36
85+under the Plan. In the event the beneficiary has not been approved and is not in receipt of a 37
86+primary Social Security disability benefit, the long-term disability benefit shall cease after the 38
87+first 36 months of the long-term disability period. When such a long-term disability recipient 39
88+begins receiving this unreduced service retirement allowance from the System, that recipient 40
89+shall not be subject to the six-month applicable waiting period set forth in G.S. 135-1(20). 41
90+However, a beneficiary shall be entitled to a restoration of the long-term disability benefit in the 42
91+event the Social Security Administration grants a retroactive approval for primary Social Security 43
92+disability benefits with a benefit effective date within the first 36 months of the long-term 44
93+disability period. In such event, the long-term disability benefit shall be restored retroactively to 45
94+the date of cessation." 46
95+SECTION 2.(a) The State Treasurer shall seek a private letter ruling from the 47
96+Internal Revenue Service to determine if Section 1 of this act jeopardizes the status of the 48
97+Teachers' and State Employees' Retirement System. 49
98+SECTION 2.(b) If the Internal Revenue Service determines that Section 1 of this act 50
99+jeopardizes the status of the Teachers' and State Employees' Retirement System of North Carolina 51 General Assembly Of North Carolina Session 2025
100+House Bill 487-First Edition Page 3
101+under the Internal Revenue Code, then Section 1 of this act is repealed on the last day of the 1
102+month following the month of receipt of that determination by the State Treasurer. Upon receipt 2
103+of that determination, the State Treasurer shall notify the Revisor of Statutes of the determination 3
104+and the date of receipt. Within three business days of receipt of the determination, the State 4
105+Treasurer shall notify all employers of the repeal of Section 1 of this act and shall publicly notice 5
106+the receipt of this information on the Department of State Treasurer's website. Within three 6
107+business days of receipt of the notice from the State Treasurer, an employer shall notify all former 7
108+assistant district attorneys and former assistant public defenders reemployed by that employer of 8
109+the repeal of Section 1 of this act. 9
110+SECTION 2.(c) Notwithstanding any other provision of law to the contrary, in order 10
111+to pay costs associated with the administration of the provisions of this act, the Retirement 11
112+Systems Division of the Department of State Treasurer may increase receipts from the retirement 12
113+assets of the Teachers' and State Employees' Retirement System or pay costs associated with the 13
114+administration directly from the retirement assets. 14
115+SECTION 3. Effective July 1, 2025, there is appropriated from the General Fund to 15
116+the Department of State Treasurer the sum of one hundred thousand dollars ($100,000) in 16
117+nonrecurring funds for the 2025-2026 fiscal year to be used to obtain the private letter ruling 17
118+required under Section 2 of this act. 18
119+SECTION 4. Except as otherwise provided, this act is effective January 1, 2027. 19