GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 498
Short Title: Military to Teacher Ret. Incentive. (Public)
Sponsors: Representatives Biggs, Loftis, Tyson, and Goodwin (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Pensions and Retirement, if favorable, Homeland Security and Military and
Veterans Affairs, if favorable, Rules, Calendar, and Operations of the House
March 26, 2025
*H498 -v-1*
A BILL TO BE ENTITLED 1
AN ACT TO INCENTIVIZE INDIVIDUALS WITH ACTIVE DUTY SERVICE IN THE 2
ARMED FORCES OF THE UNITED STATES TO BEC OME TEACHERS BY 3
PROVIDING SERVICE CREDIT UNDER THE TEACHERS' AND STATE EMPLOYEES' 4
RETIREMENT SYSTEM. 5
The General Assembly of North Carolina enacts: 6
SECTION 1. G.S. 135-4 reads as rewritten: 7
"§ 135-4. Creditable service. 8
… 9
(a1) The following definitions apply in this section: 10
(1) Active duty. – As defined in 38 U.S.C. § 101, except that this term does not 11
include periods of active duty in the Armed Forces of the United States 12
creditable in any other retirement system except the National Guard and does 13
not include periods of active duty for training. 14
(2) Active duty for training. – As defined in 38 U.S.C. § 101. 15
(3) Service in the uniformed services. – As defined in 38 U.S.C. § 4303. 16
… 17
(f) Armed Service Credit. –All of the following apply to certain service in the Armed 18
Forces of the United States: 19
… 20
(g) Teachers and other State employees who served in the uniformed services as defined 21
in the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. § 22
4303, services, who were not dishonorably discharged, and who returned to the service of the 23
State within a period of two years from date of discharge shall be credited with prior service for 24
such the period of service in the uniformed services for the maximum period that they are entitled 25
to reemployment under the Uniformed Services Employment and Reemployment Rights Act of 26
1994, 38 U.S.C. § 4301, et seq., or other federal law, and the salary or compensation of such a 27
the teacher or State employee during that period of service is deemed to be that salary or 28
compensation the employee would have received but for the period of service had the employee 29
remained continuously employed, if the determination of that salary or compensation is 30
reasonably certain. If the determination of the salary or compensation is not reasonably certain, 31
then it is deemed to be that employee's average rate of compensation during the 12-month period 32
immediately preceding the period of service. When a member who has served in the uniformed 33
services returns to work in compliance with the conditions of this subsection, that member's 34 General Assembly Of North Carolina Session 2025
Page 2 House Bill 498-First Edition
employer shall remit to the System all employer and employee contributions for the full period 1
of that member's military service. 2
(g1) Notwithstanding any other provision of this Article to the contrary, a member with 3
active duty service in the uniformed services who subsequently becomes a teacher is eligible for 4
creditable service in accordance with this subsection. All of the following apply: 5
(1) In order to be eligible for creditable service under this subsection, the 6
following criteria shall be met: 7
a. The member was not dishonorably discharged from service in the 8
uniformed services. 9
b. The member's active duty service in the uniformed services occurred 10
prior to that member's employment as a teacher and was not concurrent 11
with any time period for which membership service was earned in the 12
Retirement System. 13
c. The member has satisfied the licensure requirements to be a teacher 14
pursuant to G.S. 115C-270.20. 15
d. The member is currently employed as a teacher. Satisfactory evidence 16
of the active duty service in the uniformed services claimed by the 17
member shall be submitted to the Board of Trustees prior to that 18
member's separation from service as a teacher or retirement. 19
(2) The amount of creditable service for which a member is eligible under this 20
subsection shall not exceed four years. Subject to this maximum, the amount 21
of service credit a member receives under this subsection is equal to length of 22
the member's active duty service in the uniformed services. For periods of 23
service in the uniformed services that exceed four years, a member may 24
purchase credit for that excess service under G.S. 135-4.5, subject to the 25
qualifications and limitations under that section. 26
(3) The member's employer shall pay a lump sum amount credited to the Pension 27
Accumulation Fund for a member receiving creditable service under this 28
subsection. The amount payable shall be equal to the full liability increase of 29
the Retirement System due to the additional service credit plus an 30
administrative fee that is set by the Board of Trustees. The full liability 31
increase shall be calculated on the basis of the same assumptions used for the 32
purposes of the actuarial valuation of the liabilities of the Retirement System, 33
except for the following assumptions specific to this calculation: (i) the 34
allowance shall be assumed to commence at the earliest age at which the 35
member could retire on an unreduced retirement allowance and (ii) there shall 36
be assumed annual postretirement allowance increases set by the Board of 37
Trustees upon the advice of the consulting actuary. 38
…." 39
SECTION 2.(a) G.S. 135-4(f)(1) and G.S. 135-4(f)(2) are repealed. 40
SECTION 2.(b) G.S. 135-5(a3)(1) reads as rewritten: 41
"(1) Determine an amount equal to the member's accumulated contributions as 42
required under G.S. 135-8(b)(1) for all years during which the member earned 43
membership service, other than service earned through armed service credit 44
under G.S. 135-4(f), G.S. 135-4(g), G.S. 135-4 or G.S. 135-4.5, used in the 45
calculation of the retirement allowance that the member would receive under 46
this section." 47
SECTION 2.(c) G.S. 128-27(a3)(1) reads as rewritten: 48
"(1) Determine an amount equal to the member's accumulated contributions as 49
required under G.S. 128-30(b)(1) for all years during which the member 50
earned membership service, other than service earned through armed service 51 General Assembly Of North Carolina Session 2025
House Bill 498-First Edition Page 3
credit under G.S. 128-26(a1), G.S. 128-26(j1), G.S. 128-26 or G.S. 128-26.5, 1
used in the calculation of the retirement allowance that the member would 2
receive under this section." 3
SECTION 3. This act is effective when it becomes law and applies to members who 4
are first hired as teachers on or after that date. 5