The state legislature has recently made several changes to pension rules for state employees, include changes to service buybacks, retirement payment options and short term disability. Learn more about these changes here.
Service Purchase Changes
Considering a State Retirement service purchase? Typically these are periods of time you worked for the state in the past and withdrew your contributions, or maybe a period of time you worked as a temp (ineligible for retirement). Submit your request before the end of the year or there will be limits on how many years you can buy. To date, there have not been limits on the amount of qualified creditable service you can purchase. However, effective Jan. 1, 2019 there will be a five year limit to the amount of service you can add to your account.
You must have five years of contributing service in the State Retirement System to be eligible to apply for a service purchase. You can find the different types of purchasable service, and the request forms here, under credit purchasing forms: https://orbit.myncretirement.com/Home/ApplicationForms
Retirement Payment Option Changes
Effective Jan. 1, 2019 the State Retirement System will eliminate three of the pension payment options at retirement. Information about these payment options can be found starting on page 17 of the retirement handbook https://www.nctreasurer.com/ret/Benefits%20Handbooks/TSERShandbook.pdf
The options being eliminated are:
- Option 6-2, Modified 100% Survivorship – electing this option, you received a reduced amount, but if you died a beneficiary would receive that same amount for the rest of their life. It had the added protection where if your beneficiary died before you, your pension would increase to the maximum amount.
- Option 6-3, Modified 50% Survivorship – similar to 6-2, but the amount you receive is reduced less, and your beneficiary receives half of what you received.
- Option 4, Social Security Leveling – Based on your Social Security estimate, you receive larger payments until age 62. Then your payments will be reduced for your social security benefit; assuming you file for benefits, you’ll have a constant income flow prior to and after filing for social security. All monthly payments stop at your death.
For the survivorships, Options 2 and 3 remain. The only difference is they do not provide you protection if your beneficiary dies first. You remain at the lower benefit amount for the rest of your life.
If one of these eliminated options is your preferred payment option, you must apply for a retirement effective Dec. 1, 2018 or sooner.
Short Term Disability Application Limits
Historically, employees could apply for short term disability at any point in the future after a disability had occurred. All that mattered was that the doctor said you were unable to perform your job while you were still in a paid status and the disability had been continuous.
Effective immediately, application for short term disability benefits must be filed within 14 months of the date of disability, or the date last worked, whichever is later.