Teachers’ and State Employees’ Retirement System (TSERS)
This program is sponsored by the State of North Carolina and governed by the Department of the State Treasurer.
TSERS is as a defined benefit plan (pension plan) and the benefit you receive at retirement is based on a formula. This formula considers your years and months of creditable service, your age, and your “average final compensation,” which is the average of your salary during your 48 highest-paid consecutive months. Neither the investment experience of the plan assets nor the amount contributed by you and the University, on your behalf, directly determines the amount of the guaranteed benefit you will receive at retirement.
Employer and employee contribution percentages are established by the General Assembly. Employee contributions to TSERS are made on a pre-tax basis. As a result, the University will deduct the contribution from your pay before calculating federal or state income tax withholding. The employee contribution for TSERS is 6%, this amount cannot be adjusted.
Beginning September 1, 2023, eligible SHRA/EHRA new hires have 30 days from their hire date or date of benefits-eligible employment to decide on a mandatory retirement of either TSERS or the Optional Retirement Program (ORP). If no election is made, the new hire is defaulted to the TSERS plan, this action is irrevocable.
Enrollment
Eligible employees have 30 days from commencing employment to elect to enroll in either TSERS or the Optional Retirement Program. Once a mandatory retirement plan election has been submitted, it is a binding choice even if the submission is made with more time remaining within the 30-day enrollment window. Failure to make an election within the 30-day time period will result in automatic membership in the Teachers’ and State Employees’ Retirement System (TSERS), the defined benefit plan. This consequence is irrevocable.
- NOTE: NC State will take an after-tax “general retirement” amount of 6% of base salary during the 30-day enrollment period. Once a retirement plan is selected, the general retirement amount is refunded and then sent to the selected vendor on a pre-tax basis.
| Hire Date | Enrollment Period | Enroll | Account Access |
|---|---|---|---|
On/After September 1, 2023 | 30 calendar days from hire/start date. Failure to enroll in your first 30 days will result in an irrevocable mandatory default into the TSERS plan. | Enrollment is completed via My Pack Portal>Employee Self Service>Benefits Details>My UNC Benefits
| ORBIT Once enrolled, and a payroll deduction to TSERS occurs, you can go online to www.myncretirement.com (ORBIT) to input your beneficiaries. Access to this online portal will usually occur about two weeks after the first payroll deduction for TSERS. Note: Beneficiaries may be changed at any time on the ORBIT platform. |
Vesting
You become vested once you have completed a minimum of five years of retirement service credit with the Retirement System. This means that you are eligible to apply for lifetime monthly retirement benefits based on the retirement formula, and the age and service requirements of the Retirement System in which you participate, provided you do not withdraw your contributions.To view your TSERS account, access the State Retirement Systems’ ORBIT retirement online system at: www.myncretirement.com. Click on ORBIT and then select “Register” if this is your first time logging in to this System and follow the instructions.
Retirement Eigibility
You may retire with an unreduced service retirement benefit after:
- you reach age 65 and complete five years of creditable service,
- you reach age 60 and complete 25 years of creditable service, or
- you complete 30 years of creditable service, at any age.
You may retire early with a reduced retirement benefit after:
- you reach age 50 and complete 20 years of creditable service, or
- you reach age 60 and complete five years of creditable service.
How Are Benefits Calculated?
As a defined benefit plan, the benefit received at retirement is determined by a formula. The formula used in calculating the maximum annual retirement benefit is the average of the employee’s salary during the four highest paid years in a row times a retirement factor set by the NC General Assembly times the total number of years and months of creditable service. Reduced retirement benefits are calculated using an additional reduction factor determined by the participant’s age and years of service. For employees participating in TSERS, additional service credit is granted based on the accumulated sick leave balance as of the retirement effective date. One month of service credit is granted for every 20 days of accrued sick leave or any portion thereof (provided the portion exceeds one hour).
How Are My Beneficiaries Protected?
Death Benefit
If a TSERS participant dies while in active service (or within 180 days of service separation if the contributions have not been withdrawn) after one year of contributing membership service, the beneficiaries will receive a single lump sum payment. The benefit amount is based on the highest 12 consecutive months of salary within the 24-month period preceding death. The benefit amount is no less than $25,000 and no more than $50,000.
Refund of Contributions
Beneficiaries will receive a refund of the employee’s contributions (with interest, if applicable).
Survivor’s Alternate Benefit
If specific age and/or years of service requirements have been met by an employee, a survivor’s alternate benefit may be paid as a life-time monthly annuity in lieu of a refund of contributions. For a beneficiary to be eligible for this option, only one principal beneficiary can be named by the employee for the Refund of Contributions.
Post Retirement Survivor Benefits
Depending on the participant’s choice of retirement payment option, a monthly survivor benefit may be payable to the named beneficiary upon the retiree’s death.
Retiree Health Benefits
When you retire and begin receiving monthly benefits from the ORP, you may also be eligible to enroll in the State Health Plan with the cost determined by when your employment started with the State. In all cases, the full cost of dependent coverage, if elected, must be paid by the retiree.
First Hired on/After January 1, 2021
- First Hired On/After January 1, 2021 – If you were hired on or after January 1, 2021, you will not be eligible to receive retiree or dependent medical benefits.
First Hired Prior to October 1, 2006
- If you were first hired prior to October 1, 2006, and retire with five or more years ORP participation, the State will pay either all or most of the cost.
First Hired On/After October 1, 2006
- If you were first hired on or after October 1, 2006, in order to receive individual coverage at no cost, you must retire with 20 or more years of retirement service credit;
- If you have 10 but less than 20 years of retirement service credit, you will have to pay 50 percent of the cost for your coverage,
- With five but less than 10 years, you will have to pay the full cost for your coverage.
Based on current law, if you previously withdrew, transferred, or rolled-over your entire TSERS account, your first hire date is forfeited and will reset based on your re-employment date with the state. Upon termination/separation/retirement if you withdraw, transfer, or rollover your entire TSERS account you will forfeit your right to the State’s retiree group health plan coverage.
For more on Retiree Health Insurance, please visit the State Health Plan website.
Contribution Based Benefit Cap (CBBC)
On January 1, 2015, the Fiscal Integrity/Pension-Spiking Prevention Act became law. The law aims to control the practice of “pension spiking,” which occurs when a the compensation of a member of the Teachers’ and State Employees’ Retirement System (TSERS) or Law Enforcement Officers Retirement System (LEORS) substantially increases which creates a benefit that is significantly greater than the contributions paid by the member and that the employer would fund.
Employees who are members of TSERS or LEORS and who have been identified by the State Retirement System to have an Average Final Compensation (AFC) of $100,000 or greater, as adjusted annually for inflation may be subject to a CBBC liability at the time of retirement. This information includes employees who transfer to NC State from another state agency or university and who participate in TSERS or LEORS.
NC State has opted not to contribute to the liability created by the CBBC for employees hired or transferred to NC State and joined TSERS or LEORS on or after July 1, 2020. Employees covered by these plans and retiring with TSERS or LEORS and who are identified by the State Retirement System with a CBBC liability may choose one of the following options:
- Employee may pay the difference between their contributions and their expected benefit in order to receive a full pension benefit; or
- Employees may elect to receive a reduced pension benefit.