Shorter Separation for Retired ADAs and APDs.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 2
HOUSE BILL 487
Committee Substitute Favorable 4/9/25

Short Title: Shorter Separation for Retired ADAs and APDs. (Public)
Sponsors:
Referred to:
March 25, 2025
*H487-v-2*
A BILL TO BE ENTITLED 1
AN ACT TO ALLOW CERT AIN RETIRED ASSISTAN T DISTRICT ATTORNEYS AND 2
RETIRED ASSISTANT PU BLIC DEFENDERS TO RE TURN TO WORK FOR THE 3
STATE AFTER A TWO-MONTH SEPARATION. 4
The General Assembly of North Carolina enacts: 5
SECTION 1.(a) G.S. 135-1(20) reads as rewritten: 6
(20) "Retirement" under this Chapter, except as otherwise provided, means the 7
commencement of monthly retirement benefits along with termination of 8
employment and the complete separation from active service with no intent or 9
agreement, express or implied, to return to service. A retirement allowance 10
under the provisions of this Chapter may only be granted upon retirement of 11
a member. In order for a member's retirement to become effective in any 12
month, the member must perform no wor k for an employer, including 13
part-time, temporary, substitute, or contractor work, at any time during the six 14
months immediately following the effective date of retirement. retirement, 15
except that in the case of a member who earned at least five years of 16
membership service as an assistant district attorney or assistant public 17
defender, as certified by the Administrative Office of the Courts, the 18
Conference of District Attorneys, or the Director of Indigent Services, the 19
period of separation required is two months if the beneficiary becomes 20
employed by the Judicial Branch. A member who is a full -time faculty 21
member of The University of North Carolina may effect a retirement 22
allowance under this Chapter, notwithstanding the six -month requirement 23
above, provided the member immediately enters the University's Phased 24
Retirement Program for Tenured Faculty as that program existed on May 25, 25
2011. For purposes of this subdivision, all of the following shall not be 26
considered service or work: 27
…." 28
SECTION 1.(b) G.S. 135-3(d) reads as rewritten: 29
"(d) If a beneficiary who retired on an early or service retirement allowance under this 30
Chapter is reemployed by, or otherwise engaged to perform services for, an employer 31
participating in the Retirement System on a part-time, temporary, interim, or on a fee for service 32
basis, whether contractual or otherwise at any time during (i) the six months immediately 33
following the effective date of retirement, retirement or, (ii) if the beneficiary earned at least five 34
years of m embership service as an assistant district attorney or assistant public defender , as 35
certified by the Administrative Office of the Courts, the Conference of District Attorneys, or the 36
General Assembly Of North Carolina Session 2025
Page 2 House Bill 487-Second Edition
Director of Indigent Services, the two months immediately following the effective date of 1
retirement if the beneficiary becomes employe d by the Judicial Branch, then the option of the 2
following subdivisions that has the lesser financial impact on the member, as determined by the 3
Retirement System, shall be applied: 4
…." 5
SECTION 1.(c) G.S. 135-106(b) reads as rewritten: 6
"(b) After the commencement of benefits under this section, the benefits payable under 7
the terms of this section during the first 36 months of the long -term disability period shall be 8
equal to sixty-five percent (65%) of 1/12th of the annual base rate of compensation last payable 9
to the participant or beneficiary prior to the beginning of the short-term disability period as may 10
be adjusted for percentage increases as provided under G.S. 135-108, plus sixty -five pe rcent 11
(65%) of 1/12th of the annual longevity payment to which the participant or beneficiary would 12
be eligible, to a maximum of three thousand nine hundred dollars ($3,900) per month reduced by 13
any primary Social Security disability benefits to which the beneficiary may be entitled, effective 14
as of the first of the month following the month of initial entitlement, and by monthly payments 15
for Workers' Compensation to which the participant or beneficiary may be entitled. When 16
primary Social Security disabili ty benefits are increased by cost -of-living adjustments, the 17
increased reduction shall be applied in the first month following the month in which the member 18
becomes entitled to the increased Social Security benefit. The monthly benefit shall be further 19
reduced by the amount of any monthly payments from the federal Department of Veterans 20
Affairs, any other federal agency or any payments made under the provisions of G.S. 127A-108, 21
to which the participant or beneficiary may be entitled on account of the same disability. 22
Provided, in any event, the benefit payable shall be no less than ten dollars ($10.00) a month. 23
However, a disabled participant may elect to receive any salary continuation as provided in 24
G.S. 135-104 in lieu of long-term disability benefits; provided such election shall not extend the 25
first 36 consecutive calendar months of the long -term disability period. An election to receive 26
any salary continuation for any part of any given day shall be in lieu of any long -term benefit 27
payable for that day, provided further, any lump-sum payout for vacation leave shall be treated 28
as if the beneficiary or participant had exhausted the leave and shall be in lieu of any long -term 29
benefit otherwise payable. Provided that, in any event, a beneficiary's benefit sh all be reduced 30
during the first 36 months of the long-term disability period by an amount, as determined by the 31
Board of Trustees, equal to a primary Social Security retirement benefit to which the beneficiary 32
might be entitled, effective as of the first of the month following the month of initial entitlement. 33
… 34
Notwithstanding the foregoing, the long -term disability benefit is payable so long as the 35
beneficiary is disabled and is in receipt of a primary Social Security disability benefit until the 36
earliest date at which the beneficiary is eligible for an unreduced service retirement allowance 37
from the Retirement System, at which time the beneficiary would receive a retirement allowance 38
calculated on the basis of the beneficiary's average final compensation at the time of disability as 39
adjusted to reflect compensation increases subsequent to the time of disability and the creditable 40
service accumulated by the beneficiary, including creditable service while in receipt of benefits 41
under the Plan. In the event t he beneficiary has not been approved and is not in receipt of a 42
primary Social Security disability benefit, the long -term disability benefit shall cease after the 43
first 36 months of the long -term disability period. When such a long -term disability recipien t 44
begins receiving this unreduced service retirement allowance from the System, that recipient 45
shall not be subject to the six-month applicable waiting period set forth in G.S. 135-1(20). 46
However, a beneficiary shall be entitled to a restoration of the long-term disability benefit in the 47
event the Social Security Administration grants a retroactive approval for primary Social Security 48
disability benefits with a benefit effective date within the first 36 months of the long -term 49
disability period. In such event, the long-term disability benefit shall be restored retroactively to 50
the date of cessation." 51
General Assembly Of North Carolina Session 2025
House Bill 487-Second Edition Page 3
SECTION 2.(a) The State Treasurer shall seek a favorable private letter ruling from 1
the Internal Revenue Service to determine that this act does not jeopardize the status of the 2
Teachers' and State Employees' Retirement System. The State Treasurer shall submit a request 3
for the private letter ruling required under this section by January 1, 2026, or within 120 days of 4
this section becoming law, whichever is later. 5
SECTION 2.(b) If the State Treasurer has met the obligation under Section 2(a) of 6
this act, and the Internal Revenue Service declines to make a private letter ruling or does not 7
issue a response by December 17, 2026, then this act is repealed. The State Treasurer shall notify 8
the Revisor of Statutes that the Internal Revenue Service declined to make a private letter ruling 9
or did not issue a response. Within three business days of notifying the Revisor of Statutes, the 10
State Treasurer shall notify all e mployers of the repeal of this act and shall publicly notice the 11
receipt of this information on the Department of State Treasurer's website. Within three business 12
days of receipt of the notice from the State Treasurer, an employer shall notify all former assistant 13
district attorneys and former assistant public defenders reemployed by that employer of the repeal 14
of this act. 15
SECTION 2.(c) If the Internal Revenue Service issues any determination other than 16
a favorable determination that this act does not jeo pardize the status of the Teachers' and State 17
Employees' Retirement System of North Carolina under the Internal Revenue Code, then this act 18
is repealed on the last day of the month following the month of receipt of that determination by 19
the State Treasurer . Upon receipt of that determination, the State Treasurer shall notify the 20
Revisor of Statutes of the determination and the date of receipt. Within three business days of 21
receiving a determination other than a favorable determination, the State Treasurer s hall notify 22
all employers of the repeal of this act and shall publicly notice the receipt of this information on 23
the Department of State Treasurer's website. Within three business days of receipt of the notice 24
from the State Treasurer, an employer shall no tify all former assistant district attorneys and 25
former assistant public defenders reemployed by that employer of the repeal of this act. 26
SECTION 2.(d) Notwithstanding any other provision of law to the contrary, in order 27
to pay costs associated with the a dministration of the provisions of this act, the Retirement 28
Systems Division of the Department of State Treasurer may increase receipts from the retirement 29
assets of the Teachers' and State Employees' Retirement System or pay costs associated with the 30
administration directly from the retirement assets. 31
SECTION 2.(e) This section is effective when it becomes law. 32
SECTION 3.(a) The Administrative Office of the Courts and the Director of Indigent 33
Services shall certify monthly to the Retirement System that a member is employed as an 34
assistant district attorney or assistant public defender and the total amount of membership service 35
they have earned as an assistant district attorney or assistant public defender. 36
SECTION 3.(b) Any beneficiary who earned at leas t five years of membership 37
service as an assistant district attorney or assistant public defender, that is subsequently employed 38
by the Administrative Office of the Courts, the Conference of District Attorneys, or the Director 39
of Indigent Services, shall not be eligible to elect into a position that would lead the beneficiary 40
to be eligible to accrue any benefits under G.S. 135-3. Notwithstanding G.S. 135-6(a) and 41
G.S. 135-2, any failure of the Administrative Office of the Courts, the Conference of District 42
Attorneys, or the Director of Indigent Services to comply with the foregoing shall be corrected 43
by the Executive Director of the Retirement System as may be appropriate under State and federal 44
law. Any costs of the correction, as determined by the Executi ve Director of the Retirement 45
System, shall be the sole responsibility of the Administrative Office of the Courts, the Conference 46
of District Attorneys, or the Director of Indigent Services, as appropriate, and shall be transferred 47
to the Pension Accumulat ion Fund under G.S. 135-8 under rules adopted by the Board of 48
Trustees. 49
SECTION 4. Effective July 1, 2025, there is appropriated from the General Fund to 50
the Department of State Treasurer the sum of one hundred thousand dollars ($100,000) in 51
General Assembly Of North Carolina Session 2025
Page 4 House Bill 487-Second Edition
nonrecurring funds for the 2025 -2026 fiscal year to be used to obtain the private letter ruling 1
required under Section 2 of this act. 2
SECTION 5. Except as otherwise provided, this act is effective January 1, 2027. 3