Shorter Separation for Retired ADAs and APDs.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 364

Short Title: Shorter Separation for Retired ADAs and APDs. (Public)
Sponsors: Senators Alexander and Johnson (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 24, 2025
*S364-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ALLOW RETI RED ASSISTANT DISTRI CT ATTORNEYS AND RET IRED 2
ASSISTANT PUBLIC DEFENDERS TO RETURN TO WORK FOR THE STATE AFTER 3
A THIRTY-DAY 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 work 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 is a retired assistant district attorney 16
or retired assistant public defend er, the period of separation required is 30 17
days. A member who is a full-time faculty member of The University of North 18
Carolina may effect a retirement allowance under this Chapter, 19
notwithstanding the six -month requi rement above, provided the member 20
immediately enters the University's Phased Retirement Program for Tenured 21
Faculty as that program existed on May 25, 2011. For purposes of this 22
subdivision, all of the following shall not be considered service or work: 23
…." 24
SECTION 1.(b) G.S. 135-3(d) reads as rewritten: 25
"(d) If a beneficiary who retired on an early or service retirement allowance under this 26
Chapter is reemployed by, or otherwise engaged to perform services for, an employer 27
participating in the Retirement System on a part-time, temporary, interim, or on a fee for service 28
basis, whether contractual or otherwise at any time during (i) the six months immediately 29
following the effective date of retirement, retirement or, (ii) if the beneficiary is a retired assistant 30
district attorney or retired assistant public defend er, the 30 days immediately following the 31
effective date of retirement , then the option of the following subdivisions that has the lesser 32
financial impact on the member, as determined by the Retirement System, shall be applied: 33
…." 34
SECTION 1.(c) G.S. 135-106(b) reads as rewritten: 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 364-First Edition
"(b) After the commencement of benefits under this section, the benefits payable under 1
the terms of this section during the first 36 months of the long -term disability period shall be 2
equal to sixty-five percent (65%) of 1/12th of the annual base rate of compensation last payable 3
to the participant or beneficiary prior to the beginning of the short-term disability period as may 4
be adjusted for percentage increases as pr ovided under G.S. 135-108, plus sixty -five percent 5
(65%) of 1/12th of the annual longevity payment to which the participant or beneficiary would 6
be eligible, to a maximum of three thousand nine hundred dollars ($3,900) per month reduced by 7
any primary Social Security disability benefits to which the beneficiary may be entitled, effective 8
as of the first of the month following the month of initial entitlement, and by monthly payments 9
for Workers' Compensation to which the participant or beneficiary may be en titled. When 10
primary Social Security disability benefits are increased by cost -of-living adjustments, the 11
increased reduction shall be applied in the first month following the month in which the member 12
becomes entitled to the increased Social Security bene fit. The monthly benefit shall be further 13
reduced by the amount of any monthly payments from the federal Department of Veterans 14
Affairs, any other federal agency or any payments made under the provisions of G.S. 127A-108, 15
to which the participant or benefi ciary may be entitled on account of the same disability. 16
Provided, in any event, the benefit payable shall be no less than ten dollars ($10.00) a month. 17
However, a disabled participant may elect to receive any salary continuation as provided in 18
G.S. 135-104 in lieu of long-term disability benefits; provided such election shall not extend the 19
first 36 consecutive calendar months of the long -term disability period. An election to receive 20
any salary continuation for any part of any given day shall be in lieu o f any long-term benefit 21
payable for that day, provided further, any lump -sum payout for vacation leave shall be treated 22
as if the beneficiary or participant had exhausted the leave and shall be in lieu of any long -term 23
benefit otherwise payable. Provided t hat, in any event, a beneficiary's benefit shall be reduced 24
during the first 36 months of the long-term disability period by an amount, as determined by the 25
Board of Trustees, equal to a primary Social Security retirement benefit to which the beneficiary 26
might be entitled, effective as of the first of the month following the month of initial entitlement. 27
… 28
Notwithstanding the foregoing, the long -term disability benefit is payable so long as the 29
beneficiary is disabled and is in receipt of a primary Social S ecurity disability benefit until the 30
earliest date at which the beneficiary is eligible for an unreduced service retirement allowance 31
from the Retirement System, at which time the beneficiary would receive a retirement allowance 32
calculated on the basis of the beneficiary's average final compensation at the time of disability as 33
adjusted to reflect compensation increases subsequent to the time of disability and the creditable 34
service accumulated by the beneficiary, including creditable service while in recei pt of benefits 35
under the Plan. In the event the beneficiary has not been approved and is not in receipt of a 36
primary Social Security disability benefit, the long -term disability benefit shall cease after the 37
first 36 months of the long -term disability peri od. When such a long -term disability recipient 38
begins receiving this unreduced service retirement allowance from the System, that recipient 39
shall not be subject to the six-month applicable waiting period set forth in G.S. 135-1(20). 40
However, a beneficiary shall be entitled to a restoration of the long-term disability benefit in the 41
event the Social Security Administration grants a retroactive approval for primary Social Security 42
disability benefits with a benefit effective date within the first 36 months of the long -term 43
disability period. In such event, the long-term disability benefit shall be restored retroactively to 44
the date of cessation." 45
SECTION 2. (a) The State Treasurer shall seek a private letter ruling from the 46
Internal Revenue Service to determin e if Section 1 of this act jeopardizes the status of the 47
Teachers' and State Employees' Retirement System. 48
SECTION 2.(b) If the Internal Revenue Service determines that Section 1 of this act 49
jeopardizes the status of the Teachers' and State Employees' Retirement System of North Carolina 50
under the Internal Revenue Code, then Section 1 of this act is repealed on the last day of the 51
General Assembly Of North Carolina Session 2025
Senate Bill 364-First Edition Page 3
month following the month of receipt of that determination by the State Treasurer. Upon receipt 1
of that determination, the State Treasurer shall notify the Revisor of Statutes of the determination 2
and the date of receipt. Within three business days of receipt of the determination, the State 3
Treasurer shall notify all employers of the repeal of Section 1 of this act and shall publicly notice 4
the receipt of this information on the Department of State Treasurer's website. Within three 5
business days of receipt of the notice from the State Treasurer, an employer shall notify all former 6
assistant district attorneys and former assistant public defenders reemployed by that employer of 7
the repeal of Section 1 of this act. 8
SECTION 2.(c) Notwithstanding any other provision of law to the contrary, in order 9
to pay costs associated with the administration of the provisions of this act, the Retire ment 10
Systems Division of the Department of State Treasurer may increase receipts from the retirement 11
assets of the Teachers' and State Employees' Retirement System or pay costs associated with the 12
administration directly from the retirement assets. 13
SECTION 3. Effective July 1, 2025, there is appropriated from the General Fund to 14
the Department of State Treasurer the sum of one hundred thousand dollars ($100,000) in 15
nonrecurring funds for the 2025 -2026 fiscal year to be used to obtain the private letter rul ing 16
required under Section 2 of this act. 17
SECTION 4. Except as otherwise provided, this act is effective January 1, 2027. 18