25-Year LEO Retirement With Full Benefits.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 707

Short Title: 25-Year LEO Retirement With Full Benefits. (Public)
Sponsors: Senators Smith, Garrett, and Waddell (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S707-v-1*
A BILL TO BE ENTITLED 1
AN ACT ALLOWING LAW ENFORCEMENT OFFICERS WHO ARE MEMBERS OF THE 2
TEACHERS' AND STATE EMPLOYEES' RETIREMEN T SYSTEM OR THE LOCA L 3
GOVERNMENTAL EMPLOYE ES' RETIREMENT SYSTE M TO RETIRE WITH 4
UNREDUCED BENEFITS A FTER ACHIEVING TWENT Y-FIVE YEARS OF 5
CREDITABLE SERVICE A ND MAKING CONFORMING CHANGES TO THE 6
RELATED LAWS. 7
The General Assembly of North Carolina enacts: 8
9
PART I. ALLOW LAW EN FORCEMENT OFFICERS T O RETIRE WITH 10
UNREDUCED BENEFITS A FTER TWENTY -FIVE YEA RS OF CREDITABLE 11
SERVICE 12
SECTION 1.(a) G.S. 135-5(a)(4) reads as rewritten: 13
"(4) Any member who is a law-enforcement officer and who (i) attains age 50 and 14
completes 15 or more years of creditable service in this capacity, (ii) attains 15
age 55 and completes five or more years of creditable service in this capacity, 16
or (iii) has completed 25 years of creditable service with a minimum of 15 17
years of creditable service in a law enforcement capacity may retire upon 18
electronic submission or written application to the Board of Trustees setting 19
forth at what time, as of the first day of a calendar month, not less than one 20
day nor more than 120 days subsequent to the execution and filing thereof, the 21
member desires to be retired; Provided, also, any retired. Any member who 22
has met the conditions herein required but of this subsection, does not retire, 23
and later becomes a teacher or an employee other than as a law -enforcement 24
officer shall continue to have the right to commence retirement." 25
SECTION 1.(b) G.S. 135-5(b21) reads as rewritten: 26
"(b21) Service Retirement Allowance of Members Retiring on or After July 1, 2019. 2019, 27
and Before January 1, 2026. – Upon retirement from service on or after July 1, 2019, and before 28
January 1, 2026, in accordance with subsection (a) or (a1) of this section, a member shall receive 29
the following service retirement allowance: 30
…." 31
SECTION 1.(c) G.S. 135-5 is amended by adding a new subsection to read: 32
"(b22) Service Retirement Allowance of Members Retiring on or After January 1, 2026. – 33
Upon retirement from service on or after January 1, 2026, in accordance with subsection (a) or 34
(a1) of this section, a member shall receive the following service retirement allowance: 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 707-First Edition
(1) A member who is a law enforcement officer or an eligible former law 1
enforcement officer shall receive a service retirement allowance computed as 2
follows: 3
a. If the member 's service retirement date occurs (i) on or after the 4
member's 55th birthday and completion of five years of creditable 5
service as a law enforcement officer or (ii) after the completion of 25 6
years of creditable service, then the allowance shall be equal to one 7
and eighty-two hundredths percent (1.82%) of the member 's average 8
final compensation multiplied by the number of years of the member's 9
creditable service. 10
b. If the memb er's service retirement date occurs (i) on or after the 11
member's 50th birthday and before the member's 55th birthday and (ii) 12
after the completion of 15 or more years of creditable service as a law 13
enforcement officer but before the completion of 25 years of creditable 14
service, then the retirement allowance shall be equal to the greater of 15
the following amounts: 16
1. The service retirement allowance payable under 17
sub-subdivision a. of this subdivision reduced by one -third of 18
one percent (1/3 of 1%) thereof fo r each month by which the 19
retirement date precedes the first day of the month coincident 20
with, or next following, the month the member would have 21
attained age 55. 22
2. The service retirement allowance as computed under 23
sub-subdivision a. of this subdivision reduced by five percent 24
(5%) times the difference between 25 years and the amount of 25
creditable service at retirement. 26
(2) A member who is not a law enforcement officer or an eligible former law 27
enforcement officer shall receive a service retirement allowance computed as 28
follows: 29
a. If the member 's service retirement date occurs (i) on or after the 30
member's 65th birthday and completion of five years of membership 31
service, (ii) after the completion of 30 years of creditable service, or 32
(iii) on or after the member's 60th birthday and completion of 25 years 33
of creditable service, then the allowance shall be equal to one and 34
eighty-two hundredths percent (1.82%) of the member's average final 35
compensation, multiplied by the number of years of creditable service. 36
b. If the member 's service retirement date occurs (i) after the member 's 37
60th birthday and before the member 's 65th birthday and (ii) prior to 38
the completion of 25 years or more of creditable service, then the 39
retirement allowance is the amount of the ret irement allowance in 40
sub-subdivision a. of this subdivision reduced by one -quarter of one 41
percent (1/4 of 1%) thereof for each month by which the retirement 42
date precedes the first day of the month coincident with, or next 43
following, the member's 65th birthday. 44
c. If the member's early service retirement date occurs (i) on or after the 45
member's 50th birthday and before the member's 60th birthday and (ii) 46
after completion of 20 years of creditable service but prior to the 47
completion of 30 years of creditable service, then the early service 48
retirement allowance shall be equal to the greater of the following 49
amounts: 50
General Assembly Of North Carolina Session 2025
Senate Bill 707-First Edition Page 3
1. The amount of the service retirement allowance as computed 1
under sub -subdivision a. of this subdivision reduced by the 2
sum of five -twelfths of one percent (5/12 of 1%) thereof for 3
each month by which the member 's retirement date precedes 4
the first day of the month coincident with, or next following, 5
the month the member would have attained age 60, plus 6
one-quarter of one percent (1/4 of 1%) thereof for each month 7
by which the member's 60th birthday precedes the first day of 8
the month coincident with, or next following, the member 's 9
65th birthday. 10
2. The amount of the service retirement allowance as computed 11
under sub-subdivision a. of this subdivi sion reduced by five 12
percent (5%) times the difference between 30 years and the 13
amount of creditable service at retirement. 14
3. If the member's creditable service commenced prior to July 1, 15
1994, the service retirement allowance equal to the actuarial 16
equivalent of the allowance payable at the age of 60 years as 17
computed in sub-subdivision b. of this subdivision. 18
d. Notwithstanding the foregoing provisions of this subsection, any 19
member whose creditable service commenced prior to July 1, 1963, 20
shall not receive less than the benefit provided by subsection (b) of this 21
section." 22
SECTION 1.(d) G.S. 135-5(m) reads as rewritten: 23
"(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 24
designated to receive a return of accumulated contributions shall have the right to elect to receive 25
in lieu thereof the reduced retirement allowance provided by Option 2 of subsection (g) above of 26
this section computed by assuming that the member had retired on the first day of the month 27
following the date of the member's death, provided that all four of the following conditions apply: 28
(1) The member falls into one of the following categories: 29
a. The member had attained such age and/or the minimum age, creditable 30
service amount, or combination of both necess ary to be eligible to 31
commence retirement with an early or service retirement allowance, 32
orallowance. 33
b. The member had obtained 20 years of creditable service in which case 34
the retirement allowance shall be computed in accordance with 35
G.S. 135-5(b21)(1)c. or G.S. 135-5(b21)(2)c., sub-subdivision 36
(b22)(1)b. o r sub -subdivision (b22)(2)c. of this section 37
notwithstanding the requirement of obtaining age 50, or50. 38
…." 39
SECTION 2.(a) G.S. 128-27(a)(5) reads as rewritten: 40
"(5) Any member who is a law enforcement officer and who (i) attains age 50 and 41
completes 15 or more years of creditable service in this capacity, or (ii) attains 42
age 55 and completes five or more years of creditable service in this capacity, 43
or (iii) who has c ompleted 25 years of creditable service with a minimum of 44
15 years of creditable service in a law enforcement capacity may retire upon 45
electronic submission or written application to the Board of Trustees setting 46
forth at what time, as of the first day of a calendar month, not less than one 47
day nor more than 120 days subsequent to the execution and filing thereof, the 48
member desires to be retired; provided, also, any retired. Any member who 49
has met the conditions required by this subdivision but does not re tire, and 50
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 707-First Edition
later becomes an employee other than as a law enforcement officer, continues 1
to have the right to commence retirement." 2
SECTION 2.(b) G.S. 128-27(b22) reads as rewritten: 3
"(b22) Service Retirement Allowance of Member Retiring on or After July 1, 2019. 2019, 4
and Before January 1, 2026. – Upon retirement from service in accordance with subsection (a) 5
or (a1) of this section, on or after July 1, 2019, and before January 1, 2026, a member shall 6
receive the following service retirement allowance: 7
…." 8
SECTION 2.(c) G.S. 128-27 is amended by adding a new subsection to read: 9
"(b23) Service Retirement Allowance of Member Retiring on or After January 1, 2026. – 10
Upon retirement from service in accordance with subsection (a) or (a1) of this section, on or after 11
January 1, 2026, a member shall receive the following service retirement allowance: 12
(1) A member who is a law enforcement officer or an eligible former law 13
enforcement officer shall receive a service retirement allowance computed as 14
follows: 15
a. If the member's service retirement date occurs (i) on or after the 16
member's 55th birthday and completion of five years of creditable 17
service as a law enforcement officer or (ii) after the completion of 25 18
years of creditable service, then the allowance shall be e qual to one 19
and eighty-five hundredths percent (1.85%) of the member 's average 20
final compensation multiplied by the number of years of the member's 21
creditable service. 22
b. If the member 's service retirement date occurs (i) on or after the 23
member's 50th birthday and before the member's 55th birthday and (ii) 24
after the completion of 15 or more years of creditable service as a law 25
enforcement officer but before the completion of 25 years of creditable 26
service, then the retirement allowance shall be equal to the greater of 27
the following amounts: 28
1. The service retirement allowance payable under 29
sub-subdivision a. of this subdivision reduced by one -third of 30
one percent (1/3 of 1%) thereof for each month by which the 31
retirement date precedes the first day of the month coincident 32
with, or next following, the month the member would have 33
attained age 55. 34
2. The service retirement allowance as computed under 35
sub-subdivision a. of this subdivision reduced by five percent 36
(5%) times the difference between 25 years and the amount of 37
creditable service at retirement. 38
(2) A member who is not a law enforcement officer or an eligible law enforcement 39
officer shall receive a service retirement allowance computed as follows: 40
a. If the member 's service retirement date occurs (i) on or after the 41
member's 65th birthday and the completion of five years of creditable 42
service, (ii) after the completion of 30 years of creditable service, or 43
(iii) on or after the member 's 60th birthday and the completion of 25 44
years of creditable service , then the allowance shall be equal to one 45
and eighty-five hundredths percent (1.85%) of the member 's average 46
final compensation, multiplied by the number of years of creditable 47
service. 48
b. If the member 's service retirement date occurs (i) after the membe r's 49
60th birthday and before the member 's 65th birthday and (ii) prior to 50
the completion of 25 years or more of creditable service, then the 51
General Assembly Of North Carolina Session 2025
Senate Bill 707-First Edition Page 5
retirement allowance is the amount of the retirement allowance in 1
sub-subdivision a. of this subdivision reduced by one-quarter of one 2
percent (1/4 of 1%) thereof for each month by which the retirement 3
date precedes the first day of the month coincident with, or next 4
following, the member's 65th birthday. 5
c. If the member's early service retirement date occurs (i) on or after the 6
member's 50th birthday and before the member's 60th birthday and (ii) 7
after completion of 20 years of creditable service but prior to the 8
completion of 30 years of creditable service, then the early service 9
retirement allowance shall be equal t o the greater of the following 10
amounts: 11
1. The amount of the service retirement allowance as computed 12
under sub -subdivision a. of this subdivision reduced by the 13
sum of five -twelfths of one percent (5/12 of 1%) thereof for 14
each month by which the retirement date precedes the first day 15
of the month coincident with, or next following, the month the 16
member would have attained age 60, plus one -quarter of one 17
percent (1/4 of 1%) thereof for each month by which the 18
member's 60th birthday precedes the first day of the month 19
coincident with, or next following, the member's 65th birthday. 20
2. The amount of the service retirement allowance as computed 21
under sub-subdivision a. of this subdivision reduced by five 22
percent (5%) times the difference between 30 years and the 23
amount of creditable service at retirement. 24
3. If the member's creditable service commenced prior to July 1, 25
1995, the amount of the actuarial equivalent of the allowance 26
payable at the age of 60 years as computed in sub -subdivision 27
b. of this subdivision. 28
d. Notwithstanding the foregoing provisions, any member whose 29
creditable service commenced prior to July 1, 1965, shall not receive 30
less than the benefit provided by subsection (b) of this section." 31
SECTION 2.(d) G.S. 128-27(m) reads as rewritten: 32
"(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 33
designated to receive a return of accumulated contributions shall have the right to elect to receive 34
in lieu thereof the reduced retirement allowance provided by Option two of subsection (g) above 35
of this section computed by assuming that the member had retired on the first day of the month 36
following the date of the member's death, provided that all four of the following conditions apply: 37
(1) The member falls into one of the following categories: 38
a. The member had attained such age and/or the minimum age, creditable 39
service amount, or combinat ion of both necessary to be eligible to 40
commence retirement with an early or service retirement allowance, 41
orallowance. 42
b. The member had obtained 20 years of creditable service in which case 43
the retirement allowance shall be computed in accordance with 44
G.S. 128-27(b22)(1)c. or G.S. 128-27(b22)(2)c., sub-subdivision 45
(b23)(1)b. or sub -subdivision (b23)(2)c. of this section, 46
notwithstanding the requirement of obtaining age 50, or50. 47
…." 48
SECTION 3.(a) This Part applies to law enforcement officers retiring on or after 49
January 1, 2026. 50
General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 707-First Edition
SECTION 3.(b) Subsections (a) and (d) of Section 1 and subsections (a) and (d) of 1
Section 2 of this Part become effective January 1, 2026. The remainder of this Part is effective 2
when it becomes law. 3
4
PART II. CONFORMING CHANGES 5
SECTION 4.(a) G.S. 143-166.41 reads as rewritten: 6
"§ 143-166.41. Special separation allowance.allowance options for State law enforcement 7
officers. 8
(a) Annual Special Separation Allowance. – Notwithstanding any other provision of law, 9
every sworn law -enforcement officer as defined by G.S. 135-1(11c) or G.S. 143-166.30(a)(4) 10
employed by a State department, agency, or institut ion who qualifies under this section shall 11
receive, receive an annual special separation allowance beginning in the month in which he the 12
officer retires on a basic service retirement under the provisions of G.S. 135-5(a), an annual 13
separation allowance equal to eighty-five hundredths percent (0.85%) of the annual equivalent 14
of the base rate of compensation most recently applicable to him for each year of creditable 15
service. employer. To qualify for the allowance the officer shall: 16
(1) Have (i) completed 30 or more years of creditable service or, (ii) have attained 17
55 years of age and completed five or more years of creditable service; and 18
(2) Not have attained 62 years of age; and 19
(3) Have completed at least five years of continuous service as a law enforcement 20
officer as herein defined immediately preceding a service retirement. Any 21
break in the continuous service required by this subsection because of 22
disability retirement or disability salary continuation benefits shall not 23
adversely affect an officer's q ualification to receive the allowance, provided 24
the officer returns to service within 45 days after the disability benefits cease 25
and is otherwise qualified to receive the allowance.G.S. 135-5(a). 26
… 27
(b) As used in this section, "creditable service" means t he Definitions. – The following 28
definitions apply in this section: 29
(1) Allowance. – The annual special se paration allowance for State law 30
enforcement officers provided for under this section. 31
(2) Creditable service. – The service for which credit is allowed under the 32
retirement system of which the officer is a member, provided that at least fifty 33
percent (50%) of the service is as a law enforcement officer as herein defined 34
or as a probation/parole officer as defined in G.S. 135-1(17a).member. 35
(3) Law enforcement officer. – As defined in either G.S. 135-1 or 36
G.S. 143-166.30(a). 37
(4) Officer. – A law enforcement officer. 38
(5) Probation/parole officer. – As defined in G.S. 135-1. 39
(b1) Eligibility for Allowance. – To be eligible for an allowance under this section , an 40
officer is required to meet all of the following criteria: 41
(1) The officer (i) has completed 25 or more years of creditable service or (ii) is 42
55 years of age or older and has completed five or more years of creditable 43
service. 44
(2) The officer is less than 62 years of age. 45
(3) The officer has completed at least five years of continuous service as a law 46
enforcement officer immediately preceding the officer 's service retirement. 47
Any break in this required contin uous service that is a result of disability 48
retirement or disability salary continuation benefits shall not adversely affect 49
an officer 's qualification to receive an allowance under this subdivision so 50
General Assembly Of North Carolina Session 2025
Senate Bill 707-First Edition Page 7
long as the officer returned to service within 45 days after the disability 1
benefits had ceased and is otherwise qualified to receive the allowance. 2
(4) At least fifty percent (50%) of the officer 's creditable service is as a law 3
enforcement officer, or for service prior to July 1, 2017, as a probation/parole 4
officer. 5
(b2) Allowance Amount. – The amount of the allowance under this section is equal to 6
eighty-five hundredths percent (0.85%) of the annual equivalent of the base rate of compensation 7
most recently applicable to the officer for each year of creditable service. 8
(c) Cessation of Payment. – Payment of the allowance to a retired officer under the 9
provisions of this section shall cease at the first of:occurrence of one of the following: 10
(1) The death of the officer;officer. 11
(2) The last day of the month in which the officer attains 62 years of age; orage. 12
(3) The first day of reemployment by any State department, agency, or institution, 13
except that this subdivision does not apply to an officer returning to State 14
employment in a position exempt from the North Carolina Human Resources 15
Act in an agency other than the agency from which that officer retired. 16
(d) Impact of Other Benefits or Actions. – This section does not affect the benefits to 17
which an individual may be entitled from State, federal, or private retirement systems. The 18
benefits payable under this section shall not be subject to any increases in salary or retirement 19
allowances that may be authorized by the General Assembly for employees of the State or retired 20
employees of the State. 21
(e) Eligibility Determinations. – The head of each State department, agency, or institution 22
shall determine the eligibility of employees for the benefits provided herein.under this section. 23
(f) Transfer of Funds. – The Director of the Budget may authorize from time to time the 24
transfer of funds within the budgets of each State department, agency, or institution necessary to 25
carry out the purposes of this Article. section. These funds shall be taken from those funds 26
appropriated to the department, agency, or institution for salaries and related fringe benefits. 27
(g) Responsibility for Payment. – The head of each State department, agency, or 28
institution shall make the payments set forth in subsection ( a) this section to those persons 29
certified under subsection (e) of this section from funds available under subsection (f).(f) of this 30
section. The allowance shall be paid in equal installments on the payroll frequency used by the 31
employer from which the officer retired." 32
SECTION 4.(b) G.S. 143-166.42 reads as rewritten: 33
"§ 143-166.42. Special separation allowances for local law enforcement officers. 34
(a) Annual Special Separation Allowance. – On and after January 1, 1987, every sworn 35
law enforcement officer as defined by G.S. 128-21(11d) or G.S. 143-166.50(a)(3) employed by 36
a local government employer who qualifies under this section shall receive, receive an annual 37
special separation allowance beginning in the month in which the officer retires on a basic service 38
retirement under the provisions of G.S. 128-27(a), an annual separation allowance equal to 39
eighty-five hundredths percent (0.85%) of the annual equivalent of the base rate of compensation 40
most recently applicable to the officer for each year of creditable service. The allowance shall be 41
paid in equal installments on the payroll frequency used by the employer. G.S. 128-27(a). 42
(a1) Eligibility for Allowance. – To qualify for the allowance, the officer shall:shall meet 43
all of the following criteria: 44
(1) Have The officer has (i) completed 30 25 or more years of creditable service 45
or (ii) have attained is 55 years of age or older and has completed five or more 46
years of creditable service; andservice. 47
(2) Not have attained The officer is less than 62 years of age; andage. 48
(3) Have The officer has completed at least five years of continuous service as a 49
law enforcement officer as herein defined immediately preceding a service 50
retirement. Any break in the this required continuous service required by this 51
General Assembly Of North Carolina Session 2025
Page 8 Senate Bill 707-First Edition
subsection because that is a result of disability retirement or disability salary 1
continuation benefits shall not adversely affect an officer's qualification to 2
receive the allowance, provided the officer returns to service within 45 days 3
after the disability benefits cease and is otherwise qualified to receive the 4
allowance. 5
(4) At least fifty percent (50%) of the officer 's creditable service is as a law 6
enforcement officer. 7
(b) As used in this section, "creditable service" means the service Definitions. – The 8
following definitions apply in this section: 9
(1) Allowance. – The annual special separation allowance for local law 10
enforcement officers provided for under this section. 11
(2) Creditable service. – The service for which credit is allowed under the 12
retirement system of which the officer is a member, provided that at least fifty 13
percent (50%) of the service is as a law enforcement officer as herein 14
defined.member. 15
(3) Law enforcement officer. – As defined in G.S. 128-21 or G.S. 143-166.50(a). 16
(4) Officer. – Law enforcement officer. 17
(b1) Allowance Amount. – The amount of the allowance under this section is equal to 18
eighty-five hundredths percent (0.85%) of the annual equivalent of the base rate of compensation 19
most recently applicable to the officer for each year of creditable service. 20
(c) Cessation of Payment. – Payment of the allowance to a retired officer under the 21
provisions of this section shall cease at the first of:occurrence of any of the following: 22
(1) The death of the officer;officer. 23
(2) The last day of the month in which the officer attains 62 years of age; orage. 24
(3) The first day of reemployment by a local government employer in any 25
capacity.employer, ex cept that this subdivision does not apply to a retired 26
officer returning to local go vernment employment in any of the following 27
circumstances: 28
a. The retired officer is reemployed in service to a county board of 29
elections on an election day or during the hours for early voting under 30
Part 5 of Article 14A of Chapter 163 of the General Statutes in a 31
capacity that complies with G.S. 128-21(19) and does not result in 32
cessation or suspension of the retiree 's benefit from the Local 33
Governmental Employees' Retirement System. 34
b. The retired officer is reemployed in a public safety position in a 35
capacity not requiring participation in the Local Governmental 36
Employees' Retirement System or an equivalent locally sponsored 37
retirement plan. 38
(c1) Notwithstanding the provisions of subdivision (3) of subsection (c) of this section, 39
payments to a retired officer shall not cease when a local government employer employs a retired 40
officer or any of the following: 41
(1) In a public safety position in a capacity not requiring participation in the Local 42
Governmental Employees' Retirement System. 43
(2) In service to a county board of elections on an election day or during the hours 44
for early voting under Part 5 of Article 14A of Chapter 163 of the General 45
Statutes in a capacity that complies with G.S. 128-21(19) and does not result 46
in cessation or suspension of the retiree's benefit from the Local Government 47
Employees' Retirement System. 48
(d) Impact of Other Benefits or Actions. – This section does not affect the benefits to 49
which an individual may be entitled from State, local, federal, or private retirement systems. The 50
benefits payable under this section shall not be subject to any increases in sal ary or retirement 51
General Assembly Of North Carolina Session 2025
Senate Bill 707-First Edition Page 9
allowances that may be authorized by local government employers or for retired employees of 1
local governments. 2
(e) Eligibility Determinations. – The governing body of each local employer shall 3
determine the eligibility of employees for the benefits provided herein.under this section. 4
(f) Responsibility for Payment. – The governing body of each local employer shall make 5
the payments set forth in subsection (a) of this section to those persons certified under subsection 6
(e) of this section from funds available. The allowance shall be paid in equal installments on the 7
payroll frequency used by the employer from which the officer retired." 8
SECTION 4.(c) This section is effective January 1, 2026, and applies to law 9
enforcement officers retiring on or after that date. 10
11
PART III. EFFECTIVE DATE 12
SECTION 5. Except as otherwise provided, this act is effective when it becomes 13
law. 14