Teachers' and State Employees' Retirement System (TSERS)
The Teachers' and State Employees' Retirement System (TSERS) accepts State of North Carolina employees who are:
- a permanent full-time teacher or employee of a board of education or community college that is supported by the State of NC;
- a permanent employee of the State of NC (or any of its agencies, departments, bureaus, or institutions - including NC State) ; or
- a permanent employee of a charter school whose board has elected to participate in the Retirement System.
Employees become members of the TSERS on the date of hire. (There is no application form to complete.) The employee must work at least 30 hours per week for 9 months per year.
Faculty members or administrators at an institution of higher education in the State of NC (such as NC State) may join an optional retirement program, instead of the TSERS.
Agricultural Extension Service employees and members of the Federal Employees' Retirement System may not join the TSERS.
How Do I Enroll?
Eligible SPA employees are automatically enrolled into the TSERS plan upon hire. Eligible EPA new hires may choose TSERS by completing a TSERS election form. The State Retirement System will send out a welcome packet along with a beneficiary election form upon TSERS enrollment. Beneficiaries can be changed at any time by completing a "Notice of Change of Beneficiary"
How Are Contributions Made?
Employees share in the cost of providing retirement benefits. The employee's share is a set percent of salary and is automatically deducted from each paycheck. Salary includes all wages paid, from public funds, which are earned on the covered job while working for the State. On and after July 1, 1982, your contributions to the Retirement System are tax-sheltered for federal and State income tax purposes. The State bases its contributions on calculations prepared by an actuary. The total contributions and investment earnings provide retirement benefits.
When Do I Become Vested?
An employee is considered fully vested after 5 years of membership service. Once vested, an employee who meets the defined age and years of service requirements is eligible to apply for lifetime monthly retirement benefits based on the benefit calculation formula. Although employees who participate in TSERS are immediately 100% vested in their own contributions, contributions are only available for withdrawal and/or rollover to a qualified plan if the employee separates from service or no longer meets participation eligibility requirements. Because of the TSERS plan design and guidelines, employer contributions not available for withdrawal and/or rollover at any time.
While vesting for TSERS is five years. However, the vesting period for the retiree health insurance benefit has changed. Under current law, if you were first hired prior to October 1, 2006, and retire with five or more years of State System membership service, the State will pay either all or most of the cost, depending on the plan chosen, for your individual coverage under one of the Preferred Provider Organization (PPO) plans. Based on the conditions described above, 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% of the cost for your coverage, and with five but less than 10 years, you will have to pay the full cost for your coverage. In all cases, the full cost of dependent coverage, if elected, must be paid by you.
When Do I Become Eligible for Retirement?
Retirement eligibility is based on age and years of total creditable service. Creditable service means any period of time during which contributions were made to the System (membership service), provided contributions were not withdrawn. Creditable service may also include service credit from another employer or state, credit granted for military service, parental leave, disability, workers' compensation, part-time or temporary employment, purchased service from previously withdrawn accounts, etc. TSERS participants may apply for full retirement benefits at age 65 with at least 5 years of membership service, at age 60 with at least 25 years of creditable service or with 30 years of creditable service at any age. Participants may apply for reduced retirement benefits at age 50 with at least 20 years of creditable service or at age 60 with at least 5 years of membership service.
Employees who submit application for retirement will have to sign the following statement:
“I understand that by completing an application for retirement and associated paperwork that I am submitting my intent to retire from North Carolina State University.”
This notice will be shared with your department at the time you complete the application or no later than 30 days prior to the effective date of your retirement. Upon receiving such notice, your department will confirm your intent to retire and make arrangements with you concerning submission of your resignation. Once your resignation is accepted, please be aware that your position may no longer be available even if you subsequently decide not to retire.
A retiring employee should attend a Ready, Set, Retire session for instructions on completing the retirement process and how Social Security and Medicare work in conjunction with the Retiree Health Plan.
Review the NC State Retirement Guides for helpful information you will need when you retire from the University.
Disability Retirement - Under specific circumstances, employees who earned 5 or more years of membership service with TSERS prior to July 1, 1 982 or January 1, 1988 may be eligible to receive disability retirement benefits. For more information, contact your Benefits Consultant.
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 SPA 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 ).
What Are My Retirement Payment Options?
Several options for lifetime benefits are available to the member and beneficiary in the event of the retiree's death. All retirement options provided for a return of any unused retirement contributions to designated beneficiaries. Cost of living increases may be granted periodically after retirement.
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.
Are There Any Additional Benefits?
TSERS participants are eligible for benefits under the North Carolina Disability Income Plan (DIPNC).
- Voluntary supplemental benefit plans are available for both short-term and long-term disability coverage; premiums are payroll deducted.
- State Health Plan coverage continues for retirees and covered dependents as if actively employed; dependent premiums are deducted from monthly retirement payments.
Who is my Benefits Consultant?
