Law Enforcement Officers (LEO) Retirement Plans

Law Enforcement Officers (LEO) in a permanent, probationary, or time-limited position working at least 30 hours or more per week may participate in either the Teachers’ and State Employees’ Retirement System (TSERS) or the Optional Retirement Program (ORP). Upon initial eligibility, all LEO are given up to 30 calendar days to make their mandatory retirement election.  Once enrolled, the mandatory retirement election cannot be changed.  Refer to the Mandatory Retirement Decision Guide and the Retirement Comparison Tool for additional details.

Note: Failure to select a mandatory retirement plan within the first 30 days of eligibility will result in automatic enrollment into the TSERS plan.

LEO are entitled to additional benefits, including earlier un-reduced retirement benefits, participation in the State 401(k), and additional death benefits.

 

 

Teachers’ and State Employees’ Retirement System (TSERS) for Law Enforcement Officers (LEO)

The Teachers’ and State Employees’ Retirement System (TSERS) for Law Enforcement Officers (LEO) is sponsored by the State of North Carolina and governed by the Department of the State Treasurer.

TSERS is a defined benefit plan. Under this type of plan the benefit an employee receives at retirement is based on total years of creditable service, age, and “average final compensation,” which is the employee’s four highest paid consecutive salary years.

Neither the investment experience of the plan assets nor the amount contributed, directly determines the amount of the guaranteed benefit an employee will receive at retirement.

 

Vesting

An employee becomes vested in TSERS once he or she has completed a minimum of 5 years of membership service. This means that an employee is eligible to apply for lifetime monthly retirement benefits based on the retirement formula in effect at the time of their retirement and the age and service requirements described below, provided the employee’s contributions are not withdrawn.

Service Retirement (Unreduced Benefits)

LEO may retire with an unreduced service retirement benefit after:

    • Reaching age 55 and completing 5 years of creditable service as an officer
    • Completing 30 years of creditable service at any age

Early Retirement (Reduced Benefits)

LEO may retire early with a reduced retirement benefit after:

    • Reaching age 50 and complete 15 years of creditable service as an officer
    • Completing 25 years of creditable service and complete 15 years as an officer (effective July 1, 2019)

 

Active Employee Death Benefits

Death Benefit: If an employee dies while still in active service after one year as a contributing member, the employee’s beneficiary will receive a lump-sum payment equal to the employee’s highest salary for 12 consecutive months during the 24 months prior to death. The lump-sum payment will be at least $25,000 but no more than $50,000.  This benefit is also paid if an employee dies within 180 days of their last day of service provided, he or she has not withdrawn their contributions. The death benefit is in addition to any other benefits to which an employee’s beneficiary(ies) may be entitled. For this death benefit, an employee may name the same or a different beneficiary(ies) than the one(s) named to receive the return of contributions. If an employee who is a public safety worker is killed in the line of duty, their beneficiary may also be entitled to a $100,000 line-of-duty death benefit. This lump-sum benefit is administered jointly by the North Carolina Industrial Commission and the Department of State Treasurer.

Return of Contributions: After death, an employee’s beneficiary(ies) can receive a return of the employee’s contributions plus interest at four percent compounded annually on prior year ending balance, through date of death. This is a lump-sum payment. If certain eligibility requirements are met, a monthly Survivor’s Alternate Benefit may be paid to the beneficiary instead of a return of contributions if only one eligible beneficiary is living at the time of death.

Survivor Alternate Benefit: Provided an employee has not retired, the monthly Survivor’s Alternate Benefit may be payable if an employee has only one eligible beneficiary for the return of your contributions living at the time death and dies while in active service or within 180 days of their last day of service after meeting one of the following conditions:

  • Completes 20 years of creditable service (not including credit for unused sick leave) regardless of age. You reach age 50 with 15 years of creditable service as a law enforcement officer.
  • Reaches age 55 with 5 years of creditable service as an officer.
  • Completes 15 years of creditable service as an officer if killed in the line of duty.

If an employee does not meet one of these two conditions, their beneficiary(ies) will be able to receive only a return of the employee’s contributions.

The Survivor’s Alternate Benefit does not apply if an employee has two or more eligible principal beneficiaries for the return of contributions living at the time of death, if their estate or living trust is their eligible beneficiary at the time of death, or if the employee has retired.

This lifetime monthly benefit payable to the employee’s beneficiary equals the amount the employee would have been entitled to receive under Option 2 of the retirement benefit selection had he or she survived and retired on the first of the month following death.

 

Using Sick Leave Towards Retirement Credit

Employees enrolled in the TSERS retirement plan are allowed one month of credit for every 20 days of unused sick leave, which can serve as creditable service towards retirement eligibility. For any part of 20 days left over, one additional month is allowed provided the remaining portion is at least one hour. However, in order to use sick leave towards retirement credit, an employee’s last day of service with their TSERS employer must be within 5 years before the employee’s effective retirement date.

 

Accessing Your Retirement Account Through ORBIT

The North Carolina Department of State Treasurer created ORBIT to allow members enrolled in TSERS convenient access to their retirement account information 24 hours a day, seven days a week. This site enables employees enrolled to view their personal information, account information, and other relevant details specific to their retirement system account.

In ORBIT, active employees are able to:

  • Retire online
  • View contribution history
  • View service credit history
  • View retirement estimates
  • Designate beneficiaries
  • View service purchase cost estimates
  • View NC 401(k)/NC 457 Plan Transfer Benefit estimates
  • View myNCRetirement Statements

To access ORBIT, visit https://orbit.myncretirement.com/, click on the ORBIT icon and follow the instructions to log in to your personal ORBIT account.

  1. Register for ORBIT via the Register button on the login page
  2. Follow the prompts for registration
  3. Access ORBIT using the User ID and Password that you created

 

Applying for Retirement While Actively Employed

Employees approaching retirement should review the Retirement Planning Guide and Retirement Planning 101. It is recommended that employees contact their HR Benefits Consultant to schedule an appointment to complete the appropriate documents to begin the retirement process approximately 90-120 days in advance of their effective retirement date.

An effective retirement date must be the 1st of a month.  Employees can submit their retirement application online through their ORBIT account up to 120 days before their planned retirement date. The application for claiming a monthly retirement benefit must be submitted and filed with the Retirement System at least one day but not more than 120 days in advance of an effective retirement date. For more information about the Online Retirement Process, click here.

How to apply for retirement online under the Teachers’ and State Employees’ Retirement System (TSERS)

 

Return to Work Laws

Over time, the North Carolina General Assembly has enacted, and amended, laws governing the return to work for all retirees of the North Carolina Retirement Systems.

Return-to-work laws apply differently to members of the Local Governmental Employees’ Retirement System (LGERS) and the Teachers’ and State Employees’ Retirement System (TSERS), so before you decide to return to work for an employer under the Retirement System from which you retired, you should familiarize yourself with the laws governing return-to-work. Retirees are responsible for knowing and abiding by the return-to-work laws that apply to their particular situation.

Violation of the return-to-work laws could cause a retiree to incur financial penalties, possible loss of retirement benefits and/or possible loss of health coverage.

Refer to the TSERS LEO Retirement Handbook, My NC Retirement, and State Health Plan Retiree Benefits for additional details.

 

Optional Retirement Program (ORP)

The University of North Carolina Optional Retirement Program (ORP) is an option or alternative to the North Carolina Teachers’ and State Employees’ Retirement System (TSERS) for faculty and staff. Under the ORP, an employee controls their investment choices, distribution methods, and retirement goals, whereas the State controls the investments under TSERS. For information about the Optional Retirement Plan, refer to the Optional Retirement Program.

How to apply for retirement under the Optional Retirement Plan

 

Retiree Health Insurance

Under TSERS, an employee may be eligible to continue health insurance under the North Carolina State Health Plan when retiring and electing to begin their monthly retirement benefit. The cost, if any, is determined by two factors: (1) when state employment began, and (2) which health plan is selected.

If an employee was first hired prior to October 1, 2006, and retires with 5 or more years of contributory retirement service, the employee will be eligible for health care coverage at no cost, under certain plan options.

If an employee was first hired on or after October 1, 2006, in order to receive health care coverage at no cost, the employee must retire with 20 years of retirement service credit. If an employee has at least 10 but less than 20 years of retirement service credit, the employee is eligible for coverage but will pay 50% of the cost of coverage. If an employee has at least 5 years of contributory retirement service, but less than 10 years of retirement service credit, the employee is eligible for coverage but will pay 100% of the cost of coverage.

In all cases, retirees must pay the full cost of dependent coverage.

If an employee withdraws, transfers, or rolls over their TSERS contributions to an IRA or another employer’s retirement plan, the employee will forfeit their right to the State’s retiree group health plan coverage.

Employees hired on or after January 1, 2021 will not be eligible to receive retiree medical benefits.

All new retirees who are eligible for State Health Plan coverage will be automatically enrolled into a plan at the time of retirement even if a member did not have Plan coverage as an active employee. If eligible, retiree health coverage begins on the first day of the month following the effective date of retirement. For example, if an employee has an effective date of retirement of January 1, his or her coverage in the retiree group plan will begin on February 1.

IMPORTANT: When an employee (or their covered dependents) becomes eligible for Medicare upon retirement, the employee must elect both Part A (Hospital) and B (Medical) in order to maintain the same level of coverage received prior to retirement.

For additional details about Retiree Health coverage and benefit options at retirement, refer to State Health Plan Retiree Benefits and Planning for Retirement.

 

NC 401(k) Plan

Sworn LEO are automatically enrolled in the NC 401(k) Plan.  ECU pays 5% of the sworn LEO salary to the NC 401(k) plan and the sworn LEO may elect to make additional contributions.

The sworn LEO can decide how the contributions in their account are invested and how he or she wants to receive the contributions once separated from employment.

The sworn LEO, may, at retirement, elect to transfer eligible contributions, not including any Roth after-tax contributions, from the NC 401(k) Plan to the TSERS and be paid an additional monthly benefit from TSERS based on the transferred balance.

The Retirement System has hired Empower Retirement (formerly Prudential Retirement) to administer the NC 401(k) Plan and they can give you further details about the plan.

 

Separate Insurance Benefits Plan

The Separate Insurance Benefits Plan provides certain death benefits to qualified active and retired sworn law enforcement officer participants above and beyond the death benefits available to other state employees.

Sworn LEO are eligible to become a participant on their date of hire if he or she is employed by the State or any political subdivision of the State and:

  • have the full power of arrest with the primary duty of enforcing criminal laws,
  • are charged with the detection and prevention of crime, or
  • serve civil processes.

The benefits under the plan are:

  • a death benefit of $5,000 for sworn LEO in active service (while being paid salary), the amount is increased by $2,100 if death is line-of-duty related
  • a death benefit of $4,000 for sworn LEO who are eligible former officers

Payments due to death will be payable to the surviving spouse, if any, or otherwise to the estate of the participant unless the participant had designated, in writing, since January 1, 1986, another person or persons as beneficiary(ies) and had filed this designation with the Retirement System.

When an employee is no longer a sworn LEO, participation in the plan ends unless the LEO:

  • has 20 or more years of service as a sworn LEO or
  • is receiving disability retirement benefits from any state-administered retirement system.

Neither you nor ECU pay towards this plan for benefits

 

Special Separation Allowance

Sworn LEO who are retiring may be eligible for the Special Separation Allowance that is payable until they reach age 62, until they return to any employment with State Government, or death.  Other conditions may apply.

To be eligible for the Special Separation Allowance you must meet the following criteria:

  • completed 30 or more years of creditable service,
  • have attained 55 years of age and completed five or more years of creditable service and not have attained 62 years of age, or
  • have completed at least five years of continuous service as a law enforcement officer as herein defined immediately preceding a service retirement. Any break in the continuous service required by this subsection because of disability retirement or disability salary continuation benefits shall not adversely affect an officer’s qualification to receive the allowance, provided the officer returns to service within 45 days after the disability benefits cease and is otherwise qualified to receive the allowance.

The Special Separation Allowance amount is based on your annual salary and years of service (time worked and unused sick leave).  ECU is responsible for making all determinations of eligibility and for making these benefit payments when they become payable, please contact the Retirement Team with any questions.