Staff
Retirement Plan
The Teachers’ and State Employees’ Retirement System
(TSERS)
A
Defined Benefit Pension Plan
A Brief Overview
Each
member of the faculty and staff must participate in a North Carolina
Retirement Plan. All participants
contribute 6% of gross pay (deducted before taxes).
Benefits “vest” (become non-forfeitable) after completing five
years of contributing service. Being
“vested” means you are entitled to receive a retirement benefit when you
reach one of the age/service combinations listed below.
Meanwhile, your 6% pre-tax contribution is always your own property.
The amount the University is contributing is not deposited into an
individual account, but it is deposited into a Trust fund that will eventually
pay your pension benefit providing you complete five years of service.
In the case of nine-month faculty and staff, a “year” is defined as
the academic year. In the case of
twelve-month faculty and staff, a year is defined as twelve months.
If you are a staff person, whether subject (SPA) or
exempt (EPA) from the State Personnel Act, you will enroll in the Teachers’
and State Employees’ Retirement System by completing the
enrollment form inside this wrapper.
TSERS is a Defined
Benefit Plan. This
means the benefit at the end of your career will be determined by a
formula (see back cover for a retirement illustration) based on:
+ your age at
retirement
+ your years of
service
+ the highest 4
consecutive years
of salary
+ the retirement
multiplier set by the State legislature (currently 1.81% - 7/01/2000)
Retirement Age
and Service Combinations
Employees with
the following combination of age & service are eligible for a “normal”
retirement benefit.
|
Normal Retirement Age/Service Combinations
|
|
Retirement
Age
|
Age
65
|
Age
60
|
Any
Age
|
|
Years
of Service
|
5
years
|
25
years
|
30
years
|
Early
retirements are available; however, the monthly pension benefit is reduced
because it must be paid over a longer period.
|
Early Retirement Age/Service Combinations
|
|
Retirement
Age
|
Age
50
|
Age
60
|
|
Years
of Service
|
20
years
|
5
years
|
Death Benefit
There is an automatic death benefit for TSERS
participants, who have completed one year of service. This benefit is provided at no cost to the employee.
If you die while in active service, your beneficiary(ies) will receive a
lump sum payment of one (1) times your annual salary, not to be less than
$25,000, nor more than $50,000.
So
. . .
If
you earn $30,000
º
your beneficiary will receive $30,000.
If
you earn $24,000
º
your beneficiary will receive $25,000.
If
you earn $60,000
º
your beneficiary will receive $50,000.
Enrollment
To enroll in this Plan, you will need to
complete the “Notice of Enrollment”
included inside this wrapper. If you do not attend a Benefits Orientation,
please be sure to read the detailed enrollment instructions on the reverse of
“Notice of Enrollment” form. If
you have not supplied a copy of your social security card when you completed
your payroll information, you will need to do so when enrolling in a retirement
system. Please return your
completed form to the Benefits Office, Rm. 225, King Bldg.
Keeping Your Beneficiaries Up-to-Date
The return of contributions and the death benefit
will be paid to the beneficiaries you name on the enrollment form.
It is important to keep this information up-to-date because these
benefits will pass to whomever you name on the form even if your will says
otherwise.
Should you wish to change beneficiaries, please visit
the Benefits Office and complete a Change of Beneficiary form.
This form may also be used to change your name in the event you marry or
divorce.
Other Post-Retirement Benefits
Besides a pension, the State of North Carolina also
provides the contribution towards the standard state health insurance plan to
retirees with at least five years of service.
You may choose either the Standard State of North Carolina Comprehensive
Major Medical Plan or any Health Maintenance Organization offered at that time.
The State Health Plan retiree only coverage would be without any
additional cost to the retiree. The
retiree may also choose Health Maintenance Organization coverage and pay the
additional premium or add dependent coverage by paying the additional premium.
If you retire prior to age 65, your state-sponsored
health plan will remain your primary health plan. Once you are both age 65 and retired, you will be eligible
for Medicare Part A and B benefits, and your State of North Carolina sponsored
plan will be secondary to Medicare.
A Normal Retirement Illustration
Let’s assume Robin has 32 years and 2 months of
creditable service at retirement.
Step 1
Add the salary of the four highest-paid
$ 30,600
years in a row
31,700
32,900
34,000
$ 129,200
Step 2
Divide Step 1 by four to get average
compensation
$
32,300
Step 3
Multiply Step 2 by 1.81% to apply
$ 32,300
formula as determined by State Assembly
x.0181
$ 584.63
Step 4
Determine Creditable Service
32.20
years
(Years of Service + Unused Sick Leave)
Step 5
Multiply Steps 3 and 4
$ 584.63
x32.20
Annual Total
$ 18,825.08
Step 6
Divide Step 5 by 12 to get monthly
$ 1,568.75
maximum payment
Robin has over
30 years of service, so age is not a factor in this illustration.
If Robin had fewer years of creditable service, age would figure into the
equation.
For example, if Robin had only 24 years of creditable
service including unused sick leave and was age 60 at retirement, TSERS would
apply a reduction percentage of 85%.
Maximum Monthly Benefit
at “Normal” Retirement
$ 1,568.75
Multiplied by reduction factor
x .85
Reduced “Early” Retirement
$ 1,333.44
Monthly Benefit
This information is intended for highlight purposes
only. Please refer to The
Teachers’ and State Employees’ Your Retirement Benefits’ booklet for a
more complete discussion of TSERS benefits or visit the TSERS website at:
http://www.nctreasurer.com/dsthome
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