The Teachers’ and State Employees’ Retirement System (TSERS) is a defined benefit plan (pension plan). The plan provides a defined retirement benefit based on a calculation of participation time, salary and a retirement factor at retirement.
Eligibility
Eligible staff (SHRA hired on or after January 1, 2013) OR eligible faculty/non-faculty (EHRA) employees who are non-temp employees who work at least 30 hours/week (.75 FTE) for 9 months or more per year on a recurring basis may choose this plan or the Optional Retirement Program (ORP) for their mandatory retirement plan with a 6% contribution.
How Do I Enroll?
Eligible SHRA/EHRA new hires may choose TSERS by completing a TSERS election form. Eligible SHRA/EHRA new hires have 60 days from their hire date to decide on a mandatory retirement of either TSERS or the Optional Retirement Program (ORP). If no decision is made, the new hire is defaulted to the TSERS plan.
The State Retirement System encourages all newly hired employees to log onto their ORBIT system to make their beneficiary elections. Access the State Retirement Systems’ ORBIT retirement online system at www.myncretirement.com. Click on ORBIT and then select “Register” if this is your first time logging in to this System and follow the instructions. Please note that beneficiaries can be changed at any time.
How Are Contributions Made?
Employees share in the cost of providing retirement benefits. The employee’s share is a set percent of salary (6%) 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 taken on a pre-tax basis 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?
You become vested once you have completed a minimum of five years of retirement service credit with the Retirement System. This means that you are eligible to apply for lifetime monthly retirement benefits based on the retirement formula, and the age and service requirements of the Retirement System in which you participate, provided you do not withdraw your contributions.
To view your TSERS account, access the State Retirement Systems’ ORBIT retirement online system at www.myncretirement.com. Click on ORBIT and then select “Register” if this is your first time logging in to this System and follow the instructions.
When Do I Become Eligible for Retirement?
You may retire with an unreduced service retirement benefit after:
- you reach age 65 and complete five years of creditable service,
- you reach age 60 and complete 25 years of creditable service, or
- you complete 30 years of creditable service, at any age.
You may retire early with a reduced retirement benefit after:
- you reach age 50 and complete 20 years of creditable service, or
- you reach age 60 and complete five years of creditable service.
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 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).
Retiree Health Insurance
Under current law, if you were first hired prior to 10/1/06, and retire with five or more years of TSERS membership service, the State will pay for your individual premium under the Preferred Provider Organization (PPO) 70/30 plan. If you elect the 80/20 plan, there is a cost for this plan.
Based on the conditions described above, if you were first hired on or after 10/1/06, 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.
NOTE: Members hired on or after January 1, 2021, are not eligible to receive retiree medical benefits.
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.
When Should I Notify My Department of My Intent to Retire
Once an employee decides to retire and meets the eligibility requirements for monthly benefits, there are certain steps which must be taken to begin the retirement process.
Monthly retirement benefits are effective the first day of any month; however, a retirement application should be signed, dated, and filed approximately 90 to 120 days before the planned retirement date to avoid any delays with retiree benefits.
Notify your supervisor in writing of your intent to retire. Because retirees generally have been in their positions for an extended period and often have vast institutional knowledge, we encourage you to make this notice as soon as possible but no later than 30 days before your retirement date. Send a copy of this letter to the Office of Human Resources located at 108 Phillips Hall, CPO #1450.
Once the resignation is accepted, be aware that the position may no longer be available even if the employee subsequently decides not to retire.
Teacher’s and State Employee’s Retirement System Checklist (TSERS)
Guiding Policies and Other Resources
UNC System
State Retirement System
UNC Asheville Human Resources Disclaimer
While we make every effort to present this information accurately, this is just a summary overview. That means lots of details, explanations, and qualifiers are left out. It is intended only to provide general guidance, and you should not rely on it as a complete or binding explanation of this topic. If this information differs from the language or intent of the formal published legal or policy requirements, that authoritative information prevails.
Benefits Team
Office of Human Resources
108 Phillips Hall
Asheville, NC 28804
Phone: 828-251-6605
Fax: 828-251-6385
Email: HR@unca.edu