Retirement

Participation in a retirement plan is mandatory for permanent employees working 75% time (30 hours) or more. (Employees working less than 75% time cannot participate.) Employees must contribute 6% of salary, deducted prior to Federal and State income taxes, to the retirement plan and are vested after five years of participation. (Note: Employees may contribute more than 6% for retirement through a Supplemental Retirement program)

The two retirement programs available to APPSTATE employees are:

Teachers and State Employees Retirement Plan (TSERS)

Eligibility

Available to permanent employees working 30 hours or more per week. Employees contribute 6% of salary per month.

TSERS is a defined benefit plan. With a Defined Benefit Plan, benefits are based on salary, years of service and a retirement factor. The retirement benefit is not based on the amount of contributions nor the investment earnings. There is no investment risk for the individual since the state takes on the risk and guarantees the retirement benefit. TSERS is not "portable" except to other North Carolina state agencies, including the 16 constituent institutions of the UNC System, NC Community Colleges, and NC Public Schools.

Vesting

Employees must complete 5 years of membership service (5 years of contributing to TSERS) to be fully vested in their retirement benefits.

Benefit

The retirement benefit for a defined benefit plan is based on a formula and not on the amount you or the state contribute. The formula for TSERS is determined by state statute and is:

  • Average salary based on the highest 48 consecutive months of earnings
  • Multiplied by a Retirement Factor of 1.82%
  • Multiplied by your creditable years of service

The University contributes an amount set by the state legislature each year which funds the:

  • Retirement benefit
  • Retirees' Health Care plan
  • Disability Income benefit
  • Death benefit

The University contribution to TSERS is not a match to your contribution, it can change each year and does not go into the same account as your 6% contribution.

Qualification for full or reduced benefits

You qualify for full (or unreduced) retirement benefits with:

  • 30 years of creditable service at any age or
  • 25 years of service and age 60 or
  • 5 years of service and age 65

You qualify for a reduced retirement benefit with:

  • 20 years of service and age 50 or
  • 5 years of service and age 60

Options at termination of employment

Options at termination of employment differ depending on whether or not you are vested:

Less than 5 Years of Service (Not Vested):

  • You can withdraw your contributions as a lump sum or as a direct rollover to an IRA. By withdrawing your funds, you lose your contributory years of service.
  • If you expect to be employed by the State of North Carolina in the future, you can leave your contributions in the plan. You do not lose your contributory years of service.

More than 5 Years of Service (Vested):

  • You can leave your contributions in the plan. When you are eligible for and begin receiving a monthly retirement benefit from the plan you may be eligible for the retiree health insurance.
  • You can withdraw your contributions plus interest as a lump sum or as a direct rollover to an IRA. By withdrawing your funds you forfeit your rights to retiree health insurance. You also lose your contributory years of service.

For detailed information about TSERS, including full (or unreduced) and reduced retirement benefits, death benefits, survivor benefits, please see the TSERS Handbook.

Resources

Optional Retirement Program (ORP)

Eligibility

Available to permanent employees working 30 hours or more per week. Employees contribute 6% of salary per month.

The ORP is a defined contribution plan. With a Defined Contribution Plan, retirement benefits are based on the accumulation (your contributions, the university contributions and the interest and dividends earned) and your age at the time you begin the benefit. Since you select the investment vehicle(s) for the contributions you assume the investment risk for your retirement plan. See Choosing a Retirement Program.

Benefit

The annual retirement benefit for the Optional Retirement Program (ORP) is based on:

  • Your final accumulation in the plan (contributions, investment and dividend earnings)
  • The method of payment you elect at the time of retirement.

The University contributes an amount set by the state legislature each year that funds:

  • Your retirement account with the ORP carrier
  • Retirees' Health Care Plan
  • Disability Income benefit

University contribution:

  • 6.84% to your retirement account with the ORP carrier
  • Retiree Health Plan
  • Disability Income Plan

Carriers

Under the ORP, you have a number of choices to make regarding your retirement fund. First, you must choose from the two carriers, and then you must select from the different investment funds to meet your investment objectives and goals. The two carriers are:

You may elect to allocate both your and the university's contributions to one carrier or you may allocate your contributions to one carrier and the University's contributions to another carrier. You can change which carrier either of the contributions go to at anytime.