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 creditable retirement 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 creditable retirement 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 creditable retirement service.
For detailed information about TSERS, including full (or unreduced) and reduced retirement benefits, death benefits, survivor benefits, please see the TSERS Handbook.
Resources
- Retirement System homepage
- Choosing a Retirement Program (for employees eligible for TSERS or ORP)
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 control your investment choices, distribution methods and retirement goals, whereas the State controls the investments under TSERS. TIAA offers investment products under the ORP. Visit the TIAA website to explore the choices and to find more information.
Contact a member of our Benefits Team:
Benefits Consultant |
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Benefits Consultant | 828-262-7872 | ||
Director of Benefits | 828-262-6485 |