House Bill 2066: Special Retirement Allowances
(sponsor – Rep. Angela Bryant)
This bill was summarized in last week’s Legislative Report. The effective date of the provisions allowing state and local government employees who were retired before December 31, 2010 to transfer some or all of any balances in 401(k) or deferred Compensation Plan accounts to the retirement systems to be converted to annuities is July 1, 2011. The effective date for employees retired on or after July 1, 2011 is January 1, 2011. The Board of Trustees for the Retirement Systems will adopt rules for the special retirement allowances in the next several months.
Presently all State and local law enforcement officers are eligible to transfer the entire balance of the Supplemental Retirement Income Plan {401(k) Plan} to either the Teachers’ and State Employees’ Retirement System (TSERS) or the Local Governmental Employees’ Retirement System (LGERS) and receive a life annuity based on their age. This bill allows for the transfer of any portion of the fund balance rather than the entire fund balance. Any State or local officer with five or more years of service as of June 30, 2010 will continue to have this benefit.
The bill also authorizes special retirement allowances for all members of TSERS and LGERS. This will allow all members of the Teachers’ and State Employees’ Retirement System or the Local Governmental Employees’ Retirement System to transfer a portion of their fund balances in either the Supplemental Retirement Income Plan or the Public Employee Deferred Compensation Plan on a onetime election at any time at or after retirement and receive a special retirement allowance. This allowance amount will be based on the amount of funds and age of the member. The Board of Trustees of the Retirement Systems may establish a minimum amount that must be transferred.
The bill awaits final approval by the Governor.
Senate Bill 1392: State Health Plan/ Court-Ordered Guardianships
(sponsor – Sen. Floyd McKissick, Jr.)
The bill amends the definition of “Dependent child” under G.S. 135-45.1(10) to include a child for which an employee or retiree enrolled in the Plan is a court-appointed guardian and who is legally responsible for the child’s maintenance and support. The effect of the bill would be to allow a minor child under a court-ordered guardianship to be eligible for health benefit coverage under the Plan. This is an important change in light of the pending Dependent Verification Process that will be conducted by the State Health Plan in August.
SB 1392 was ratified on July 8 and sent to the Governor. The bill awaits her signature for final approval.
House Bill 589 (S.L. 2010-2): Require Health Benefit Plans and State Health Plans to Cover Hearing Aids
(Primary sponsors – Reps. England, Alexander, Wiley, and Glazier)
This bill was signed into law by Governor Perdue on June 7th. The provisions of the bill become effective on January 1, 2011 and apply to health plans issued or renewed on or after this date. The new law requires all health plans to cover one hearing aid per impaired ear up to a value of $2,500 for dependents up to age 22 every 36 months. This applies to both new and replacement hearing aids.
Senate Bill 1450: State Retirement Age and Service Change
(primary sponsor – Sen. Garrou)
This bill proposed to set a normal retirement age of 60 for state employees and teachers hired on and after January 1, 2011. Employees who retired with 30 years but before reaching age 60 would have their pensions reduced by 5.0% per year of age.
The bill also would change the State Health Plan. State employees and teachers hired on and after January 1, 2011 would pay a portion of the plan’s cost through monthly premiums.
This bill remained in committee at the end of the session. Generally, the bill was viewed as setting the stage for a debate that will begin in 2011 about health and retirement benefits for future teachers and state employees.
House Bill 2037: State Health Plan – Transfer to Dept. of Insurance
(primary sponsors – Reps. Dollar, Blackwell, and Hurley)
The bill proposed to transfer governance and oversight of the State Health Plan from the General assembly to the state Department of Insurance. The bill remained in the House committee on Insurance at the end of the session.
This is the last regular weekly Legislative report for this year. However, we will send periodic reports as needed during the next several months. We will monitor actions of the U.S. Congress that might allow the state to transfer appropriations now held in reserve to the Teachers’ and State Employees’ Retirement System. In all likelihood, any Congressional action will come through a “lame duck” session following the November general elections.
BILLS APPROVED IN 2010 
STAY TUNED!