North Carolina pension system strong ?

[LEOfemaleV22]

Current LEO in a southern state that does not have pensions state wide for police . With almost 5 years experience and still being under 30 My eyes are still open to see what’s out there .

currently interested in wake county area at this time . but still want to know if I make the move will the pension likely still be alive and thriving ?!

thanks in advance

[jnhdrac]

The NC pension system is generally considered one of the more secure public pension systems. The funding levels has decreased in the last few years, but it remains better than most similar systems.

[jnhdrac]

If you have not done so, read my NC Retirement post for. some more understanding of retirement in NC.

[LEOfemaleV22]

Thank you I will take a look

[Aidokea]

Current LEO in a southern state that does not have pensions state wide for police .

Holy $#it...

Move...

[NYtoNC]

Plus don’t forget about the “supplemental separation allowance” payments that most departments have.

[jnhdrac]

To follow up on NYtoNC's post, there is the "special separation allowance ", as well as the 401k which the state refers to as the supplement. The 401k is a 5% contribution from the employer and is not a match. You can contribute more. The separation allowance requires retirement at full benefits, at least 20years service as a police officer, and the final20 years must be as a police officer. Separation allowance ends when you turn 62.

[NYtoNC]

Each agency sets their own rules, but here is Cary’s plan:

ELIGIBILITY - To qualify for payment of the special separation allowance, a retiring law enforcement officer must have (a) 30 or more years of creditable service with the North Carolina Local Law Enforcement Officers Retirement System or (b) have attained 55 years of age with at least 5 years of creditable service and all of the following:

• At least 5 years of continuous service as a sworn law enforcement officer immediately preceding retirement. Any break in the continuous service required because of disability retirement or disability salary continuation benefits shall not adversely affect an officer’s qualification to receive the allowance provided the officer returns to service within 45 days after the disability benefits cease and is otherwise qualified to receive the allowance; and
• Served at least 50% of the creditable service as a sworn law enforcement officer; and
• Not attained the age of 62

I will be testing the 5 years and age 55 option. I can’t find anywhere that reads that it’s a reduced pension at this amount of time and age either.

[jnhdrac]

I went back and read the statute and I appear to be wrong about the 20 years, it does appear that if you retire at full benefits you qualify for the separation allowance. The rules for the separation allowance are set by statute, not the employer. Conceivably an employer could be more generous than required, but I have never heard of that happening.

Age 55 with 5 years is an unproduced pension, but will only have years in the formula .

[jnhdrac]

I meant unreduced in the above.

[NYtoNC]

It’s confusing how you can do 5 years and get the same pension as someone who did 30. They even told me I could retire at age 50 and only having 5 years, and the pension would kick in at age 55. I have to dig deeper into the separation allowance.

[jnhdrac]

You do not get the same pension. The pension is calculated using a formula that includes years. If you retire at 55 with 5 years you will get 1/6 of the pension that somebody who otherwise was the same final salary figure, but did 30 years. There is no penalty for 5 years and 55, but it is still just 5 years.

If you take some form of early retirement they apply a penalty to the final pension figure, thus the term reduced benefit.

Your actual years will always be a factor in the formula. Someone who does 5 years and is 55 still only has 5 years.

[jnhdrac]

You are correct that if you complete 5 or more years so that you are vested, but then leave employment prior to 30 years or age 55 and do not withdraw your funds, you would be eligible for a pension when you turn 55. Your retirement date would be when you turned 55, not when you left employment. That means you would not have 5 years of continuous service as a police officer in the 5 years preceding retirement.

If you have not read it already here is a link to the special separation allowance statute.

https://www.google.com/url?sa=t&sour...AFlK6nkKaeQ2zu

[Wheats13]

Has anyone here been contributed to a pension in another state and rolled it over to the North Carolina Local Law Enforcement Officers Retirement System? With my pension only currently funded at 44% and the recent passage of legislation that when signed by the governor will drastically change how we do law enforcement, I'm looking elsewhere.

[NYtoNC]

I tried to research this recently. It’s about $5,000 per year, so it’s a lot of money. There is an online calculator, but you can’t use it unless you have 5 years or more in the North Carolina retirement system.