You will have to make a variety of choices during your career in public service, and a state Employees’ Retirement System handbook can assist you in doing so. You may learn about the qualifying requirements, perks, and helpful advice on optimizing your retirement benefits from the state employee retirement web site. You can always contact the state Employees Retirement System office for personalized assistance. Additionally, you can ask for private sessions with a knowledgeable retirement counselor.
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Cost Of Living Adjustments
For retirees who begin receiving benefits from the SERS, the cost of living adjustment (COLA) will be based on 50 percent of the Consumer Price Index (CPI). The amount of the COLA will be applied to the first $18,000 of your pension. Therefore, if you retire sooner than 12 months, the cost of living adjustment may not be applicable. In addition, if you have less than ten years of creditable service, you must wait until you reach the normal retirement age before the COLA begins.
Mandatory participation in a state employee retirement plan (SERP) is required for employees who work one-half or more hours per week. The plan is designed to provide monthly contributions to an employee’s retirement account for the remainder of their career. Under the law, participating employers must provide employees with information about this option.To participate in an ERS plan, employees must complete enrollment forms, designate beneficiaries, and select investment options. Mandatory participation in a state employee retirement plan benefits employees and the state. However, the process can be complex, and it cannot be very clear for new participants.
Severance Pay Alternatives
A written severance plan allows employers to determine how much severance an employee can expect for specific events. It also allows the plan administrator to defer the review of eligibility decisions to a higher authority. Severance benefits are paid upon termination of employment for a specified number of weeks following the date of separation. The weekly benefit rate is reduced by the amount of severance pay and the claimant’s regular full-time wage. If you have vested rights and would like to receive your benefits, contact the last employing agency’s human resources office and request an application. Request an application as early as possible, ideally at the time of termination or shortly after.
Early Retirement Options
The standard age for early retirement is at least five years before your expected retirement date. In some states, state employees can retire earlier if they have completed twenty years of creditable service. However, you cannot receive a retirement benefit early if you have fewer than twenty years of service. You may also be eligible for a reduced retirement benefit if you have less than twenty years of creditable service. In North Carolina, the state can decide to allow you to retire before you reach age sixty-two.
The cost of providing defined benefit pension benefits to public sector employees is highly volatile and depends on factors like investment performance, inflation, salaries, and workforce demographics. This instability has strained state budgets and created underfunded pension plans. While many state pension plans were fully funded in 2000, the combined effect of investment losses, years of shortfalls, and unfunded benefit increases have resulted in nearly $1 trillion in national pension debt. The cost of providing the minimum required pension payments rose more than 80 percent between 2003 and 2013.
Since the early 1970s, pension costs have risen in the percentage of state revenues, from 4.4 percent to 7.9 percent. While most state employees do not contribute to a governmental pension, a few exceptions exist.