Your Retirement Benefits

1 Your Retirement Benefits LOCAL GOV ERNM ENTAL EM PLOY EES'. RETI REM ENT system . FOR LOCAL LAW ENFORCEMENT OFFICERS. F utu res for P. ter u bl ic gh ri Em gB. plo y B u il d i n ees North Carolina Retirement Systems J A N U A RY, 2 0 0 9 D E PA R T M E N T O F S TAT E T R E A S U R E R , R A L E I G H , N O R T H C A R O L I N A 2 7 6 0 3 - 1 3 8 5. LOCAL governmental EMPLOYEES' Retirement system FOR LOCAL LAW ENFORCEMENT OFFICERS. State of North Carolina Department of State Treasurer Retirement Systems Division janet cowell Michael Williamson State Treasurer deputy treasurer To Local Law Enforcement Officers in the Local governmental Employees' Retirement system : It is a pleasure to provide you with the 2009 employee booklet, Your Retirement Benefits . As a member of the Local governmental Employees' Retirement system , you are covered by a plan that provides considerable Benefits . I want to make sure you understand your Benefits so you can take full advantage of them when you are eligible.

2 This booklet summarizes the Benefits available to you as a member of the Retirement system , including: Benefits you will receive at Retirement once you meet the service and age requirements;. B. enefits your beneficiary may receive if you die while you are an active employee or after you retire (death Benefits );. Qualifications for reemployment after retiring. As a public employee in North Carolina, you are a member of one of the strongest public pension plans in the country. You are part of a defined benefit plan. This means that when you become eligible for Retirement , your life long Benefits are guaranteed and protected by the Constitution of the State of North Carolina. Your Retirement system Benefits , when combined with your Social Security Benefits and other savings, such as the NC 401(k) Plan or the NC 457 Deferred Compensation Plan, can help you meet your financial goals for your Retirement years. Our staff of dedicated professionals joins me in my commitment to providing you with Retirement Benefits information to help you make informed decisions about your future.

3 I encourage you to familiarize yourself with the Benefits described in this booklet and contact the N. C. Retirement Systems if you have additional questions. It is a great privilege and honor to serve as your State Treasurer. Thank you for your dedicated service to the people of North Carolina. Sincerely, Janet Cowell Your Retirement Benefits JANUARY, 2009. LOCAL governmental EMPLOYEES' Retirement system FOR LOCAL LAW ENFORCEMENT OFFICERS. Your Retirement Benefits Details On:..Are On Page: Transferring Service And Contributions Between 18. Your Retirement system Benefits In 2 Refund Of 18. Becoming A Member Of The 2 18. Who Pays For The 3 Applying For And Receiving Monthly 19. Tax-Deferred Savings 3 Retirement Application 19. How Your Benefit Is 4 Your First Monthly 20. How To Qualify For 4 Post- Retirement 20. Becoming 4 Income 21. Service Retirement (Unreduced Benefits ).. 4 Retirement 21. Early Retirement (Reduced Benefits ).. 4 Death 23. Disability 5 23. Reciprocity Between Retirement 5 Reemployment After 24.

4 If You Leave The system Before 5 Important Information To 25. How Your Beneficiaries Are 6 Other Benefits Available For Survivor's Alternate 6 Law Enforcement 26. Death 6 Administration And 28. Example Of How A Benefit Is 7 How To Contact 30. At Service 7. At Early 8. Early Retirement 8. Examples Of Benefits 9. Retirement Benefit Payment 9. Maximum 10. Payment 10. How The Payment Options 12. Creditable Service And Service Purchase 13. Rollovers To Purchase Retirement Service 17. DISCLAIMER: The availability and amount of all Benefits you might be eligible to receive is governed by Retirement system law. The information provided in this handbook cannot alter, modify or other wise change the controlling Retirement system law or other governing legal documents in any way, nor can any right accrue to you by reason of any information provided or omission of information provided herein. In the event of a conflict between this information and Retirement system law, Retirement system law governs.

5 JANUARY, 2009 Your Retirement Benefits 1. LOCAL governmental EMPLOYEES' Retirement system FOR LOCAL LAW ENFORCEMENT OFFICERS. Your Retirement system Benefits In Brief n A. utomatic membership for eligible law enforce- n S. urvivor monthly income if you die in active ment employees. See below. service with 20 years of credit regardless of age;. n Y. ouand your employer pay the cost of retire- or after age 55 with five years of credit; or after ment Benefits . See page 3. age 50 and 15 years of credit. See page 6. n D. eath benefit paid to your beneficiary if you n M. onthly payments at Retirement based on your salary, age, and years of credit. See page 4. die in active service after one year of credit. See page 6. n U. nreduced Retirement benefit at age 55 with n S. everal payment five years of credit as an officer, or at any age with 30 years of credit; reduced benefit after options available age 50 and 15 years of credit as an officer. See to continue income page 4.

6 To your beneficiary following your death n A. right to an unreduced benefit at age 55 after after Retirement . See five years of credit as an officer, even though pages 9 through 12. you are no longer employed as a law enforce- ment officer. See page 5. This section just n D. isabilitybenefits available after five years of highlights the system . credit. See page 5. The following pages n L. ine-of-duty disability Benefits available after describe it in detail. one year of credit. See page 5. Becoming A Member Of The system You are eligible to become a member of the described in the booklet Your Retirement Benefits system if you are a permanent, full-time paid for general employees. employee of an employer, who (i) possesses the power of arrest, (ii) has taken the law enforcement Shortly after your employer enrolls you in the oath administered under the authority of the State system , the Retirement system will send you as prescribed by G. S. 11-11 and (iii) is certified as a Form 2C, Designating Beneficiary(ies) for a law enforcement officer under the provisions of Retirement system Contributions and the Death Chapter 17C of the General Statutes or certified Benefit, to complete.

7 On the Form 2C, you will as a deputy sheriff under the provisions of Chapter be asked to name your beneficiary(ies) to receive 17E of the General Statutes. Law enforcement a refund of your contributions and a death benefit officer also means the sheriff of the county. In if you die before Retirement . You can change your addition, the number of paid personnel employed beneficiary(ies) at any time by completing another as law enforcement officers by a law enforcement Form 2C, available from your employer or the agency may not exceed the number of law Retirement system . enforcement positions approved by the applicable As a law enforcement officer, when you become local governing board. a member of the Retirement system , you are If you work at least 1,000 hours per year but less automatically a member of the NC 401(k) Plan. than full-time, you are entitled to the Benefits See page 26 for details. 2 Your Retirement Benefits JANUARY, 2009. LOCAL governmental EMPLOYEES' Retirement system FOR LOCAL LAW ENFORCEMENT OFFICERS.

8 Who Pays For The system You and your employer, and the investment 1982 (January 1, 1984, if you were a member of earnings on total contributions pay the cost of the former Law Enforcement Officers' Retirement providing your Retirement Benefits . system ), your contributions to the Retirement system may be tax sheltered by action of your Your share of the cost, which is automatically employer for federal and North Carolina income deducted from your paycheck, is 6% of your tax purposes. compensation. Your compensation includes all salaries and wages paid to you, from public Your employer's share of the cost is based on funds, which you earn at your covered job while the calculations prepared by an actuary, so that working for your employer. Beginning July 1, Benefits will be funded properly. Tax-Deferred Savings Advantages Beginning July 1, 1982 (January 1, 1984, if you income is lowered and the amount of annual taxes were a member of the former Law Enforcement you pay is less than if you made contributions on Officers' Retirement system ), special tax an after-tax basis.

9 Advantages may apply to the contributions you make to the Retirement system because they are The example below assumes you are married, made on a before-tax basis provided your employer earn $30,000 a year, have four people in your has taken the proper action; this means that your family, and contribute 6% of your salary to contributions are deducted from your pay before the Retirement system . The amount of tax you taxes are calculated. As a result, your taxable actually pay will depend on current tax rates and your own financial situation. After-Tax Tax-Deferred Savings Savings Eligible Pay $30,000 $30,000. Tax-Deferred Savings 0 -1,800. Taxable Income $30,000 $28,200. Federal Income Tax Withholding* -1,882 -1,612. North Carolina State Income Tax Withholding* -1,259 -1,133. After-Tax Savings -1,800 0. Take-Home Pay $25,059 $25,455. Increased Take-Home Pay $396. *Estimated JANUARY, 2009 Your Retirement Benefits 3. LOCAL governmental EMPLOYEES' Retirement system FOR LOCAL LAW ENFORCEMENT OFFICERS.

10 How Your Benefit Is Calculated Creditable service means any period during Your annual Retirement benefit which you contribute to the system . In addition, is based on this formula: if you were working for your employer before its of average final compensation participation in the system , have unused sick leave, TIMES were in military service, or worked out-of-state in years and months of creditable service. related governmental employment, special rules may apply in determin- Average final compensation means the average ing creditable service. of your salary during your four highest-paid years See pages 13 through in a row. If your four highest-paid years in a row 17 for more details. include a final payment for unused vacation leave If you left the system and/or prorated longevity, your average final and withdrew any of compensation may be increased by the extra your own contributions, payment(s). (Final payments, if any, for unused you may restore your sick leave or reimbursements for expenses are not creditable service by includable in your average final compensation.)