NC H1195

Establishes a contribution-based benefit cap for service retirement allowances effective January 1, 2015, designed to limit pension spiking by capping benefits at no more than 0.75% of retirement allowances, with exemptions for members earning less than $100,000 average final compensation (indexed annually) and those who became members before January 1, 2015.

Allows members to restore capped retirement benefits by making a lump sum payment within 90 days of retirement notification, with the option for employers to contribute toward restoration costs.

Requires employers to make additional contributions equal to the benefit cap adjustment for members who became members on or after January 1, 2015, and earned at least five years of service after that date.

Eliminates the five-year vesting requirement for members of Teachers' and State Employees' Retirement System and Local Governmental Employees' Retirement System, allowing all members who leave employment within five years to receive return of contributions with accumulated interest.

Returns to a five-year vesting period for members of Teachers' and State Employees' Retirement System and Consolidated Judicial Retirement System who became members on or after August 1, 2011, and revises law enforcement officer special separation allowance requirements to conform with new vesting rules.