NC H381

Implements contribution-based benefit caps for members joining the Teachers' and State Employees' Retirement System and Local Governmental Employees' Retirement System on or after July 1, 2013, limiting retirement benefits to an amount equal to the actuarial equivalent of member contributions plus interest multiplied by a cap factor established by the Board of Trustees.

Adds fraud investigation provisions allowing Retirement Systems Division staff to presume that salary or remuneration paid for the principal purpose of enhancing a member's benefits is not compensation, with the presumption rebuttable by the member or employer and final determination made by the Board of Trustees.

Modifies retroactive membership service provisions to require certification that arrangements regarding backpay and benefits have been agreed upon by the employee and employer, and prohibits using hypothetical compensation in benefit recalculations when service purchases are used to settle disputes.

Requires the Department of State Treasurer to propose a framework by May 1, 2014, for an optional retirement plan as an alternative to the Teachers' and State Employees' Retirement System, and appropriates $4 million total ($1 million in 2013-2014 and $3 million in 2014-2015) for start-up costs plus $925,000 for staffing positions.

Consolidates retirement eligibility provisions by removing separate tiers for members who became members before or after August 1, 2011, eliminating duplicate benefit calculation sections and application deadline extensions from 120 to 90 days.