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The North Carolina Teachers’ and State Employees’ Retirement System (TSERS)

Is A Defined Benefit Plan

The North Carolina Teachers’ and State Employees’ Retirement System (TSERS) is a Defined Benefit plan that provides a guaranteed, lifetime monthly benefit upon retirement. You become vested in TSERS once you complete a minimum of five years of membership service.

As a member, your share of the cost is currently 6% of your compensation which is automatically deducted from your paycheck. Since July 1, 1982, contributions to TSERS have been tax deferred. Prior to this date, employee contributions to TSERS were made post-tax.

Your annual retirement benefit is based on an average of your Average Final Compensation (AFC) multiplied by your years and months of creditable service. Keep in mind your AFC is the average of your salary during your four highest-paid years in a row.

Membership in TSERS is automatic for eligible employees on your hire date if you are:

  • A permanent full-time teacher or employee of a state-supported board of education or community college.
  • A permanent employee of the state (or any of its agencies, departments, bureaus or institutions) and work at least 30 hours per week for nine months per year.
  • A permanent employee of a charter school that participates in TSERS, and you work at least 30 hours per week for nine months per year.

You can retire with a full retirement benefit after you:

  • Reach age 65 and complete 5 years of membership service.
  • Reach age 60 and complete 25 years of creditable service.
  • Complete 30 years of creditable service at any age.
Or, you can retire early with a reduced retirement benefit after you:
  • Reach age 50 and complete 20 years of creditable service.
  • Reach age 60 and complete 5 years of membership service.

Options Provided By The North Carolina Total Retirement Plans Solution

Under the North Carolina Total Retirement Plans, you also have the opportunity to save additional funds for your retirement by participating in Defined Contribution plans if offered by your state employer.

With the NC 401(k) and NC 457 Plans, the amount you receive at retirement is based on your personal contributions, any applicable employer contributions, and any earnings on the plan investments you’ve selected. Add to this, the NC 403(b) Program is another retirement savings option for public school employees in participating school districts.

Other North Carolina Pension Plans

The State of North Carolina provides other Defined Benefit pension plans including:
  • 1.The Local Governmental Employees' Retirement System (LGERS)
  • 2.State Law/Local Law Enforcement Officers’ Retirement Systems
  • 3.Consolidated Judicial Retirement System
  • 4.Firefighters’ and Rescue Squad Workers’ Pension Fund
  • 5.Legislative Retirement System
  • 6.National Guard Pension Fund
North Carolina Pension Plans

TSERS FAQs

How long do I need to work before I am vested in TSERS?

The vesting requirement for TSERS-eligible employees is a minimum of 5 years of retirement service credit with the Retirement System.

What is the TSERS retirement Age?

You can retire with a full retirement benefit after you:
  • Reach age 65 and complete 5 years of membership service.
  • Reach age 60 and complete 25 years of creditable service.
  • Complete 30 years of creditable service at any age.
Or, you can retire early with a reduced retirement benefit after you:
  • Reach age 50 and complete 20 years of creditable service.
  • Reach age 60 and complete 5 years of membership service.

Do I have to pay Federal Income Taxes on TSERS retirement benefit?

It depends on if your contributions were made before July 1, 1982, which is when employee contributions to the Retirement System were taken on a pre-tax basis. As a result:

  • Employee contributions made before July 1, 1982, are not subject to Federal taxes.
  • Employee contributions made on or after July 1, 1982, are subject to Federal taxes.

Will my TSERS retirement benefits be reduced by Social Security Benefits I receive?

No, TSERS does not reduce your benefit once you become eligible for Social Security.
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