Budget & Taxes (Pensions)

This bill reduces the cost for North Carolina public school teachers to purchase credit for their military service. Under the new provision, eligible veterans would only need to pay 25% of the usual cost, while the state would cover the remaining 75% through general appropriations. The law applies to full-time employees of the Teachers' and State Employees' Retirement System who served in the U.S. Armed Forces and allows them to buy up to four years of service credit. These changes would take effect on July 1, 2027, for any service credit purchases made on or after that date.

HB 498 creates a retirement credit for North Carolina teachers who served in the military. It allows veterans to count up to four years of active duty service toward their state retirement system, provided they weren’t dishonorably discharged, served before becoming a teacher, and meet licensure requirements. The bill modifies the retirement system to include this credit, requiring employers to pay a lump sum covering the retirement system’s increased liability for the credited service. This directly affects military veterans transitioning to teaching careers in North Carolina, making their prior service count toward retirement benefits.

HB 564 provides a 2% cost-of-living adjustment for retirees in North Carolina's Teachers' and State Employees' Retirement System, Consolidated Judicial Retirement System, and Legislative Retirement System. It increases retirement payments for retirees who retired on or before specific dates (July 1, 2024, for most systems, or January 1, 2025, for the Legislative system) and offers a prorated increase for those retiring between July 1, 2024, and June 30, 2025. The bill appropriates $106.2 million from the General Fund to fund this adjustment, effective July 1, 2025. This policy change directly affects current retirees in these systems by increasing their monthly benefits.