North Carolina HB 1126: 2026 Department of State Treasurer Administrative/Technical/Clarifying Changes.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025

SESSION LAW 2026-50
HOUSE BILL 1126

*H1126-v-7*
AN ACT TO MAKE ADMINISTRATIVE, TECHNICAL, AND CLARIFYING CHANGES
TO THE LAWS RELATED TO THE DEPARTMENT OF STATE TREASURER.

The General Assembly of North Carolina enacts:

PART I. ADMINISTRATIVE CHANGES/RETIREMENT SYSTEMS

PREVIOUSLY CREDITED MILITARY SERVICE TO BE REINSTATED UPON
PURCHASE OF PREVIOUSLY WITHDRAWN SERVICE
SECTION 1.1.(a) G.S. 135-4(g) reads as rewritten:
"(g) Teachers All of the following apply to teachers and other State employees who served
in the uniformed services services, as defined in the Uniformed Services Employment and
Reemployment Rights Act of 1994, 38 U.S.C. § 4303, who (i) were not dishonorably discharged,
and who discharged and (ii) returned to the service of the State within a period of two years from
date of discharge shall discharge:
(1) The member shall be credited with prior service for such the period of service
in the uniformed services for the maximum period that they are the member
is entitled to reemployment under the Uniformed Services Employment and
Reemployment Rights Act of 1994, 38 U.S.C. § 4301, et seq., or other federal
law, and the law.
(2) The salary or compensation of such a the teacher or State employee during
that period of service credited under subdivision (1) of this subsection is
deemed to be that salary or compensation the employee would have received
but for the period of service had the employee remained continuously
employed, if the determination of that salary or compensation is reasonably
certain. If the determination of the salary or compensation is not reasonably
certain, then it is deemed to be that employee's average rate of compensation
during the 12-month period immediately preceding the period of service.
(3) When a member who has served in the uniformed services returns to work in
compliance with the conditions of this subsection, that member's employer
shall remit to the System all employer and employee contributions for the full
period of that member's military service.
(4) If a member forfeited service previously credited under this subsection by
electing to receive a return of accumulated contributions, as provided for
under G.S. 135-5(f), and subsequently purchases the maximum amount of
service allowed under G.S. 135-4.5(a)(1), then that member shall have the
service previously credited under this subsection restored."
SECTION 1.1.(b) Subsection (a) of this section is effective January 1, 2027, and
applies to members of the Teachers' and State Employees' Retirement System with forfeited
service that was previously credited under G.S. 135-4(g) who subsequently purchase the
maximum amount of service allowed under G.S. 135-4.5(a)(1) on or after January 1, 2027.
SECTION 1.1.(c) G.S. 128-26 is amended by adding a new subsection to read:

Page 2 Session Law 2026-50 House Bill 1126
"(a2) If a member forfeited service previously credited under subsection (a1) of this section
by electing to receive a return of accumulated contributions, as provided for under
G.S. 128-27(f), and subsequently purchases the maximum amount of service allowed under
G.S. 128-26.5(a)(1), then that member shall have the service previously credited under
subsection (a1) of this section restored."
SECTION 1.1.(d) Subsection (c) of this section is effective January 1, 2027, and
applies to members of the Local Governmental Employees' Retirement System with forfeited
service that was previously credited under G.S. 128-26(a1) who subsequently purchase the
maximum amount of service allowed under G.S. 128-26.5(a)(1) on or after January 1, 2027.

CONTRIBUTORY DEATH BENEFIT NOT SUBJECT TO OVERPAYMENT OFFSETS
SECTION 1.2.(a) G.S. 135-9(b) reads as rewritten:
"(b) Notwithstanding any provisions of law to the contrary, any overpayment of benefits
or erroneous payments to a member in a State-administered retirement system or the former
Disability Salary Continuation Plan or the Disability Income Plan of North Carolina, including
any benefits paid to, or State Health Plan premiums or claims paid on behalf of, any member or
beneficiary who is later determined to have been ineligible for those benefits or unentitled to
those amounts, may be offset against any retirement allowance, return of contributions or any
other right accruing under this Chapter to the same person, the person's estate, or designated
beneficiary. The ability to offset under this subsection does not apply to the fully contributory
death benefit for retired members under G.S. 135-175 or G.S. 135-64(k)."
SECTION 1.2.(b) G.S. 128-31(b) reads as rewritten:
"(b) Notwithstanding any provisions of law to the contrary, any overpayment of benefits
or erroneous payments to a member in a State-administered retirement system, the Disability
Salary Continuation Plan, or the Disability Income Plan of North Carolina, including any benefits
paid to, or State Health Plan premiums or claims paid on behalf of, any member who is later
d