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HB 566

Give State Retirees 2% Cost-of-Living Adjustment/Funds.

2023-2024 Session Introduced by Eric Ager and 48 co-sponsors

Authorizes a 2% COLA for TSERS, CJRS, and LRS retirees (full for older retirees, prorated for recent ones) funded by $100M/year in a Reserve for Retiree COLAs (FY23-24, FY24-25)

Passed 1st Reading
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Bill Summary · HB 566

Summary — HB 566: Give State Retirees 2% Cost‑of‑Living Adjustment / Funds

Status (from bill text): Effective date July 1, 2023.

Purpose

Provide a one‑time cost‑of‑living adjustment (COLA) of 2% to eligible state retirement beneficiaries in three North Carolina retirement systems, and appropriate funds to a Reserve for Retiree Cost‑of‑Living Adjustments to support implementation.

Key provisions

  • Adds new statutory subsections to three retirement statutes to authorize a 2% increase in retirement allowances:
    • G.S. 135‑5 (Teachers’ and State Employees’ Retirement System — TSERS)
    • G.S. 135‑65 (Consolidated Judicial Retirement System — CJRS)
    • G.S. 120‑4.22A (Legislative Retirement System — LRS)
  • The 2% increase is calculated as 2% of the member’s retirement allowance as payable on June 1, 2023.
  • Proration rules for recent retirees:
    • TSERS and CJRS: beneficiaries whose retirement commenced on or before July 1, 2022 receive the full 2%. Beneficiaries whose retirement began after July 1, 2022 but before June 30, 2023 receive a prorated portion of the 2% based on months a retirement allowance was paid between July 1, 2022 and June 30, 2023 (proration determined by the applicable Board of Trustees).
    • LRS: beneficiaries whose retirement commenced on or before January 1, 2023 receive the full 2%. Beneficiaries whose retirement began after January 1, 2023 but before June 30, 2023 receive a prorated portion of the 2% based on months a retirement allowance was paid between January 1, 2023 and June 30, 2023 (proration determined by the Board of Trustees).
  • Appropriation: directs recurring transfers from the General Fund to the Reserve for Retiree Cost‑of‑Living Adjustments of $100,000,000 for FY 2023–24 and $100,000,000 for FY 2024–25 to implement the COLA.

Who is affected

  • Retirees and beneficiaries (including survivors) of:
    • Teachers’ and State Employees’ Retirement System (TSERS)
    • Consolidated Judicial Retirement System (CJRS)
    • Legislative Retirement System (LRS)
  • Recent retirees in the windows described above are eligible for a prorated COLA.

Fiscal and implementation notes

  • Direct appropriation of $100 million recurring in each of two fiscal years is specified; these sums fund the Reserve used to pay the COLA.
  • The bill sets the base for the increase (allowance payable 6/1/2023) and delegates proration details to the respective Boards of Trustees for implementation.
  • Longer‑term fiscal effects (beyond the two appropriation years) depend on how the Reserve is used and whether the 2% adjustment is treated as recurring base for future benefits; the bill itself specifies the percentage increase effective July 1, 2023.

Effective date

  • The bill takes effect July 1, 2023.

Compiled from official sources — confirm details with the bill’s official record.

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