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HB 487

RELATING TO GOVERNMENT EFFICIENCY.

2025 Regular Session Introduced by Chris Muraoka

Shortens post-retirement separation for qualifying retired ADAs/APDs to two months if rehired by the Judicial Branch, contingent on favorable IRS ruling.

Carried over to 2026 Regular Session.
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Bill Summary · HB 487

HB 487 — Shorter Separation for Retired Assistant District Attorneys and Assistant Public Defenders

Status: Committee Substitute Reported Favorably (4/9/2025)
Subject areas: Pensions/Retirement; Judicial branch employment; State personnel; Treasury/IRS compliance

Purpose / Intent

The bill shortens the mandatory post‑retirement separation period that normally prevents a retiree from returning to covered employment while receiving monthly retirement benefits. It aims to allow experienced former assistant district attorneys (ADAs) and assistant public defenders (APDs) to be rehired by the Judicial Branch sooner, easing staffing shortages while preserving retirement benefit rules for other workers.

Key provisions

  • Amends G.S. 135‑1(20) (definition of “retirement”) and related provisions:
    • For members who have earned at least five years of membership service as an assistant district attorney or assistant public defender (as certified by the Administrative Office of the Courts, the Conference of District Attorneys, or the Director of Indigent Services), the required separation period before reemployment while receiving retirement benefits is reduced from six months to two months — but only where the retiree returns to employment with the Judicial Branch.
    • Parallel changes apply in G.S. 135‑3(d) (reemployment rules/options that minimize financial impact to the retiree) and G.S. 135‑106(b) (long‑term disability / interaction with retirement eligibility).
  • IRS compliance safeguard:
    • Directs the State Treasurer to request a private letter ruling (PLR) from the Internal Revenue Service to determine whether the statutory change would jeopardize the tax‑qualified status of the Teachers’ and State Employees’ Retirement System (TSERS).
    • The Treasurer must submit the PLR request by January 1, 2026 (or within 120 days after the act becomes law). The bill conditions the continued effectiveness of the shortened separation on receiving a favorable IRS determination; adverse findings trigger specified administrative notifications and repeal/other remedial steps (per the bill’s contingency language).

Who is affected

  • Primary beneficiaries: retired assistant district attorneys and assistant public defenders with ≥5 years of service who are eligible for rehire by the Judicial Branch.
  • Administrative bodies: Judicial Branch hiring officers, the Teachers’ and State Employees’ Retirement System (TSERS), the State Treasurer’s Office (to pursue the IRS ruling), and certifying agencies (Administrative Office of the Courts, Conference of District Attorneys, Director of Indigent Services).
  • Indirectly affected: State budgets and pension plan funding/actuarial status if changes in rehire patterns or benefit treatments are material.

Potential impacts

  • Staffing: Enables faster rehiring of experienced prosecutors/defense attorneys to fill vacancies or temporary needs.
  • Pension/tax risk: The change could raise IRS qualification concerns for TSERS; the bill expressly requires a PLR before full implementation to avoid jeopardizing tax-advantaged status.
  • Fiscal/administrative: Likely modest near‑term administrative costs (pursuing PLR, notification procedures); actuarial/fiscal impacts depend on scale of rehiring and benefit/earnings interactions (not quantified in the bill).

Procedural / timeline notes

  • Committee substitute reported favorably 4/9/2025.
  • The Treasurer’s PLR must be requested by Jan 1, 2026 (or within 120 days of enactment).
  • The provision’s continued effect is contingent on IRS treatment; adverse determinations will trigger repeal or other specified actions per the bill.

(Prepared to assist with follow‑up: bill text cross‑references, likely administrative steps for a judicial employer to rehire a retiree, or comparison with earlier 30‑day proposal.)

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

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