2009 North Carolina Code
Chapter 143B - Executive Organization Act of 1973.
§ 143B-426.41. Board of Trustees of the North Carolina Public Employee Special Pay Plan.

Part 29. Board of Trustees of the North Carolina Public Employee Special Pay Plan.

§ 143B‑426.41.  Board of Trustees of the North Carolina Public Employee Special Pay Plan.

(a)        The Governor shall, by Executive Order, establish a Board of Trustees of the North Carolina Public Employee Special Pay Plan, which when established shall be constituted as an agency of the State of North Carolina within the Department of Administration. The Board shall adopt and implement an Internal Revenue Service approved Special Pay Plan for State employees, which shall enhance, and not diminish, existing Special Pay benefits. A Special Pay Plan is a qualified retirement plan under section 401(a) of the Internal Revenue Code, which is approved by the Internal Revenue Service, that reduces the federal tax burden on special compensation payments made on behalf of State employees which if paid directly to a State employee would be compensation income within the meaning of the Internal Revenue Code.

(b)        The Board shall consist of seven voting members, as follows:

(1)        The State Personnel Director.

(2)        The State Budget Officer, who shall serve as chair.

(3)        The State Treasurer.

(4)        A State employee who has knowledge of benefits and benefit administration appointed by the Governor.

(5)        An employee of a public school system administrative unit who is knowledgeable about payroll and benefit matters, appointed by the Governor.

(6)        An employee of The University of North Carolina System who is knowledgeable about payroll and benefit matters, appointed by the Governor.

(7)        An employee of the Community College System who is knowledgeable about payroll and benefit matters, appointed by the Governor.

Any member may designate in writing, filed with the Board, any employee of his department to act at any meeting of the Board from which the member is absent, to the same extent that the member could act if present at that meeting. The initial term of the member appointed pursuant to subdivisions (4) and (5) of this subsection shall end July 1, 2004, and, thereafter, the member shall serve terms of four years. The initial term of the member appointed pursuant to subdivisions (6) and (7) of this subsection shall end July 1, 2006, and, thereafter, the member shall serve terms of four years.

(c)        The Board may delegate the performance of its administrative duties as it deems appropriate, including coordination and administration of the Plan. Prior to contracting for such services, the Board shall seek written proposals.

(d)        The Plan shall be limited to employees age 55 or older whose Special Pay totals five thousand dollars ($5,000) or more per year. The Board may designate appropriate investment vehicles, trust services, and administrative services from any company duly authorized to conduct business in this State. Prior to contracting for any such services, the Board shall seek written proposals. The Board may establish, alter, amend, and modify the Special Pay Plan, to the extent it deems necessary or desirable, for the purpose of facilitating the administration, investment, and maintenance of assets acquired by the investment of Special Pay Plan funds. The Board of Trustees, may, however, exclude any categories of compensation or set floors or ceilings in order to ameliorate any hardships or unintended consequences.

Prior to implementing a Special Pay Plan, the Board shall investigate participation options and weigh the advantages and disadvantages to both the State and State employees of various participation options available.

The Special Pay Plan approved by the Board shall include the following components:

(1)        The Plan shall require permanent savings for all State employees participating in the Special Pay Plan of no less than the lesser of seven and sixty‑five hundredths percent (7.65%) or the FICA percentage applicable to all Special Pay subject to the Plan.

(2)        State employees who elect and are entitled to immediate distribution from the Plan shall be guaranteed payment of the entire amount of Special Pay, plus earnings, and less any mandatory income tax withholding in no more than seven days from the date payment is made to the Plan on behalf of the State employee.

(3)        The Plan shall phase in participation in the Special Pay Plan by State agencies as directed by the Board.

(e)        A majority of the Board shall constitute a quorum for the transaction of business. (2002‑126, s. 28.6.)