April 19, 1978
Subject:
Retirement; G.S. 135-4(m); Effect of Chapter 875 of the 1975 Session Laws
Requested By:
Mr. W. H. Hambleton, Director Retirement and Health Benefits Division Department of the Treasurer
Question:
Was the second paragraph of G.S. 135-4(m), requiring that all repayments for creditable service be made within three years of eligibility, repealed by Chapter 875 of the 1975 Session Laws?
Conclusion:
No.
Chapter 1311 of the 1973 Session Laws enacted several provisions allowing members of the North Carolina Teachers’ and State Employees’ Retirement System to purchase credit for previous service or service with various other entities upon certain conditions. The same act also provided for payment of the employer portion of such purchases and a three-year time limit for making such payments. Those latter provisions read as follows:
"Sec. 4. The employer portion of the annual cost to fund the provisions of this action shall be paid by the employer based on the employer contribution rate as determined by the actuary and no cost shall be paid from funds now held by the Retirement System.
Sec. 5. All repayments must be made within three years after the member first becomes eligible to make such repayments."
Chapter 1311 of the 1973 Session Laws did not attempt to codify the provisions of Sections 4 and 5 of that Bill, relating to the payment of the employer portion of these purchases and to the three-year time limit for making repayments. The two provisions constitute separate sections of the Bill. Although they appear to be separable, they were codified subsequently as a single section of the law regulating the Teachers’ and State Employees’ Retirement System.
G.S. 135-4(m) read follows:
"(m) The employer portion of the annual cost to fund the provisions of ((f) (6), (k) and (l)) shall be paid by the employer based on the employer contribution rate as determined by the actuary and no cost shall be paid from funds now held by the Retirement System.
All repayments must be made within three years after the member first becomes eligible to make such repayment."
As codified, G.S. 135-4(m) included two paragraphs, taken from Sections 4 and 5 of Chapter 1311 of the 1973 Session Law. G.S. 135-4(m) was not divided into further subsections, but the two paragraphs were separated by two or three lines while two paragraphs of a single section or subsection are not normally so separated.
Chapter 875 of the 1975 Session Laws repealed part or all of G.S. 135-4(m) as follows:
"Sec. 47. There is hereby repealed G.S. 135-4(m) and G.S. 135-5(u) which require that the employer portion of the annual cost to fund the provisions of G.S. 135-4(f)(6), (k) and (l) and
G.S. 135-5, subsections (s) and (t) shall be paid by the employer based on the employer contribution rate as determined by the actuary and no cost shall be paid from funds now held by the Retirement System."
Although Section 47 of Chapter 875 of the 1975 Session Laws did not quote the precise portions which were intended to be repealed, the Section did describe the provisions being repealed. Those provisions were described as requiring "that the employer portion of the annual cost to fund the provision of G.S. 135-4(f) (6), (k) and (l) and G.S. 135-5 subsections (s) and (t) shall be paid by the employer based on the employer contribution rate as determined by the actuary and no cost shall be paid from funds now held by the Retirement System." G.S. 135-5(u) was identical to the first paragraph of G.S. 135-4(m) except that it dealt with the employer portion of the cost to fund the provisions of G.S. 135-5(s) and (t) rather than provisions of G.S. 135-4(f) (6),
(k) and (l). G.S. 135-5(u) did not include any provisions or language in addition to that specifying that payment of the employer portion of the annual cost to fund the relevant provision should be paid based on employer contribution rate as determined by the actuary and not from any funds then held by the Retirement System.
Although Section 47 of Chapter 875 of the 1975 Session Laws states that G.S. 135-4(m) relating to funding of the employer portion of the cost of the relevant provisions for purchase of creditable service. The description of what was being repealed did not refer in any way to the provision requiring repayment within three years of eligibility. The provision requiring repayments to be made within three years is separable and is not covered in any other portion of the Retirement System Act. The two provisions were not originally enacted as part of the same section and do not necessarily go together or depend on each other in any way. Consequently, Section 47 of Chapter 875 of the 1975 Session Laws cannot be viewed as repealing the second paragraph of G.S. 135-4(m).
Rufus L. Edmisten Attorney General
Norma S. Harrell Associate Attorney