Special Options for Law Enforcement Officers (LEOs)
LEOs who were vested (had 5 years of service) prior to June 30, 2010 are eligible for a special Transfer Benefit. They can choose between the special LEO benefit and the Transfer Benefit available to all members. If you are a qualifying LEO, you can use the estimator in your ORBIT account to compare the amount you would receive under these two alternatives. To get to the estimator, login to ORBIT and then click on [View 401K/457 Transfer Benefit Estimate] on the left side of the screen.
The LEO benefit has different features and uses different assumptions in its calculation, as outlined in this table:
| Transfer Benefit Available to All Members | Transfer Benefit for LEOs who were in the LEORS1 | Transfer Benefit for all other LEOs who vested by June 30, 2010 | |
|---|---|---|---|
| Payment Options | Maximum Option 2 Option 3 Option 6-2 Option 6-3 |
Maximum Option 2 Option 3 Option 6-2 Option 6-3 Option 4 |
Maximum Option 2 Option 3 Option 6-2 Option 6-3 Option 4 |
| Guaranteed Refund | Choice between 3 Year Guarantee and Guaranteed Return of Transfer | Refund of Employee Contributions Transferred | Refund of Employee Contributions Transferred |
| COLA Options | No COLA or COLA equal to CPI-U | COLA granted in Retirement System (TSERS or LGERS) | COLA granted in Retirement System (TSERS or LGERS) |
| Interest Rate Assumption2 | 20-year U.S. Treasury Bond Yield3 | 7.25% | 3.25% Net Interest (7.25% minus 4.00% COLA assumption) |
| Mortality (Lifespan) Assumption4 | Based on experience of general population | Based on experience of LEOs5 | Based on experience of LEOs5 |
| Timing of Transfer | At time of retirement or any time after | Only available at time of retirement | Only available at time of retirement |
| Plans in Which Available | NC 401(k) or NC Deferred Compensation (457) | NC 401(k) Only | NC 401(k) Only |
| Portion of Balance | Any portion | Any portion6 | Any portion6 |
1 The Law Enforcement Officers' Retirement System. Balances in the Special Annuity Account were transferred to the NC 401(k) in January 1, 1985 for State LEOs and January 1, 1986 for local LEOs.
2 Higher interest rates result in a higher benefit payment for a given transfer amount.
3 Current values of this index can be found at this Federal Reserve Site.
4 A shorter assumed lifespan results in a higher benefit payment for a given transfer amount.
5 Because LEOs are mostly male, their lifespans are shorter than the general population, resulting in a larger benefit, all else equal.
6 Under this option, members used to have to transfer their entire balance or nothing. This was changed effective July 1, 2010.
