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NC Lifetime Income

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 MembersTransfer Benefit for LEOs who were in the LEORS1Transfer Benefit for all other LEOs who vested by June 30, 2010
Payment OptionsMaximum
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 RefundChoice between 3 Year Guarantee and Guaranteed Return of TransferRefund of Employee Contributions TransferredRefund of Employee Contributions Transferred
COLA OptionsNo COLA or COLA equal to CPI-UCOLA granted in Retirement System (TSERS or LGERS)COLA granted in Retirement System (TSERS or LGERS)
Interest Rate Assumption220-year U.S. Treasury Bond Yield37.25%3.25% Net Interest (7.25% minus 4.00% COLA assumption)
Mortality (Lifespan) Assumption4Based on experience of general populationBased on experience of LEOs5Based on experience of LEOs5
Timing of TransferAt time of retirement or any time afterOnly available at time of retirementOnly available at time of retirement
Plans in Which AvailableNC 401(k) or NC Deferred Compensation (457)NC 401(k) OnlyNC 401(k) Only
Portion of BalanceAny portionAny portion6Any 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.

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