My wife will soon be able to decide whether or not she wants to continue contributing to the state's retirement fund or solely contribute to her 403(b).

I'm curious what are the pros and cons of contributing to the state's retirement fund, and what other tdubbers have this option?

2/27/2012 9:38:36 AM

i was under the impression you had to give 6% every paycheck without choice

but i have only been with the state for 2 years now, so yeah

2/27/2012 9:42:57 AM

When did this option come around? I just left the state and ^ was still in place.

2/27/2012 9:53:19 AM

A more obvious pro would be the ability to shop around and try to beat the State savings rate.

2/27/2012 10:01:11 AM

if she intends to stay with the state until retirement, stay with the retirement fund.

2/27/2012 10:06:34 AM

I have the option (401k), but I am in SC where they have a huge pension budget shortfall. Now, they are making us contribute more (6.5% now, soon to be 7.5%), but all that goes into my 401k, with the state matching 5%. Not too shabby, but I hope they pass the 2% COL increase in the new budget.

Just be glad NC doesn't have a Nikki Haley as governor.

2/27/2012 10:22:14 AM

I was pretty sure after 4 years you can cash out and move it all to a 403b

2/27/2012 11:04:59 AM

TIL that even SC has outsourced their government to India, with the faked americanized name and everything.

2/27/2012 11:22:27 AM

The nice thing about the state plan is that once you are vested (5 years I think), it functions as a traditional pension plan. So you get a check every month from retirement until you die, even if the amount you had banked runs out. (Or until the state runs out of money). Even though the sum might not be large, it's a really nice thing to have in your back pocket. That's why I plan to leave my contributions in the state fund even after I leave state service, whenever that is, rather than rolling them over to any other sort of plan.

(Though I, too, was unaware of the option to move your 6% to a different plan as well. Is that an EPA vs. SPA thing?)

[Edited on February 27, 2012 at 12:19 PM. Reason : d]

2/27/2012 12:17:59 PM

Quote :

"The nice thing about the state plan is that once you are vested (5 years I think), it functions as a traditional pension plan. So you get a check every month from retirement until you die, even if the amount you had banked runs out. (Or until the state runs out of money). "

The vested time thing depends on your age and when you joined. Currently, if you only work 5 years, you basically can't get a check until you're 70. You need 20 years to get one at 50, or 30 years at any age.

They changed the rules like 5 or 6 years ago, so if you were with the state then, you could get vested easier.

2/27/2012 8:11:32 PM

I've worked for the state in one capacity or another since 2000 and have been "official" full-time since 2004 (with I think something like 1.5 years of credit from my part-time work so retroactive to early '03) so I do fall under one of the older sets of rules. I don't know the specifics, but I'm not looking to retire way early, so it's the same to me.

I suppose the 70 thing is kind of a detriment for those who fall under the newer rules.

2/28/2012 10:16:25 AM

i'm betting the change is that she's moving from SPA to EPA

2/28/2012 4:18:31 PM

Quote :

"(Or until the state runs out of money)."

Yeah, this is kind of what I worry about. I feel like putting it in a 403b is safer

2/29/2012 7:42:50 AM

I'm almost 6 years into the system now. I started before October 06, so I qualify for the healthcare provision if I leave my money in there. Nice perk to have locked up.

2/29/2012 8:26:40 AM

what is the healthcare provision?

2/29/2012 8:27:31 AM

Under current law, if you were first hired prior to 10/1/06, and retire with five or more years of TSERS membership service, the State will pay for your individual coverage under the Preferred Provider Organization (PPO) 70/30 Plan. Based on the conditions described above, if you were first hired on or after 10/1/06, in order to receive individual coverage at no cost, you must retire with 20 or more years of retirement service credit; if you have 10 but less than 20 years of retirement service credit, you will have to pay 50% of the cost for your coverage, and with five but less than 10 years, you will have to pay the full cost for your coverage. In all cases, the full cost of dependent coverage, if elected, must be paid by you.

http://www.nctreasurer.com/dsthome/retirementsystems/frequentlyaskedquestions

2/29/2012 8:29:18 AM

Quote :

"Under current law, if you were first hired prior to 10/1/06, and retire with five or more years of TSERS membership service, the State will pay for your individual coverage under the Preferred Provider Organization (PPO) 70/30 Plan."

hired AT ALL or hired as a full-time employee?

i worked for the state before 10/1/2006, but didn't become a full-time employee until 2007...i suspect i'm not grandfathered into the healthcare thing, but i should probably talk to HR to find out for sure

[Edited on February 29, 2012 at 9:39 AM. Reason : .]

2/29/2012 9:36:45 AM

I'd go here and check

https://orbit.myncretirement.com/orbit/Common/Pages/BPASLogin.aspx

Has your start date on there and stuff.

2/29/2012 1:51:05 PM

^ ah, i haven't spent much time on the portal...logged in, though, and it has my start date as 2007

i suppose i gotta stay with the state for another 5+ years

2/29/2012 3:39:11 PM

Stay with the state retirement system if you plan on upward career movement. Your retirement pension is based on your 4 highest earning years (or something very similar depending on the state), so it doesn't matter if you make 30k or 100k, you still have 6% of your pay put towards it. Basically you could work an entry-level 30k/year job for 26 years, and then take a 150k admin/mgmt. position for the last years of your career, and your pension will be based on the 150k. This is somewhat common in local gov't. (which i'm in)

2/29/2012 11:45:10 PM

^One of the main reasons I don't like it. A lot of people do that and I don't understand how it is sustainable.

5/14/2012 5:33:09 PM

Nikki Haley

Quote :

"Haley was born Nimrata Nikki Randhawa[11] in Bamberg, South Carolina, on January 20, 1972, to a Jatt Sikh family of Randhawa Clan."

Tom Haverford

Quote :

"Thomas Montgomery Haverford is an Indian American, who changed his name from Darwish Sabir Ismael Gani to be more appealing in politics. He is often assumed to be an immigrant by much of the Parks and Recreation staff, though, as he frequently reminds them, he hails from South Carolina, as does Ansari."

amirite?

5/14/2012 6:43:32 PM

^^A lot do it, but far more do not. Your average state/local employee will work his/her way up through the years and contribute a "fair" share towards their retirement. The state retirement system is actually very stable/dependable, as long as the state puts in its share. As in the case of Virginia, the system is facing problems because the state didn't contribute the amount it was obligated, but rather underfunded it and wrote an IOU. This is a problem that compounds on itself...

5/14/2012 11:24:19 PM

Quote :

"I'm almost 6 years into the system now. I started before October 06, so I qualify for the healthcare provision if I leave my money in there. Nice perk to have locked up."

I started June 2006 and waited until I was there for at least 5 years for just this reason. Awesome perk.

5/15/2012 12:41:56 AM

I started in December 06. Pwnt stay home.

5/15/2012 9:56:23 AM

doesn't that law only really make a difference if you are looking to retire soonish?

5/15/2012 11:12:27 AM

i dont think that health insurance thing kicks in until you're 65

5/15/2012 11:32:53 AM

I'll be completing my 6th year at the end of this month. I'm kind of in no man's land right now. No bumps in vacation time in the near future and no longevity pay for four more years.

5/16/2012 12:37:46 PM

Okay so my wife left to join a private company. Has anyone transferred their pension before? Is there an account number?

8/21/2013 8:56:49 AM

The workers in Detroit probably wish they had private retirement accounts.

8/21/2013 1:04:55 PM

As a state employee, I don't think you can 'transfer' your pension funds. You 'may' be able to disperse your contributions, less all state contributions.

8/21/2013 1:22:25 PM

You can when you're no longer employed by the state. She can withdrawal them and put them into an IRA. Or just get cash money.

8/21/2013 1:37:09 PM

Honestly, this is not a question for TWW. Your wife had an HR facilitator. A 5 minute call will tell her everything she needs to know.

If she was employed before the change and is vested for full healthcare coverage I think you would be very foolish to pull out from this.

[Edited on August 21, 2013 at 1:47 PM. Reason : .]

8/21/2013 1:42:14 PM

she wasn't vested - getting a hold of hr is difficult right now

8/21/2013 4:05:18 PM

I've moved to VA since my original post so I'm obviously no longer employed by the state, but the fact that I'm vested is why I'm not even considering rolling my money into an IRA/401k/etc. Inasmuch as anything related to the state is secure, it is, and it's a really nice thing to have in your back pocket. Plus if I ever do find myself back in NC and end up back in state employ, I can pick up where I left off.

Quote :

"You can when you're no longer employed by the state. She can withdrawal them and put them into an IRA. Or just get cash money. "

You take a pretty sizeable tax it if you withdraw collected retirement funds rather than rolling them into an IRA/another plan, FYI. More than they would have been taxed had you taken them as income originally.

[Edited on August 21, 2013 at 5:20 PM. Reason : d]

8/21/2013 5:17:37 PM

Presumably a 10% penalty like with most early 401k distributions

8/21/2013 5:29:56 PM

Yeah meant to say we are doing a rollover.

8/21/2013 6:14:24 PM

If she's not vested, then the question is, what is the chance of returning to state employment at some point in here career. If it is likely, you might want to leave it there. Otherwise, you can roll it into a Traditional IRA with any firm you want. I would recommend this over rolling it over into her new employers plan, because you can probably find a better deal. I prefer Vanguard.

8/21/2013 10:57:28 PM

https://orbit.myncretirement.com/Orbit/Info/Pages/ListAllForms.aspx?formCat=F4CONTWTHD -- Click Contributions or Credit Withdrawal Forms, it will be the only one listed.

She'll need to complete Form 5 and send it to the retirement division of the state treasurer's office to withdraw her contributions.

[Edited on August 21, 2013 at 11:18 PM. Reason : .]

8/21/2013 11:17:08 PM

Quote :

"she wasn't vested - getting a hold of hr is difficult right now"

Pat Mcrory probably cut the HR dept so he could give his cabinet raises.

8/21/2013 11:47:18 PM

Quote :

"If she's not vested, then the question is, what is the chance of returning to state employment at some point in here career. If it is likely, you might want to leave it there. "

You can always buy your service back

^^I know, I have that form. I'm aware of the process. The issue is her brokerage wants an account number. NcT has a 10 day response period to their support. I was just seeing if anyone else her had done it.

8/22/2013 7:02:08 AM

Buying your service back will be a lot more expensive than what they're going to pay out. She'll also lose any sick hours and other potential benefits the moment you withdraw the funds. You still haven't answered the EPA/SPA question which has a bearing on what her options are and what the drawbacks would be.

8/22/2013 12:25:19 PM

EPA/SPA question? She doesn't work for the gov't anymore so I don't see what good sick hours has to do with anything. Not really sure what other potential benefits there are.


[Edited on August 22, 2013 at 2:35 PM. Reason : ]

8/22/2013 2:21:23 PM

Quote :

"(Though I, too, was unaware of the option to move your 6% to a different plan as well. Is that an EPA vs. SPA thing?)"

Quote :

"i'm betting the change is that she's moving from SPA to EPA"

You're asking for advice on here for a very specific situation without giving us any specifics of your wife's employment. All we know at this point is that she worked for the state. Benefits are very different for SPA vs EPA employees. As for sick hours, if she goes back to work for the state anytime within the next five years, the sick hours she has banked will still be there for her to use. If she withdraws the funds, she will lose them. She can also receive an additional month of service credit for every ~20 days of sick hours which will have additional benefits on her retirement. As CarZin said, if she is vested (which it sounds like she is), it would be very foolish to withdraw the funds.

[Edited on August 22, 2013 at 2:35 PM. Reason : .]

8/22/2013 2:35:07 PM

She was a teacher. She is definitely not vested. She only had 3 years of experience.

8/22/2013 2:43:26 PM

ok, I must have been thrown off when you said she almost had 4 years of experience in 2/12.

8/22/2013 2:50:24 PM

I never said that - however, 4 years is still 6 short of being able to be vested

8/22/2013 4:33:35 PM

So I just went through my benefits orientation session today, and I have no clue what to do. The field i'm in, I probably wont ever make a ton of money. If I go with the State retirement plan, I have to stay working at a University in NC right? I know I will probably always work in a University, but not totally sure if I'll always be in NC (although i'd love to).

SO yea, I have no clue about these benefits, or which will be best for me.

8/28/2013 7:11:07 PM

If you leave the state before you're vested, you can always get your contributions back in a lump sum (preferrably rolled-over into an individual IRA). I'm in local government and I did that after moving to Virginia. It's a pretty painless process.

8/28/2013 7:41:36 PM

I guess im just kinda worried since they lady kept saying you are locked into this decision for life. No switching. So i dont know whether to go with the state plan, or with one of the providers...

8/28/2013 9:14:18 PM