Question:
For NC Bailey Act purposes, is a federal employee, with 5 years vested service prior to 12 Aug 1989, still vested if withdrawn retirement funds are not paid back by 12 Aug 2989?
- NC DOR makes that specific requirement for state and local government employees, but not specifically for federal employees. See below statements.
NCDOR Directive PD-99-1 dated March 4, 1999:
"Vesting" Period for Qualifying State or Local Retirement Systems
An employee in a qualifying State or local government retirement system who was vested prior to August 12, 1989, and who leaves employment remains vested if the employee later returns to work, provided the employee did not withdraw his or her contributions to the retirement system.
- If the employee withdrew his or her contributions, the employee is no longer vested in the retirement system, even if the employee subsequently buys back the service time, unless the employee returned to employment in time to become vested again before August 12, 1989.
"Vesting" Period for Qualifying Federal Retirement Systems
Generally, participants in the qualifying federal retirement systems listed above, including military retirees, are vested for purposes of the settlement if they had five or more years of creditable service as of August 12, 1989.
- The general rule, however, does not apply to the Thrift Savings Plan.
