The Teachers’ and State Employees’ Retirement System of North Carolina covers public school teachers and staff, state agency employees and most employees of the University of North Carolina system. It is one of the larger and better-funded public pension plans in the country. North Carolina teachers also pay into Social Security, so TSERS is designed to sit on top of a Social Security benefit.
The formula
Your yearly pension is 1.82% × your average final compensation × your years of creditable service. There is no cap on years.
Average final compensation is the average of your four highest-paid years in a row, 48 consecutive months. For most people that is the last four years, but it can be earlier. A final payout of unused vacation can raise it. Unused sick leave does not count toward salary, but it can be converted into extra service credit at retirement.
A teacher with 30 years and a four-year average of $60,000 gets 54.6% of $60,000, which is $32,760 a year or $2,730 a month, under the maximum allowance that stops at death. Survivor options pay less so a beneficiary can keep receiving a benefit.
For teachers, a year of service is usually 11 months of contributions. Working 8 of those months earns 8/11 of a year.
When the benefit is unreduced
| Path | Service | Age |
|---|---|---|
| Career | 30 years | Any age |
| Long service | 25 years | 60 or older |
| Age-based | 5 years | 65 or older |
A teacher who starts at 23 can retire at 53 with no reduction. Someone who starts later reaches a full benefit at 60 with 25 years, or at 65 with at least 5.
Early retirement
You can retire with a reduced benefit at 60 with 5 years or at 50 with 20 years. The reduction is permanent.
From 60 to 64 with fewer than 25 years, the benefit is cut by 3% for each year under 65:
| Age | Share of benefit |
|---|---|
| 64 | 97% |
| 63 | 94% |
| 62 | 91% |
| 61 | 88% |
| 60 | 85% |
From 50 to 59 with 20 to 29 years, TSERS uses the smaller of two cuts: 5% for each year you are short of 30 years, or 5% for each year under 60 plus 15%. In practice, people close to 30 years lose little, and younger people with fewer years lose more:
| Age | 29 years | 27 years | 25 years | 22 years | 20 years |
|---|---|---|---|---|---|
| 59 | 95% | 85% | 80% | 80% | 80% |
| 57 | 95% | 85% | 75% | 70% | 70% |
| 55 | 95% | 85% | 75% | 60% | 60% |
| 50 | 95% | 85% | 75% | 60% | 50% |
Between birthdays the reduction is prorated. The pension estimate calculator applies these rules to any age and service mix, and the retirement chart shows the full grid.
Vesting and leaving early
You are vested after 5 years of membership service. If you leave North Carolina public service before retiring, you can leave your contributions in TSERS and claim a deferred pension once you meet the age and service rules, or take a refund. A refund ends your right to a pension, so compare both. Our guide to leaving teaching early explains the trade-off.
COLA
TSERS has no automatic cost-of-living increase. The General Assembly decides each year whether to give retirees anything. The last permanent raise was 1% in July 2017. Since then the legislature has given occasional one-time supplements, such as 4% payments in 2022 and 2023, which do not raise the monthly check. Plan on the benefit staying flat in dollars. See the NC TSERS COLA page for the history and what may change from 2027.
Social Security
North Carolina teachers and state employees pay into Social Security, so most retirees receive both a TSERS pension and a Social Security check. The two do not reduce each other. The pension and Social Security calculator adds them together, and the Social Security benefit calculator estimates your check from your earnings record.
Taxes
North Carolina does not tax Social Security. TSERS pensions are taxed as income at the state’s flat rate, except for members who had five years of service by August 12, 1989, whose pensions are exempt under the Bailey settlement. See North Carolina retirement taxes or compare states with the retirement tax calculator.
How well funded is NC TSERS?
At the end of fiscal 2024, NC TSERS had assets to cover 89% of the benefits members have earned so far. That is close to the middle of the pack for large state plans. It has fallen from 96% in 2015.
In fiscal 2025, employers paid the full contribution the plan's actuaries asked for. A low funded ratio does not cut a pension you have already earned. Public pension benefits are protected by state law, and in many states by the state constitution. What a gap usually changes is the future: higher contributions from workers and employers, and less generous tiers for new hires.