North Carolina House Bill H477 Amended / Bill

                    GENERAL ASSEMBLY OF NORTH CAROLINA 
SESSION 2025 
H 	1 
HOUSE BILL 477 
 
 
Short Title: Retirement Death Benefits Rewrite.-AB 	(Public) 
Sponsors: Representatives Carson Smith and Wheatley (Primary Sponsors). 
For a complete list of sponsors, refer to the North Carolina General Assembly web site. 
Referred to: Pensions and Retirement, if favorable, Judiciary 1, if favorable, Rules, Calendar, 
and Operations of the House 
March 24, 2025 
*H477 -v-1* 
A BILL TO BE ENTITLED 1 
AN ACT TO RECODIFY AND STANDARDIZE THE LAWS RELATING TO THE DEATH 2 
BENEFIT PLAN, INCLUD ING BY MAKING TECHNI CAL, CLARIFYING, AND 3 
CONFORMING CHANGES, UNDER THE TEACHERS' AND STATE EMPLOYEES' 4 
RETIREMENT SYSTEM, T HE LOCAL GOVERNMENTA L EMPLOYEES' 5 
RETIREMENT SYSTEM, THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, 6 
AND THE LEGISLATIVE RETIREMENT SYSTEM, TO MAKE CHANGES TO TH E 7 
SURVIVOR'S ALTERNATE BENEFIT UNDER THOSE RETIREMENT SYSTEMS, 8 
AND TO ENSURE SUFFICIENT FUNDING FOR LINE OF DUTY DEATH BENEFITS. 9 
The General Assembly of North Carolina enacts: 10 
 11 
PART I. TECHNICAL RE CODIFICATION AND STA NDARDIZATION OF THE 12 
DEATH BENEFIT PLAN F OR MEMBERS OF THE TE ACHERS' AND STATE 13 
EMPLOYEES' RETIREMEN T SYSTEM 14 
SECTION 1.(a) Chapter 135 of the General Statutes is amended to add a new Article 15 
8 to be entitled "Death Benefit Plan for State Employees and Retirees" that consists of the 16 
following new sections: 17 
(1) G.S. 135-153. 18 
(2) G.S. 135-154. 19 
(3) G.S. 135-155. 20 
(4) G.S. 135-160. 21 
(5) G.S. 135-165. 22 
(6) G.S. 135-170. 23 
(7) G.S. 135-175. 24 
(8) G.S. 135-180. 25 
(9) G.S. 135-185. 26 
(10) G.S. 135-190. 27 
(11) G.S. 135-195. 28 
(12) G.S. 135-200. 29 
SECTION 1.(b) The first and second sentence of G.S. 135-7(g)(2) are recodified as 30 
the first and third sentence of subsection (a) of G.S. 135-154. 31 
SECTION 1.(c) The first sentence of the lead-in language in subsection 135-7(g) is 32 
recodified as the second sentence of subsection (a) of G.S. 135-154. 33  General Assembly Of North Carolina 	Session 2025 
Page 2  House Bill 477-First Edition 
SECTION 1.(d) The third sentence of G.S. 135-7(g)(2) is recodified as subsection 1 
(b) of G.S. 135-154. 2 
SECTION 1.(e) The fourth, fifth, and sixth sentences of G.S. 135-7(g)(2) are 3 
recodified as the first three sentences of subsection (c) of G.S. 135-154. 4 
SECTION 1.(f) The third sentence of G.S. 135-7(g)(3) is recodified as the fourth 5 
sentence of subsection (c) of G.S. 135-154. 6 
SECTION 1.(g) The first sentence of G.S.135-7(g)(3) is recodified as subsection (d) 7 
of G.S. 135-154. 8 
SECTION 1.(h) The caption and the first sentence of the first paragraph of 9 
G.S. 135-5(l) are recodified as subsection (a) of G.S. 135-155. 10 
SECTION 1.(i) The second, third, and fourth sentences of the first paragraph of 11 
G.S. 135-5(l) are recodified as subsection (b) of G.S. 135-155. 12 
SECTION 1.(j) The seventh paragraph of G.S. 135-5(l) is recodified as subsection 13 
(a) of G.S. 135-160. 14 
SECTION 1.(j1) G.S. 135-6(e1) is recodified as subsection (b) of G.S. 135-160. 15 
SECTION 1.(k) The first sentence of the second paragraph of G.S. 135-5(l) is 16 
recodified as subsection (b) of G.S. 135-165. 17 
SECTION 1.(l) The second sentence of the second paragraph of G.S. 135-5(l) is 18 
recodified as subsection (c) of G.S. 135-165. 19 
SECTION 1.(m) The fourth sentence of the second paragraph of G.S. 135-5(l) is 20 
recodified as subsection (d) of G.S. 135-165. 21 
SECTION 1.(n) Sub-subdivision a. of subdivision (2) of the sixth paragraph of 22 
G.S. 135-5(l) is recodified as subdivision (3) of G.S. 135-170. 23 
SECTION 1.(o) Sub-subdivision b. of  subdivision (2) of the sixth paragraph of 24 
G.S. 135-5(l) is recodified as subdivision (1) of G.S. 135-170. 25 
SECTION 1.(p) Sub-subdivision c. of subdivision (2) of the sixth paragraph of 26 
G.S. 135-5(l) is recodified as sub-subdivision a. of subdivision (2) of G.S. 135-170. 27 
SECTION 1.(q) Subdivision (3) of the sixth paragraph of G.S. 135-5(l) is recodified 28 
as sub-subdivision b. of subdivision (2) of G.S. 135-170. 29 
SECTION 1.(r) Subdivision (4) of the sixth paragraph of G.S. 135-5(l) is recodified 30 
as sub-subdivision c. of subdivision (2) of G.S. 135-170. 31 
SECTION 1.(s) The first sentence of the thirteenth paragraph of G.S. 135-5(l) is 32 
recodified as subsection (b) of G.S. 135-175. 33 
SECTION 1.(t) The sixth and seventh sentences of the thirteenth paragraph of 34 
G.S. 135-5(l) are recodified as subsection (c) of G.S. 135-175. 35 
SECTION 1.(u) The first sentence of the eighth paragraph of G.S. 135-5(l) is 36 
recodified as subsection (a) of G.S. 135-180. 37 
SECTION 1.(v) The second sentence of the eighth paragraph of G.S. 135-5(l) is 38 
recodified as subsection (c) of G.S. 135-180. 39 
SECTION 1.(w) The third sentence of the eighth paragraph of G.S. 135-5(l) is 40 
recodified as subsection (d) of G.S. 135-180. 41 
SECTION 1.(x) The caption and first and second sentences of G.S. 135-5(l1) are 42 
recodified as subsection (a) of G.S. 135-190. 43 
SECTION 1.(y) The third sentence of G.S. 135-5(l1) is recodified as subsection (b) 44 
of G.S. 135-190. 45 
SECTION 1.(z) The third sentence of the second paragraph of G.S. 135-5(l) is 46 
recodified as G.S. 135-195. 47 
SECTION 1.(aa) The fourth sentence of G.S. 135-5(l1) is recodified as 48 
G.S. 135-200. 49 
SECTION 2.(a) The remainder of G.S. 135-7(g) not recodified by Section 1 of this 50 
act is repealed. 51  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 3 
SECTION 2.(b) The remainder of G.S. 135-5(l) not recodified by Section 1 of this 1 
act is repealed. 2 
SECTION 3. Article 8 of Chapter 135 of the General Statutes, as created by Section 3 
1 of this act, reads as rewritten: 4 
"Article 8. 5 
"Death Benefit Plan for State Employees. 6 
"§ 135-153.  Definitions. 7 
The following definitions apply in this Article: 8 
(1) Benefit Trust. – The North Carolina Teachers' and State Employees' Benefit 9 
Trust under G.S. 135-154. 10 
(2) Death Benefit Plan. – The Death Benefit Plan for State Employees and 11 
Retirees under this Article. 12 
(3) Disability Income Plan. – The Disability Income Plan of North Carolina under 13 
Article 6 of this Chapter. 14 
(4) Reserved for future codification purposes. 15 
(5) Reserved for future codification purposes. 16 
(6) Participating plans. – All of the following: 17 
a. The Death Benefit Plan. 18 
b. The Local Governmental Death Benefit Plan under Part 2 of Article 3 19 
of Chapter 128 of the General Statutes. 20 
c. Contributory death benefits available to retired members of the 21 
Consolidated Judicial Retirement System under G.S. 135-64. 22 
d. Contributory death benefits available to retired members of the 23 
Legislative Retirement System under G.S. 120-4.27. 24 
e. The Separate Insurance Benefits Plan under G.S. 143-166.60. 25 
(7) Reserved for future codification purposes. 26 
(8) Reserved for future codification purposes. 27 
(9) Workers' compensation benefits. – Excluding any payments for a permanent 28 
partial disability rating, disability income benefits provided under Chapter 97 29 
of the General Statutes. 30 
"§ 135-154.  North Carolina Teachers' and State Employees' Benefit Trust. 31 
(a) Benefit Trust. – A trust fund, the North Carolina Teachers' and State Employees' 32 
Benefit Trust, is hereby created as a master trust to which all receipts, transfers, appropriations, 33 
contributions, investment earnings, and other income belonging to the Plans participating plans 34 
shall be deposited, and from which all benefits and expenses against the Plans those participating 35 
plans shall be disbursed. It is the intent of the General Assembly that a this master trust fund be 36 
created that provides provide an irrevocable source of funding to be used, to the extent the fund's 37 
assets are sufficient, only for death benefits and disability benefits payable to the Plans' members, 38 
participants, and beneficiaries, pursuant to G.S. 120 4.27, G.S. 128 27(l), subsections (l2) through 39 
(l6) of G.S. 128 27, 135 5(l), 135 64(k), and 143 166.60. beneficiaries of the participating plans 40 
and reasonable expenses for the administration of the participating plans. The Boards of Trustees 41 
of the Teachers' and State Employees' Retirement System and the Local Governmental 42 
Employees' Retirement System shall be the trustee of the Benefit Trust. 43 
(b) No Comingling of Funds. – Within the Benefit Trust, the funds of each of the Plans 44 
participating plans shall be accounted for separately and not commingled. 45 
(c) Assets. – Assets of one participating plan cannot be used to pay for liabilities of 46 
another participating plan within the Benefit Trust. The assets of the trust fund Benefit Trust shall 47 
be used only for the exclusive benefit of persons who are or may be entitled to benefits under the 48 
Plans. participating plans. In no event, including dissolution, will the shall any assets of the trust 49 
fund Benefit Trust be distributed to any entity that is not a state, a political subdivision of a state, 50 
or another entity the income of which is excludable from its gross income by application of 51  General Assembly Of North Carolina 	Session 2025 
Page 4  House Bill 477-First Edition 
section 115(1) of the Internal Revenue Code. The assets of the Benefit Trust are not subject to 1 
the claims of creditors of the employers and non employers any of the following: 2 
(1) An employer or nonemployer making contributions to the Trust, are not 3 
subject to the claims of any creditors of the Trust, trustees, and administrators, 4 
and are not subject to the claims of creditors of members, participants, and 5 
beneficiaries.Benefit Trust. 6 
(2) A trustee or administrator of the Benefit Trust. 7 
(3) A member. 8 
(4) Participants or beneficiaries of any participating plan. 9 
(d) Contributions. – Employer and non employer nonemployer contributions to the North 10 
Carolina Teachers' and State Employees' Benefit Trust and earnings on those contributions are 11 
irrevocable. 12 
"§ 135-155.  Death Benefit Plan established. 13 
(a) Death Benefit Plan. Plan for State Employees and Retirees. – There is hereby created 14 
a Group Life Insurance Plan (hereinafter called the "Plan") which is established as the Death 15 
Benefit Plan for State Employees and Retirees, a group life insurance plan that is an employee 16 
welfare benefit plan that is separate and apart from the Retirement System and under which the 17 
members of the Retirement System shall participate and be eligible for group life insurance 18 
benefits.System. 19 
(b) Benefit Trust. – The Death Benefit Plan shall be part of the North Carolina Teachers' 20 
and State Employees' Benefit Trust, as established under G.S. 135-7(g). Trust. All receipts, 21 
transfers, appropriations, contributions, investment earnings, and other income belonging to the 22 
Death Benefit Plan shall be deposited in the Benefit Trust. All benefits and expenses against the 23 
Death Benefit Plan shall be disbursed from the Benefit Trust. 24 
"§ 135-160.  Administration of Death Benefit Plan. 25 
(a) Provisions Applicable. – The Death Benefit Plan is administered by the Board of 26 
Trustees. The provisions of the Retirement System pertaining to Administration, G.S. 135-6, and 27 
management of funds, G.S. 135-7, are hereby made G.S. 135-6 and G.S. 135-7 are applicable to 28 
the Death Benefit Plan. 29 
(b) Effect of Vote Related to Contributory Death Benefit. – No decision of the Board of 30 
Trustees related to the Contributory Death Benefit fully contributory death benefit for retirees 31 
provided for under this Chapter, Chapter 120, or Chapter 127A of the General Statutes, any of 32 
the following shall take effect unless and until this same decision has been made and voted on 33 
by the Board of Trustees of the Local Governmental Employees Retirement System.System: 34 
(1) G.S. 120-4.27. 35 
(2) G.S. 135-64. 36 
(3) G.S. 134-166.60. 37 
(c) Rulemaking. – The Board of Trustees may adopt temporary or permanent rules, as 38 
necessary, for all aspects of administration of this Article. 39 
"§ 135-165.  Death benefit for in-service members. 40 
(a) Eligibility. – A member who is not retired and who has completed at least one full 41 
year of membership in the Retirement System is a participant in, and eligible for death benefits 42 
under, the Death Benefit Plan in accordance with this section. 43 
(b) Benefits Upon Death While in Service. – If a member eligible for benefits under this 44 
section dies while in service, then, upon receipt of proof, proof of the death that is satisfactory to 45 
the Board of Trustees in their capacity as trustees under the Group Life Insurance Plan, of the 46 
death, in service, of a member who had completed at least one full calendar year of membership 47 
in the Retirement System, there Trustees, a lump sum death benefit amount shall be paid to such 48 
person as the member shall have nominated by electronic submission in a form approved by the 49 
Board of Trustees or by written designation duly acknowledged and filed with the Board of 50  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 5 
Trustees, if such person is living at the time of the member's death, otherwise to the member's 1 
legal representatives, a death benefit.paid. 2 
(c) Such death Death Benefit Amount. – Subject to a minimum of twenty-five thousand 3 
dollars ($25,000) and to a maximum of fifty thousand dollars ($50,000), the lump sum death 4 
benefit shall be amount payable under this section is equal to the greater of:of the following 5 
amounts: 6 
(1) The compensation on which contributions to the Retirement System were 7 
made by the member during the calendar year preceding the year in which his 8 
the member's death occurs, oroccurred. 9 
(2) The greatest compensation on which contributions to the Retirement System 10 
were made by the member during a 12-month period of service within the 11 
24-month period of service ending on the last day of the month preceding the 12 
month in which his the member's last day of actual service occurs; 13 
subject to a minimum of twenty-five thousand dollars ($25,000) and to a maximum 14 
of fifty thousand dollars ($50,000).occurred. 15 
(d) Members Deemed to be in Service. – For the purpose of the Plan, this section, a 16 
member shall be deemed to be in service at the date of his the member's death if his the death 17 
occurs within 180 days from the last day of his actual service.service, as determined in 18 
accordance with G.S. 135-170. 19 
"§ 135-170.  Last day of actual service; death benefit for in-service members. 20 
To determine the last day of actual service for the purposes of the death benefit for in-service 21 
members, all of the following apply: 22 
(1) When the employee has not been terminated, Uninterrupted service. – For a 23 
member with uninterrupted service, the last day of actual service is the date 24 
on which an absent member's sick and annual leave expire, unless the member 25 
is on an approved leave of absence and is deemed to be in service under the 26 
provisions of G.S. 135-4(h). If a member is deemed to be in service under 27 
G.S. 135-4(h), then the last day of actual service is the last day for which the 28 
member made a contribution to the Retirement System. 29 
(2) Interrupted service. – All of the following apply to a member whose service 30 
has been interrupted: 31 
a. When a member's For a member whose service is interrupted by reason 32 
of service in the Uniformed Services, as that term is defined in section 33 
4303(16) of the Uniformed Services Employment and Reemployment 34 
Rights Act, Public Law 103-353, and the participant member does not 35 
return immediately after that service to employment with a covered 36 
employer in this the Retirement System, the last day of actual service 37 
is the date on which the participant member was first eligible to be 38 
separated or released from his or her involuntary military service. 39 
b. For a period when a member who is on an approved leave of absence, 40 
his status with respect to the death benefit will be determined by the 41 
provisions of G.S. 135-4(h).but is not deemed to be in service under 42 
G.S. 135-4(h), the last day of actual service is either the last day for 43 
which the member made a contribution to the Retirement System or 44 
the date on which the member's sick and annual leave expired, 45 
whichever is later. 46 
c. A member on leave of absence from his a position as a teacher or State 47 
employee for the purpose of serving as a member or officer of the 48 
North Carolina General Assembly shall be deemed to be in service 49 
during sessions of the General Assembly and thereby covered by the 50 
provisions of the death benefit. The eligible for the death benefit under 51  General Assembly Of North Carolina 	Session 2025 
Page 6  House Bill 477-First Edition 
G.S. 135-165. The last day of actual service shall be the most recent 1 
legislative day of the applicable General Assembly session or the last 2 
day the member performed work as a teacher or State employee, 3 
whichever is later. Notwithstanding G.S. 135-165(c), the amount of 4 
the death benefit for such a member who is on a leave of absence due 5 
to General Assembly service shall be the equivalent of the salary to 6 
which the member would have been entitled as a teacher or State 7 
employee during the 12-month period immediately prior to the month 8 
in which death occurred, not to be less than subject to a minimum of 9 
twenty-five thousand dollars ($25,000) nor to exceed and a maximum 10 
of fifty thousand dollars ($50,000). 11 
d. All of the following apply for a member who is either (i) receiving 12 
workers' compensation benefits during the period for which the 13 
member would have been otherwise eligible to receive short-term 14 
benefits or extended short-term benefits under G.S. 135-105 or (ii) a 15 
beneficiary under the Disability Income Plan: 16 
1. If the date the member last performed work as a teacher or 17 
State employee occurred within 180 days of the date the 18 
member died, then the last day of actual service is the last day 19 
the member performed that work. 20 
2. If the date the member last performed worked as a teacher or 21 
State employee occurred more than 180 days from the date the 22 
member died, then that member shall not be deemed in active 23 
service for the purposes of G.S. 135-165. 24 
(3) When the employee Terminated service. – For a member whose employment 25 
has been terminated, terminated for reasons other than retirement, whether by 26 
the employer or the employee, the last day of actual service is the last day the 27 
member actually worked.performed work as a teacher or State employee. 28 
"§ 135-175.  Fully contributory death benefit for retired members. 29 
(a) Participation and Premiums. – All retired members may elect to participate in the 30 
Death Benefit Plan and therefore become eligible to receive death benefits under the Death 31 
Benefit Plan in accordance with this section. Elections shall be made prior to death and no later 32 
than 60 calendar days from the effective date of the member's retirement. Elections shall be 33 
received by the Board of Trustees prior to the death of the retired member. Retired members 34 
electing to receive a fully contributory death benefit under the Death Benefit Plan shall 35 
continuously pay monthly premiums on a fully contributory basis, as determined by the Board 36 
of Trustees, to the Benefit Trust. Premium payments shall be made through retirement allowance 37 
deductions or other methods adopted by the Board of Trustees. 38 
(b) Benefits Upon Death. – If a retired member who has elected to receive a fully 39 
contributory death benefit under to this section dies, then, upon receipt of proof, proof of the 40 
death that is satisfactory to the Board of Trustees in its capacity under this subsection, of the 41 
death of a retired member of the Retirement System on or after January 1, 2015, there Trustees, 42 
a lump sum death benefit amount shall be paid a death benefit to the person or persons designated 43 
by the member or, if not survived by a designated beneficiary, to the deceased retired member's 44 
legal representative; provided the retired member has elected, when first eligible, to make, and 45 
has continuously made, in advance of the member's death required contributions as determined 46 
by the Board of Trustees on a fully contributory basis, through retirement allowance deductions 47 
or other methods adopted by the Board of Trustees, to a group death benefit trust fund, the North 48 
Carolina Teachers' and State Employees' Benefit Trust, administered by the Board of Trustees 49 
Fund and Pension Accumulation Fund.paid. 50  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 7 
(c) This Death Benefit Amount. – The lump sum death benefit payable under this section 1 
shall be a lump-sum payment in the amount of one of the following amounts: 2 
(1) If the death occurred on or after the first day of the twenty-fifth month of 3 
coverage under this section, the amount payable is ten thousand dollars 4 
($10,000) upon the completion of 24 months of contributions required under 5 
this subsection. Should death occur ($10,000). 6 
(2) If the death occurred before the completion of 24 months of contributions 7 
required under this subsection, the deceased retired member's designated 8 
beneficiary or beneficiaries, or legal representative if not survived by a 9 
designated beneficiary, shall be paid first day of the twenty-fifth month of 10 
coverage under this section, the amount payable is the sum of the retired 11 
member's contributions required by this subsection premium payments made 12 
in accordance with this section plus interest in an amount to be determined by 13 
the Board of Trustees. 14 
"§ 135-180.  Death benefits; workers' compensation benefits and Disability Income Plan 15 
beneficiaries. 16 
(a) Eligibility. – A member who is a beneficiary of the Disability Income Plan provided 17 
for in Article 6 of this Chapter, or a member who is in receipt of Workers' Compensation workers' 18 
compensation benefits during the period for which he or she the member would have otherwise 19 
been eligible to receive short-term benefits or extended short-term benefits and as provided in 20 
G.S. 135-105 benefits under G.S. 135-105 is eligible for death benefits under the Death Benefit 21 
Plan in accordance with this section if all of the following criteria are met: 22 
(1) The member is not retired. 23 
(2) The member is not eligible for death benefits under G.S. 135-165. 24 
(3) The member dies on or after 181 days from the last day of his or her actual 25 
service the member performed work as a teacher or State employee but prior 26 
to the date the workers' compensation benefits or benefits as provided in 27 
G.S. 135-105 under the Disability Income Plan would have ended, shall be 28 
eligible for group life insurance benefits as provided in this subsection, 29 
notwithstanding that the member is no longer an employee or teacher or that 30 
the member's death occurs after the eligibility period after active 31 
service.ended. 32 
(b) Benefits Upon Death. – Upon receipt of proof of the death of a member eligible for 33 
benefits under subsection (a) of this section that is satisfactory to the Board of Trustees, a lump 34 
sum death benefit amount shall be paid. 35 
(c) Benefit Amount. – The basis of the death benefit payable hereunder under this section 36 
shall be the higher of the death benefit computed as above amount calculated in accordance with 37 
G.S. 135-165(c) or a the death benefit amount based on compensation used in computing the 38 
benefit payable under G.S. 135-105 and G.S. 135-106, as may be adjusted for percentage 39 
post-disability increases, all subject to but shall not exceed the maximum dollar limitation as 40 
provided above.for the death benefit for in-service members under G.S. 135-165. 41 
(d) Exceptions. – A member in receipt of benefits from the Disability Income Plan under 42 
the provisions of G.S. 135-112 whose right to a benefit accrued under the former Disability 43 
Salary Continuation Plan shall not be covered under the provisions of this paragraph.entitled to 44 
benefits under the Death Benefit Plan under this Article. 45 
"§ 135-185.  Beneficiaries under the Death Benefit Plan. 46 
(a) Designation. – A member shall designate a beneficiary or beneficiaries for each 47 
applicable benefit payable under this Article by electronic submission in a form approved by the 48 
Board of Trustees or by written designation duly acknowledged and filed with the Board of 49 
Trustees. 50  General Assembly Of North Carolina 	Session 2025 
Page 8  House Bill 477-First Edition 
(b) Benefits Payable. – Each applicable benefit payable under this Article shall be paid 1 
to the designated beneficiary or beneficiaries to receive the benefit. If no beneficiaries are 2 
designated or living at the time of the member's death, then the benefit shall be paid to the 3 
member's legal representative. 4 
"§ 135-190.  Reciprocity of Death Benefit Plan. 5 
(a) Reciprocity of Death Benefit Plan. – Only for the purpose of determining eligibility 6 
for the death benefit benefits provided for in subsection (l) of this section, under this Article, 7 
membership service standing to the credit of (i) a member of the Legislative Retirement System 8 
or the Consolidated Judicial Retirement System or (ii) a retired member of the Legislative 9 
Retirement System or the Consolidated Judicial Retirement System whose retirement benefit was 10 
suspended upon entrance into membership in the Teachers' and State Employees' Retirement 11 
System shall be added to the membership service standing to the credit of a member of the 12 
Teachers' and State Employees' Retirement System. However, in the event that a participant or 13 
beneficiary is a retired member of the Legislative Retirement System or the Consolidated Judicial 14 
Retirement System whose retirement benefit was suspended upon entrance into membership in 15 
the Teachers' and State Employees' Retirement System, such membership service standing to the 16 
credit of the retired member prior to retirement shall be likewise counted. 17 
(b) Prohibitions. – Membership service under this section shall not be counted twice for 18 
the same period of time. 19 
"§ 135-195.  Accumulated contributions separate. 20 
Such death benefit Death benefit amounts payable under this Article shall be payable apart 21 
and separate from the payment of the member's accumulated contributions under the Retirement 22 
System on his the member's death pursuant to the provisions of subsection (f) of this 23 
section.G.S. 135-5. 24 
"§ 135-200.  Benefits disallowed under this Article. 25 
In Notwithstanding anything in this Article to the contrary, no event shall a death benefit 26 
provided for in G.S. 135-5(l) under this Article shall be paid at the death of a member if a death 27 
benefit is paid related to that member under G.S. 135-63." 28 
 29 
PART II. TECHNICAL R ECODIFICATION AND ST ANDARDIZATION OF THE 30 
DEATH BENEFIT PLAN F OR MEMBERS OF THE LO CAL GOVERNMENTAL 31 
EMPLOYEES' RETIREMEN T SYSTEM 32 
SECTION 4.(a) Article 3 of Chapter 128 of the General Statutes is amended to add 33 
a new Part 1 to be entitled "Local Governmental Employees Retirement System" consisting of 34 
G.S. 128-21 through G.S. 128-38.29. 35 
SECTION 4.(a1) Article 3 of Chapter 128 of the General Statutes is amended to add 36 
a new Part 2 to be entitled "Local Governmental Death Benefit Plan" that consists of the 37 
following new sections: 38 
(1) G.S. 128-38.30. 39 
(2) G.S. 128-38.31. 40 
(3) G.S. 128-38.35. 41 
(4) G.S. 128-38.36. 42 
(5) G.S. 128-38.40. 43 
(6) G.S. 128-38.45. 44 
(7) G.S. 128-38.46. 45 
SECTION 4.(b) The caption and the second sentence of G.S. 128-27(l) are 46 
recodified as subsection (a) of G.S. 128-38.30. 47 
SECTION 4.(c) The third, fourth, and fifth sentences of the first paragraph of 48 
G.S. 128-27(l) are recodified as subsection (b) of G.S. 128-38.30. 49 
SECTION 4.(d) The seventh paragraph of G.S. 128-27(l) is recodified as subsection 50 
(a) of G.S. 128-38.31. 51  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 9 
SECTION 4.(d1) G.S. 128-28(f1) is recodified as subsection (b) of G.S. 128-38.31. 1 
SECTION 4.(e) The first sentence of the first paragraph of G.S. 128-27(l) is 2 
recodified as the first sentence of subsection (a) of G.S. 128-38.35. 3 
SECTION 4.(f) The first sentence of G.S. 128-27(l1) is recodified as the second 4 
sentence of subsection (a) of G.S. 128-38.35. 5 
SECTION 4.(g) The first sentence of the second paragraph of G.S. 128-27(l) is 6 
recodified as subsection (b) of G.S. 128-38.35. 7 
SECTION 4.(h) The second sentence of the second paragraph of G.S. 128-27(l) is 8 
recodified as subsection (c) of G.S. 128-38.35. 9 
SECTION 4.(i) The fourth sentence of the second paragraph of G.S. 128-27(l) is 10 
recodified as subsection (d) of G.S. 128-38.35. 11 
SECTION 4.(j) Sub-subdivision a. of subdivision (2) of the sixth paragraph of 12 
G.S. 128-27(l) is recodified as subdivision (3) of G.S. 128-38.36. 13 
SECTION 4.(k) Sub-subdivision b. of subdivision (2) of the sixth paragraph of 14 
G.S. 128-27(l) is recodified as subdivision (1) of G.S. 128-38.36. 15 
SECTION 4.(l) Sub-subdivision c. of subdivision (2) of the sixth paragraph of 16 
G.S. 128-27(l) is recodified as sub-subdivision a. of subdivision (2) of G.S. 128-38.36. 17 
SECTION 4.(m) Subdivision (3) of the sixth paragraph of G.S. 128-27(l) is 18 
recodified as sub-subdivision b. of subdivision (2) of G.S. 128-38.36. 19 
SECTION 4.(n) Subdivision (4) of the sixth paragraph of G.S. 128-27(l) is 20 
recodified as sub-subdivision c. of subdivision (2) of G.S. 128-38.36. 21 
SECTION 4.(o) The first sentence of the first paragraph of G.S. 128-27(l6) is 22 
recodified as subsection (b) of G.S. 128-38.40. 23 
SECTION 4.(p) The second paragraph of G.S. 128-27(l6) is recodified as subsection 24 
(c) of G.S. 128-38.40. 25 
SECTION 4.(q) The third sentence of the second paragraph of G.S. 128-27(l) is 26 
recodified as G.S. 128-38.46. 27 
SECTION 5.(a) The remainder of subsections (l), (l1), and (l6) of G.S. 128-27 not 28 
recodified by Section 4 of this act are repealed. 29 
SECTION 5.(b) Subsections (l2), (l3), (l4), and (l5) of G.S. 128-27 are repealed. 30 
SECTION 6.(a) G.S. 128-21 reads as rewritten: 31 
"§ 128-21.  Definitions. 32 
The following words and phrases as used definitions apply in this Article, unless a different 33 
meaning is plainly required by the context, shall have the following meanings:context: 34 
… 35 
(6a) "Benefit Trust" means the North Carolina Teachers' and State Employees' 36 
Benefit Trust under G.S. 135-154. 37 
… 38 
(8a) "Death Benefit Plan" means the Local Governmental Death Benefit Plan 39 
established under Part 2 of this Article. 40 
(8b) "Duly acknowledged" means notarized, including electronic notarization, or 41 
verified through an identity authentication service approved by the 42 
Department of State Treasurer. 43 
…." 44 
SECTION 6.(b) Part 2 of Article 3 of Chapter 128 of the General Statutes, as created 45 
by Section 4 of this act, reads as rewritten: 46 
"Part 2. Local Governmental Death Benefit Plan. 47 
"§ 128-38.30.  Death Benefit Plan established. 48 
(a) Death Benefit Plan. – There is hereby created a Group Life Insurance Plan (hereinafter 49 
called the "Plan") which is established as the Local Governmental Death Benefit Plan, a group 50 
life insurance plan that is an employee welfare benefit plan that is separate and apart from the 51  General Assembly Of North Carolina 	Session 2025 
Page 10  House Bill 477-First Edition 
Retirement System and under which the members of the Retirement System shall participate and 1 
be eligible for group life insurance benefits.System. 2 
(b) Benefit Trust. – The Death Benefit Plan shall be part of the North Carolina Teachers' 3 
and State Employees' Benefit Trust, as established under G.S. 135-7(g). Trust. All receipts, 4 
transfers, appropriations, contributions, investment earnings, and other income belonging to the 5 
Death Benefit Plan shall be deposited in the Benefit Trust. All benefits and expenses against the 6 
Death Benefit Plan shall be disbursed from the Benefit Trust. 7 
"§ 128-38.31.  Administration of Death Benefit Plan. 8 
(a) Provisions Applicable. – The Death Benefit Plan is administered by the Board of 9 
Trustees. The provisions of the Retirement System pertaining to administration, G.S. 128-28, and 10 
management of funds, G.S. 128-29, are hereby made G.S. 128-28 and G.S. 128-29 are applicable 11 
to the Death Benefit Plan. 12 
(b) Effect of Vote Related to Contributory Death Benefit. – No decision of the Board of 13 
Trustees related to the Contributory Death Benefit fully contributory death benefit for retirees 14 
provided for under this Article Part shall take effect unless and until this same decision has been 15 
made and voted on by the Board of Trustees of the Teachers' and State Employees' Retirement 16 
System. 17 
(c) Rulemaking. – The Board of Trustees may adopt temporary or permanent rules, as 18 
necessary, for all aspects of administration of this Part. 19 
"§ 128-38.35.  Death benefit for in-service members. 20 
(a) The provisions of this subsection shall become effective for any employer only after 21 
Participation. – Benefits under this section are only available to an otherwise eligible in-service 22 
member if that member's employer has opted to participate in the Death Benefit Plan or if the 23 
member is a law enforcement officer. All of the following apply: 24 
(1) If an employer elects to participate in the Death Benefit Plan with regards to 25 
in-service members who are not law enforcement officers employed by the 26 
employer, then an agreement to that effect has been shall be executed by the 27 
employer and the Executive Director of the Retirement System. Under all 28 
requirements and conditions as otherwise provided for in subsection (l) of this 29 
section, except for the requirement that the provisions are effective only after 30 
an agreement has been executed by the employer and the Executive Director 31 
of the Retirement Systems Division, Participation in, and eligibility for death 32 
benefits under, the Death Benefit Plan in accordance with this section shall be 33 
begin only after this agreement has been executed. 34 
(2) Employers are required to participate in the Death Benefit Plan with regard to 35 
all law enforcement officers employed by the employer who are members of 36 
the Retirement System shall participate and be eligible for group life insurance 37 
benefits under the Group Life Insurance Plan, and employers shall fund the 38 
cost of these benefits. 39 
(a1) Eligibility. – Subject to employer participation in the Death Benefit Plan for members 40 
who are not law enforcement officers, a member who has not retired and who has completed at 41 
least one full year of membership in the Retirement System is a participant in, and eligible for 42 
the death benefits under, the Death Benefit Plan in accordance with this section. 43 
(b) Benefits Upon Death While in Service. – If a member eligible for benefits under this 44 
section dies while in service, then, upon receipt of proof, proof of the death that is satisfactory to 45 
the Board of Trustees in their capacity as trustees under the Group Life Insurance Plan, of the 46 
death, in service, of a member who had completed at least one full calendar year of membership 47 
in the Retirement System, there Trustees, a lump sum death benefit amount shall be paid to such 48 
person as the member shall have nominated by electronic submission in a form approved by the 49 
Board of Trustees or by written designation duly acknowledged and filed with the Board of 50  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 11 
Trustees, if such person is living at the time of the member's death, otherwise to the member's 1 
legal representatives, a death benefit.paid. 2 
(c) Such death Death Benefit Amount. – Subject to a minimum of twenty-five thousand 3 
dollars ($25,000) and to a maximum of fifty thousand dollars ($50,000), the lump sum death 4 
benefit shall be amount payable under this section is equal to the greater of:of the following 5 
amounts: 6 
(1) The compensation on which contributions to the Retirement System were 7 
made by the member during the calendar year preceding the year in which his 8 
the member's death occurs, oroccurred. 9 
(2) The greatest compensation on which contributions to the Retirement System 10 
were made by the member during a 12-month period of service within the 11 
24-month period of service ending on the last day of the month preceding the 12 
month in which his the member's last day of actual service occurs; 13 
subject to a minimum of twenty-five thousand dollars ($25,000) and a 14 
maximum of fifty thousand dollars ($50,000).occurred. 15 
(d) Members Deemed to be in Service. – For the purpose of the Plan, section, a member 16 
shall be deemed to be in service at the date of his the member's death if his the death occurs 17 
within 180 days from the last day of his actual service.service, as determined in accordance with 18 
G.S. 128-38.36. 19 
"§ 128-38.36.  Last day of actual service; death benefit for in-service members. 20 
To determine the last day of actual service for the purposes of a death benefit for in-service 21 
members, all of the following apply: 22 
(1) When the employee has not been terminated, Uninterrupted service. – For 23 
members with uninterrupted service, the last day of actual service is the date 24 
on which an absent member's sick and annual leave expire.expire unless the 25 
member is on an approved leave of absence and is deemed to be in service 26 
under G.S. 128-26(g). If a member is deemed to be in service under 27 
G.S. 128-26(g), then the last day of actual service is the last day for which the 28 
member made a contribution to the Retirement System. 29 
(2) Interrupted service. – All of the following apply to a member whose service 30 
has been interrupted: 31 
a. When a member's For a member whose service is interrupted by reason 32 
of service in the Uniformed Services, as that term is defined in section 33 
4303(16) of the Uniformed Services Employment and Reemployment 34 
Rights Act, Public Law 103-353, and the participant member does not 35 
return immediately after that service to employment with a covered 36 
employer in this the Retirement System, the last day of actual service 37 
is the date on which the participant member was first eligible to be 38 
separated or released from his or her involuntary military service. 39 
b. For a period when a member who is on an approved leave of absence, 40 
his status with respect to the death benefit will be determined by the 41 
provisions of G.S. 128-26(g).but who is not deemed to be in service 42 
under G.S. 128-26(g), the last day of actual service is either the last 43 
day for which the member made a contribution to the Retirement 44 
System or the date on which the member's sick and annual leave 45 
expired, whichever is later. 46 
c. A member on leave of absence from his a position as a local 47 
governmental employee for the purpose of serving as a member or 48 
officer of the North Carolina General Assembly shall be deemed to be 49 
in service during sessions of the General Assembly and thereby 50 
covered by the provisions of the death benefit, if applicable. The 51  General Assembly Of North Carolina 	Session 2025 
Page 12  House Bill 477-First Edition 
eligible for the death benefit under G.S. 128-38.35. The last day of 1 
actual service shall be the most recent legislative day of the applicable 2 
General Assembly session or the last day the member performed work 3 
as a local governmental employee, whichever is later. Notwithstanding 4 
G.S. 128-38.35(c), the amount of the death benefit for such a member 5 
who is on a leave of absence due to General Assembly service shall be 6 
the equivalent of the salary to which the member would have been 7 
entitled as a local governmental employee during the 12-month period 8 
immediately prior to the month in which death occurred, not to be less 9 
than subject to a minimum of twenty-five thousand dollars ($25,000) 10 
nor to exceed and a maximum of fifty thousand dollars ($50,000). 11 
(3) When the employee Terminated service. – For a member whose employment 12 
has been terminated, terminated for reasons other than retirement, whether by 13 
the employer or the employee, the last day of actual service is the last day the 14 
member actually worked.performed work as a local governmental employee. 15 
"§ 128-38.40.  Fully contributory death benefit for retired members. 16 
(a) Participation and Premiums. – All retired members may elect to participate in the 17 
Death Benefit Plan and therefore become eligible to receive death benefits under the Death 18 
Benefit Plan in accordance with this section. Elections shall be made prior to death and no later 19 
than 60 calendar days from the effective date of the member's retirement. Elections shall be 20 
received by the Board of Trustees prior to the death of the retired member. Retired members 21 
electing to receive a fully contributory death benefit under the Death Benefit Plan shall 22 
continuously pay monthly premiums on a fully contributory basis, as determined by the Board 23 
of Trustees, to the North Carolina Teachers' and State Employees' Benefit Trust established under 24 
G.S. 135-7(g). Premium payments shall be made through retirement allowance deductions or 25 
other methods adopted by the Board of Trustees. 26 
(b) Benefits Upon Death. – If a retired member who has elected to receive a fully 27 
contributory death benefit under this section dies, then, upon receipt of proof, proof of the death 28 
that is satisfactory to the Board of Trustees in its capacity under this subsection, of the death of 29 
a retired member of the Retirement System on or after January 1, 2015, there Trustees, a lump 30 
sum death benefit amount shall be paid a death benefit to the person or persons designated by the 31 
member or, if not survived by a designated beneficiary, to the deceased retired member's legal 32 
representative; provided the retired member has elected, when first eligible, to make, and has 33 
continuously made, in advance of the member's death required contributions as determined by 34 
the Board of Trustees on a fully contributory basis, through retirement allowance deductions or 35 
other methods adopted by the Board of Trustees, to a group death benefit trust fund, the North 36 
Carolina Teachers' and State Employees' Benefit Trust, administered by the Board of Trustees 37 
separate and apart from the Retirement System's Annuity Savings Fund and Pension 38 
Accumulation Fund.paid. 39 
(c) The Death Benefit Amount. – The lump sum death benefit payable under this 40 
subsection section shall be a lump-sum payment in the amount of one of the following amounts: 41 
(1) If the death occurred on or after the first day of the twenty-fifth month of 42 
coverage under this section, then the amount payable is ten thousand dollars 43 
($10,000) upon the completion of 24 months of contributions required under 44 
this subsection. Should death occur ($10,000). 45 
(2) If the death occurred before the completion of 24 months of contributions 46 
required under this subsection, the deceased retired member's designated 47 
beneficiary or beneficiaries, or legal representative if not survived by a 48 
designated beneficiary, shall be paid first day of the twenty-fifth month of 49 
coverage under this section, then the amount payable is the sum of the retired 50 
member's contributions required by this subsection premium payments made 51  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 13 
in accordance with this section plus interest in an amount to be determined by 1 
the Board of Trustees. 2 
"§ 128-45.  Beneficiaries under the Death Benefit Plan. 3 
(a) Designation. – A member shall designate a beneficiary or beneficiaries for each 4 
applicable benefit payable under this Part by electronic submission in a form approved by the 5 
Board of Trustees or by written designation duly acknowledged and filed with the Board of 6 
Trustees. 7 
(b) Benefits Payable. – Each applicable benefit payable under this Part shall be paid to 8 
the designated beneficiary or beneficiaries to receive the benefit. If no beneficiaries are 9 
designated or living at the time of the member's death, then the benefit shall be paid to the 10 
member's legal representative. 11 
"§ 128-38.46.  Accumulated contributions separate. 12 
Such death benefit Death benefit amounts payable under this Part shall be payable apart and 13 
separate from the payment of the member's accumulated contributions under the Retirement 14 
System on his the member's death pursuant to the provisions of subsection (f) of this 15 
section.G.S. 128-27(f)." 16 
 17 
PART III. STANDARDIZATION OF DEATH BENEF ITS FOR MEMBERS OF T HE 18 
CONSOLIDATED JUDICIA L RETIREMENT SYSTEM 19 
SECTION 7.(a) G.S. 135-53 is amended by adding a new subdivision to read: 20 
"(3a) "Benefit Trust" means the North Carolina Teachers' and State Employees' 21 
Benefit Trust under G.S. 135-154." 22 
SECTION 7.(b) G.S. 135-52 is amended by adding a new subsection to read: 23 
"(c) Fully contributory death benefits under this Article are established as a group life 24 
insurance plan that is an employee welfare benefit plan that is separate and apart from the 25 
Retirement System and administered by the Board of Trustees. Fully contributory death benefits 26 
for retirees under this Article are part of the Benefit Trust. All receipts, transfers, appropriations, 27 
contributions, investment earnings, and other income associated with the fully contributory death 28 
benefits for retirees under this Article shall be deposited in the Benefit Trust. All benefits and 29 
expenses against the fully contributory death benefits for retirees under this Article shall be 30 
disbursed from the Benefit Trust." 31 
SECTION 7.(c) Subsections (b) and (d) of G.S. 135-63 are repealed. 32 
SECTION 7.(d) G.S. 135-63, as amended by subsection (c) of this section, reads as 33 
rewritten: 34 
"§ 135-63.  Benefits on death before retirement. 35 
(a) Upon In-Service Benefit. – If a member who has completed at least one year of 36 
membership service dies while in service, then, upon receipt of proof, proof of the death that is 37 
satisfactory to the Board of Trustees, of the death of a member in service, there shall be paid in 38 
a lump sum death benefit shall be paid to such person as the beneficiary or beneficiaries that the 39 
member shall have nominated designated by electronic submission in a form approved by the 40 
Board of Trustees or by written designation duly acknowledged and filed with the Board of 41 
Trustees, if such person is Trustees. If no beneficiaries are designated or living at the time of the 42 
member's death, otherwise then the death benefit shall be paid to the member's legal 43 
representatives, a representative. The amount of the death benefit payable under this subsection 44 
is equal to the sum of (i) the member's accumulated contributions, plus (ii) the member's final 45 
compensation; provided, however, that if the member has attained his or her fiftieth birthday with 46 
at least five years of membership service at the member's date of death, and if the designated 47 
recipient of the death benefits is the compensation, unless a member's surviving spouse who 48 
survives him or her, and if the spouse so elects, is eligible for and elects to receive a survivor's 49 
alternate benefit under subsection (a1) of this section. 50  General Assembly Of North Carolina 	Session 2025 
Page 14  House Bill 477-First Edition 
(a1) Survivor's Alternate Benefit. – The surviving spouse of a member who was age 50 or 1 
older with at least five years of membership service at the time of death may elect a survivor's 2 
alternate benefit. If the surviving spouse elects a survivor's alternate benefit, then the lump-sum 3 
death benefit provided for herein under subsection (a) of this section shall consist only of a 4 
payment equal to the member's final compensation and there shall be paid to the surviving spouse 5 
an annual retirement allowance, payable monthly, which monthly. The monthly payments shall 6 
commence on the first day of the calendar month coinciding with or next following the death of 7 
the member and shall be continued member. All of the following apply to the survivor's alternate 8 
benefit: 9 
(1) The survivor's alternate benefit shall continue on the first day of each month 10 
thereafter until the remarriage or death of the spouse. 11 
(2) The amount of any such the survivor's alternate benefit retirement allowance 12 
shall be equal to one half of the amount of the retirement allowance to which 13 
the member would have been entitled had the member retired under the 14 
provisions of G.S. 135-57(a) on the first day of the calendar month coinciding 15 
with or next following the member's date of death, reduced by two percent 16 
(2%) thereof for each full year, if any, by which the age of the member at his 17 
or her date of death exceeds that of the member's spouse. 18 
(3) If the retirement allowance to the spouse shall terminate terminates on the 19 
remarriage or death of the spouse before the total of the retirement allowance 20 
payments made equals the amount of the member's accumulated contributions 21 
at date of death, then the excess of such those accumulated contributions over 22 
the total of the retirement allowances paid to the spouse shall be paid in a lump 23 
sum to such person as the beneficiary or beneficiaries the member shall have 24 
nominated designated by electronic submission in a form approved by the 25 
Board of Trustees or by written designation duly acknowledged and filed with 26 
the Board of Trustees, if such person is Trustees. If no beneficiary is 27 
designated or living at the time such payment falls due, otherwise the lump 28 
sum payment becomes due under this subdivision, then the lump sum payment 29 
shall be made to the former member's legal representatives. 30 
… 31 
(c) Not in Service Benefit. – Upon receipt of proof, satisfactory to the Board of Trustees, 32 
of the death of a member not in service, there shall be paid in a lump sum to such person as the 33 
beneficiary that the member shall have nominated designated by electronic submission in a form 34 
approved by the Board of Trustees or by written designation duly acknowledged and filed with 35 
the Board of Trustees, if such person is Trustees. If no beneficiary is designated or living at the 36 
time of the member's death, otherwise the lump sum death benefit shall be paid to the member's 37 
legal representatives, a representatives. The lump sum death benefit payable under this 38 
subsection is equal to the member's accumulated contributions. 39 
…." 40 
SECTION 7.(e) Subsections (f) through (j) of G.S. 135-64 are repealed. 41 
SECTION 7.(f) G.S. 135-64, as amended by subsection (e) of this section, reads as 42 
rewritten: 43 
"§ 135-64.  Benefits on death after retirement. 44 
(a) In the event of the death of If a former member while in receipt of dies after a service 45 
retirement allowance pursuant to his retirement under the provisions of G.S. 135-57, G.S. 135-57 46 
or after a the former member's sixty-fifth birthday while in receipt of a retirement allowance 47 
pursuant to his retirement under the provisions of after a disability retirement under G.S. 135-59, 48 
then there shall be paid to the former member's surviving spouse, if any, an annual retirement 49 
allowance, payable monthly, which monthly. The monthly payments shall commence on the first 50 
day of the calendar month next following the date of death of the former member and shall be 51  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 15 
continued on the first day of each month thereafter until the remarriage or death of the spouse. 1 
The amount of any such the retirement allowance under this subsection shall be equal to one half 2 
of the allowance that was payable to the former member for the month immediately prior to his 3 
the member's month of death, or which that would have been so payable had an optional mode 4 
of payment not been elected under the provisions of G.S. 135-61, reduced by two percent (2%) 5 
thereof for each full year, if any, by which the age of the former member at date of death exceeds 6 
that of his the spouse. 7 
(b) In the event of the death of If a former member dies prior to his the former member's 8 
sixty-fifth birthday while in receipt of a after a disability retirement allowance pursuant to his 9 
retirement under the provisions of G.S. 135-59, then there shall be paid to the former member's 10 
surviving spouse, if any, an annual retirement allowance, payable monthly, which monthly. The 11 
monthly payments shall commence on the first day of the calendar month next following the date 12 
of death of the former member and shall be continued on the first day of each month thereafter 13 
until the remarriage or death of the spouse. The amount of any such the retirement allowance 14 
under this subsection shall be equal to one half of the allowance to which the former member 15 
would have been entitled under the provisions of G.S. 135-58 if he the member had remained in 16 
service from his the disability retirement date to his the date of death with no change in his the 17 
former member's final compensation or status and had then retired, reduced by two percent (2%) 18 
thereof for each full year, if any, by which the age of the former member at date of death exceeds 19 
that of his the spouse. 20 
(c) In the event of the death of If a former member dies while in receipt of a retirement 21 
allowance under the provisions of G.S. 135-58, 135-60, or 135-61, and if such that former 22 
member is not survived by a spouse to whom a retirement allowance is payable under the 23 
provisions of subsection (a) or subsection (b) above, of this section nor survived by a beneficiary 24 
to whom a monthly survivorship benefit is payable under one of the optional modes of payment 25 
under G.S. 135-61, then there shall be paid to such person as a lump sum death benefit to the 26 
beneficiary that the member shall have nominated designated by electronic submission in a form 27 
approved by the Board of Trustees or by written designation duly acknowledged and filed with 28 
the Board of Trustees, if such person is Trustees. If no beneficiary is designated or living at the 29 
time of the member's death, otherwise then the lump sum death benefit shall be paid to the 30 
member's legal representatives, a representative. The lump sum death benefit payable under this 31 
subsection shall be equal to the excess, if any, of the accumulated contributions of the member 32 
at his the member's date of retirement over the total of the retirement allowances paid to him the 33 
member prior to his death. 34 
(d) In the event that If a retirement allowance becomes payable to the spouse of a former 35 
member under the provisions of subsection (a) or subsection (b) above, of this section or to the 36 
designated survivor of a former member under one of the optional modes of payment under 37 
G.S. 135-61, and such that retirement allowance to the spouse shall terminate terminated on the 38 
remarriage or death of the spouse, or on the death of spouse or the designated survivor, survivor 39 
before the total of the retirement allowances paid to the former member and his the spouse or the 40 
designated survivor combined equals the amount of the member's accumulated contributions at 41 
his the member's date of retirement, then the excess of such those accumulated contributions over 42 
the total of the retirement allowances paid to the former member and his the spouse or the 43 
designated survivor combined shall be paid in a lump sum to such person as the beneficiary that 44 
the member shall have nominated designated by electronic submission in a form approved by the 45 
Board of Trustees or by written designation duly acknowledged and filed with the Board of 46 
Trustees, if such person Trustees. If no beneficiary is designated or is living at the time such 47 
payment under this subsection falls due, otherwise then the lump sum shall be paid to the former 48 
member's legal representatives. 49 
(e) In the event of the death of If a retired former judge dies while in receipt of a 50 
retirement allowance under the provisions of G.S. 135-58(d), then there shall be paid to the 51  General Assembly Of North Carolina 	Session 2025 
Page 16  House Bill 477-First Edition 
former judge's surviving spouse, if any, an annual retirement allowance payable monthly, which 1 
monthly. The monthly payments shall commence on the first day of the calendar month next 2 
following the date of death of the former judge and shall be continued on the first day of each 3 
month thereafter until the remarriage or death of the spouse. The amount of any such the 4 
retirement allowance under this subsection shall be equal to one half of the allowance that was 5 
payable to the former judge for the month immediately prior to his the month of death, reduced 6 
by two percent (2%) thereof for each full year, if any, by which the age of the former judge at 7 
date of death exceeds that of his the spouse. 8 
… 9 
(k) Upon the death of a retired member on or after January 1, 2015, there All retired 10 
members may elect to participate in the fully contributory death benefit for retirees. All of the 11 
following apply to the fully contributory death benefit for retirees: 12 
(1) Elections to participate in the fully contributory death benefit for retirees shall 13 
be made prior to the member's death and no later than 60 calendar days from 14 
the effective date of the member's retirement. Elections shall be received by 15 
the Board of Trustees prior to the death of the retired member. 16 
(2) Retired members electing to receive a fully contributory death benefit under 17 
this subsection shall continuously pay monthly premiums on a fully 18 
contributory basis, as determined by the Board of Trustees. Premium 19 
payments shall be made through retirement allowance deductions or other 20 
methods adopted by the Board of Trustees. 21 
(3) If a retired member who has elected to receive a fully contributory death 22 
benefit under this subsection dies, then, upon receipt of proof of death that is 23 
satisfactory to the Board of Trustees, a lump sum death benefit amount shall 24 
be paid a death benefit to the person or persons beneficiary or beneficiaries 25 
designated by the member or, if not survived by a designated beneficiary, 26 
member. If no beneficiary is designated or living, then the death benefit shall 27 
be paid to the deceased retired member's legal representative; provided the 28 
retired member has elected, when first eligible, to make, and has continuously 29 
made, in advance of the member's death required contributions as determined 30 
by the Board of Trustees on a fully contributory basis, through retirement 31 
allowance deductions or other methods adopted by the Board of Trustees, to 32 
a group death benefit trust fund, the North Carolina Teachers' and State 33 
Employees' Benefit Trust, administered by the Board of Trustees separate and 34 
apart from the Retirement System's Annuity Savings Fund and Pension 35 
Accumulation Fund. Employer and non-employer contributions to the Benefit 36 
Trust and earnings on those contributions are irrevocable. The assets of the 37 
Benefit Trust are dedicated to providing benefits to members and beneficiaries 38 
in accordance with the Plan's benefit terms. The assets of the Benefit Trust are 39 
not subject to the claims of creditors of the employees and non-employees 40 
making contributions to the Benefit Trust, are not subject to the claims of any 41 
creditors of the Benefit Trust's trustees and administrators, and are not subject 42 
to the claims of creditors of members and beneficiaries. Benefit Trust assets 43 
may be used for reasonable expenses to administer benefits provided by the 44 
Fund as approved by the Board of Trustees.representative. 45 
(4) The amount of the lump sum fully contributory death benefit payable under 46 
this subsection shall be a lump-sum payment in the amount of is one of the 47 
following: 48 
a. If the death occurred on or after the first day of the twenty-fifth month 49 
of coverage under this subsection, then the amount payable is ten 50 
thousand dollars ($10,000) upon the completion of 24 months of 51  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 17 
contributions required under this subsection. Should death occur 1 
($10,000). 2 
b. If the death occurred before the completion of 24 months of 3 
contributions required under this subsection, the deceased retired 4 
member's designated beneficiary or beneficiaries, or legal 5 
representative if not survived by a designated beneficiary, shall be paid 6 
first day of the twenty-fifth month of coverage under this subsection, 7 
then the amount payable is the sum of the retired member's 8 
contributions required by this subsection premium payments made in 9 
accordance with this subsection plus interest in an amount to be 10 
determined by the Board of Trustees." 11 
 12 
PART IV. STANDARDIZA TION OF DEATH BENEFI TS FOR MEMBERS OF TH E 13 
LEGISLATIVE RETIREME NT SYSTEM 14 
SECTION 8.(a) G.S. 120-4.8 is amended by adding a new subdivision to read: 15 
"(4d) Benefit Trust. – The North Carolina Teachers' and State Employees' Benefit 16 
Trust under G.S. 135-154." 17 
SECTION 8.(b) G.S. 120-4.10 reads as rewritten: 18 
"§ 120-4.10.  Administration of retirement system.Article. 19 
(a) The Board of Trustees of the Teachers' and State Employees' Retirement System shall 20 
be the trustee of the Retirement System. The provisions of this Article shall be administered by 21 
the Board of Trustees. 22 
(b) Fully contributory death benefits under this Article are established as a group life 23 
insurance plan that is an employee welfare benefit plan that is separate and apart from the 24 
Retirement System and administered by the Board of Trustees. Fully contributory death benefits 25 
for retirees under this Article are part of the Benefit Trust. All receipts, transfers, appropriations, 26 
contributions, investment earnings, and other income associated with the fully contributory death 27 
benefits for retirees under this Article shall be deposited in the Benefit Trust. All benefits and 28 
expenses against the fully contributory death benefits for retirees under this Article shall be 29 
disbursed from the Benefit Trust." 30 
SECTION 8.(c) G.S. 120-4.26A reads as rewritten: 31 
"§ 120-4.26A.  Benefits on death after retirement. 32 
(a) In the event of the death of If a retired member dies while in receipt of a retirement 33 
allowance under the provisions of this Article, there a lump sum death benefit shall be paid to 34 
such person or persons as the beneficiary that the retiree shall have nominated designated by 35 
electronic submission in a form approved by the Board of Trustees or by written designation duly 36 
acknowledged and filed with the Board of Trustees, if such person or persons Trustees. If no 37 
beneficiary or beneficiaries are designated or are living at the time of the retiree's death, otherwise 38 
then the lump sum death benefit shall be paid to the retiree's legal representatives, a 39 
representative. The lump sum death benefit payable under this subsection is equal to the excess, 40 
if any, of the accumulated contributions of the retiree at the date of retirement over the total of 41 
the retirement allowances paid prior to the death of the retiree. 42 
(b) In the event that If a retirement allowance becomes that became payable to the 43 
designated survivor of a retired member under the provisions of G.S. 120-4.26 and such 44 
retirement allowance to the survivor shall terminate terminates upon the death of the survivor 45 
before the total of the retirement allowances paid to the retiree and the designated survivor 46 
combined equals the amount of the accumulated contributions of the retiree at the date of 47 
retirement, then the excess, if any, excess of such those accumulated contributions over the total 48 
of the retirement allowances paid to the retiree and the survivor combined shall be paid in a lump 49 
sum to such person or persons as the beneficiary that the retiree shall have nominated designated 50 
by electronic submission in a form approved by the Board of Trustees or by written designation 51  General Assembly Of North Carolina 	Session 2025 
Page 18  House Bill 477-First Edition 
duly acknowledged and filed with the Board of Trustees, if such person or persons are Trustees. 1 
If no beneficiary is designated or living at the time such payment falls due, otherwise the lump 2 
sum payment becomes due under this subsection, then the payment shall be made to the retiree's 3 
legal representative." 4 
SECTION 8.(d) G.S. 120-4.27 reads as rewritten: 5 
"§ 120-4.27.  Death benefit.while in service; fully contributory death benefit for retirees. 6 
(a) The designated beneficiary of a member who dies while in service after completing 7 
one year of creditable service shall receive a lump-sum payment of an amount equal to the 8 
deceased member's highest annual salary, to a maximum of fifteen thousand dollars ($15,000). 9 
For purposes of this death benefit "in service" means currently serving as a member of the North 10 
Carolina General Assembly. "In service" also means service in the Uniformed Services, as that 11 
term is defined in section 4303(16) of the Uniformed Services Employment and Reemployment 12 
Rights Act, Public Law 103-353, if that service begins during the member's term of office. If the 13 
participant does not return immediately after that service to employment with a covered employer 14 
in this Retirement System, then the participant shall be deemed "in service" until the date on 15 
which the participant was first eligible to be separated or released from his or her involuntary 16 
military service. 17 
The death benefit provided by this section shall be designated a group life insurance benefit 18 
payable under an employee welfare benefit plan that is separate and apart from the Retirement 19 
System but under which the members of the Retirement System shall participate and be eligible 20 
for group life insurance benefits. The Board of Trustees is authorized to provide the death benefit 21 
in the form of group life insurance either by purchasing a contract or contracts of group life 22 
insurance with any life insurance company or companies licensed and authorized to transact 23 
business in the State of North Carolina for the purpose of insuring the lives of qualified members 24 
in service, or by establishing or affiliating with a separate trust fund. 25 
Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 26 
of the Retirement System or Retirement Fund on or after July 1, 1988, but before January 1, 27 
1999, there shall be paid a death benefit to the surviving spouse of a deceased retired member, 28 
or to the deceased retired member's legal representative if not survived by a spouse; provided the 29 
retired member has elected, when first eligible, to make, and has continuously made, in advance 30 
of his death required contributions as determined by the Retirement System on a fully 31 
contributory basis, through retirement allowance deductions or other methods adopted by the 32 
Retirement System, to a group death benefit trust fund administered by the Board of Trustees 33 
separate and apart from the Retirement System's Annuity Savings Fund and Pension 34 
Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of five 35 
thousand dollars ($5,000) upon the completion of twenty-four months of contributions required 36 
under this subsection. Should death occur before the completion of twenty-four months of 37 
contributions required under this subsection, the deceased retired member's surviving spouse or 38 
legal representative if not survived by a spouse shall be paid the sum of the retired member's 39 
contributions required by this subsection plus interest to be determined by the Board of Trustees. 40 
Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 41 
of the Retirement System or Retirement Fund on or after January 1, 1999, but before July 1, 42 
2004, there shall be paid a death benefit to the surviving spouse of a deceased retired member, 43 
or to the deceased retired member's legal representative if not survived by a spouse; provided the 44 
retired member has elected, when first eligible, to make, and has continuously made, in advance 45 
of his death required contributions as determined by the Retirement System on a fully 46 
contributory basis, through retirement allowance deductions or other methods adopted by the 47 
Retirement System, to a group death benefit trust fund administered by the Board of Trustees 48 
separate and apart from the Retirement System's Annuity Savings Fund and Pension 49 
Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of six 50 
thousand dollars ($6,000) upon the completion of 24 months of contributions required under this 51  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 19 
subsection. Should death occur before the completion of 24 months of contributions required 1 
under this subsection, the deceased retired member's surviving spouse or legal representative if 2 
not survived by a spouse shall be paid the sum of the retired member's contributions required by 3 
this subsection plus interest to be determined by the Board of Trustees. 4 
Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 5 
of the Retirement System or Retirement Fund on or after July 1, 2004, but before July 1, 2007, 6 
there shall be paid a death benefit to the surviving spouse of a deceased retired member, or to the 7 
deceased retired member's legal representative if not survived by a spouse; provided the retired 8 
member has elected, when first eligible, to make, and has continuously made, in advance of his 9 
death required contributions as determined by the Retirement System on a fully contributory 10 
basis, through retirement allowance deductions or other methods adopted by the Retirement 11 
System, to a group death benefit trust fund administered by the Board of Trustees separate and 12 
apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund. This 13 
death benefit shall be a lump-sum payment in the amount of nine thousand dollars ($9,000) upon 14 
the completion of 24 months of contributions required under this subsection. Should death occur 15 
before the completion of 24 months of contributions required under this subsection, the deceased 16 
retired member's surviving spouse or legal representative if not survived by a spouse shall be 17 
paid the sum of the retired member's contributions required by this subsection plus interest to be 18 
determined by the Board of Trustees. 19 
Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 20 
of the Retirement System or Retirement Fund on or after July 1, 2007, but before January 1, 21 
2015, there shall be paid a death benefit to the surviving spouse of a deceased retired member, 22 
or to the deceased retired member's legal representative if not survived by a spouse; provided the 23 
retired member has elected, when first eligible, to make, and has continuously made, in advance 24 
of his death required contributions as determined by the Retirement System on a fully 25 
contributory basis, through retirement allowance deductions or other methods adopted by the 26 
Retirement System, to a group death benefit trust fund administered by the Board of Trustees 27 
separate and apart from the Retirement System's Annuity Savings Fund and Pension 28 
Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of ten 29 
thousand dollars ($10,000) upon the completion of 24 months of contributions required under 30 
this subsection. Should death occur before the completion of 24 months of contributions required 31 
under this subsection, the deceased retired member's surviving spouse or legal representative if 32 
not survived by a spouse shall be paid the sum of the retired member's contributions required by 33 
this subsection plus interest to be determined by the Board of Trustees. 34 
Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 35 
of the Retirement System or Retirement Fund on or after January 1, 2015, there 36 
(b) All retired members may elect to participate in a fully contributory death benefit for 37 
retirees. All of the following apply to the fully contributory death benefit for retirees: 38 
(1) Elections to participate in the fully contributory death benefit for retirees shall 39 
be made prior to the member's death and no later than 60 calendar days from 40 
the effective date of the member's retirement. Elections shall be received by 41 
the Board of Trustees prior to the death of the retired member. 42 
(2) Retired members electing to receive a fully contributory death benefit under 43 
this subsection shall continuously pay monthly premiums on a fully 44 
contributory basis, as determined by the Board of Trustees. Premium 45 
payments shall be made through retirement allowance deductions or other 46 
methods adopted by the Board of Trustees. 47 
(3) If a retired member who has elected to receive a fully contributory death 48 
benefit under this subsection dies, then, upon receipt of proof of the death that 49 
is satisfactory to the Board of Trustees, a lump sum death benefit amount shall 50 
be paid a death benefit to the person or persons beneficiary or beneficiaries 51  General Assembly Of North Carolina 	Session 2025 
Page 20  House Bill 477-First Edition 
designated by the member or, if not survived by a designated beneficiary, 1 
member. If no beneficiary is designated or living, then the death benefit shall 2 
be paid to the deceased retired member's legal representative; provided the 3 
retired member has elected, when first eligible, to make, and has continuously 4 
made, in advance of the member's death required contributions as determined 5 
by the Retirement System on a fully contributory basis, through retirement 6 
allowance deductions or other methods adopted by the Retirement System, to 7 
a group death benefit trust fund, the North Carolina Teachers' and State 8 
Employees' Benefit Trust, administered by the Board of Trustees separate and 9 
apart from the Retirement System's Annuity Savings Fund and Pension 10 
Accumulation Fund. Employer and non-employer contributions to the Benefit 11 
Trust and earnings on those contributions are irrevocable. The assets of the 12 
Benefit Trust are dedicated to providing benefits to members and beneficiaries 13 
in accordance with the Plan's benefit terms. The assets of the Benefit Trust are 14 
not subject to the claims of creditors of the employees and non-employees 15 
making contributions to the Benefit Trust, are not subject to the claims of any 16 
creditors of the Benefit Trust's trustees and administrators, and are not subject 17 
to the claims of creditors of members and beneficiaries. Benefit Trust assets 18 
may be used for reasonable expenses to administer benefits provided by the 19 
Fund as approved by the Board of Trustees.representative. 20 
(4) A member shall designate a beneficiary or beneficiaries for the death benefit 21 
payable under this subsection by electronic submission in a form approved by 22 
the Board of Trustees or by written designation duly acknowledged and filed 23 
with the Board of Trustees. 24 
(5) The amount of the lump sum fully contributory death benefit payable under 25 
this subsection shall be a lump-sum payment in the amount of is one of the 26 
following: 27 
a. If the death occurred on or after the first day of the twenty-fifth month 28 
of coverage under this subsection, then the amount payable is ten 29 
thousand dollars ($10,000) upon the completion of 24 months of 30 
contributions required under this subsection. Should death occur 31 
($10,000). 32 
b. If the death occurred before the completion of 24 months of 33 
contributions required under this subsection, the deceased retired 34 
member's designated beneficiary or beneficiaries, or legal 35 
representative if not survived by a designated beneficiary, shall be paid 36 
first day of the twenty-fifth month of coverage under this subsection, 37 
then the amount payable is the sum of the retired member's 38 
contributions required by premium payments made in accordance with 39 
this subsection plus interest in an amount to be determined by the 40 
Board of Trustees." 41 
 42 
PART V. TECHNICAL AN D CONFORMING CHANGES RELATED TO 43 
RECODIFICATION AND S TANDARDIZATION 44 
SECTION 9.(a) G.S. 135-5(m) reads as rewritten: 45 
"(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 46 
designated to receive a return of accumulated contributions shall have the right to elect to receive 47 
in lieu thereof the reduced retirement allowance provided by Option 2 of subsection (g) above of 48 
this section computed by assuming that the member had retired on the first day of the month 49 
following the date of the member's death, provided that all four of the following conditions apply: 50 
… 51  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 21 
For the purpose of this benefit, a member is considered to be in service at the date of his the 1 
member's death if his the death occurs within 180 days from the last day of his the member's 2 
actual service. The last day of actual service shall be determined as provided in subsection (l) of 3 
this section. G.S. 135-170. Upon the death of a member in service, the surviving spouse may 4 
make all purchases for creditable service as provided for under this Chapter Article for which the 5 
member had made application in writing prior to the date of death, provided that the date of death 6 
occurred prior to or within 60 days after notification of the cost to make the purchase. The term 7 
"in service" as used in this subsection includes a member in receipt of a benefit under the 8 
Disability Income Plan as provided in Article 6 of this Chapter. 9 
…." 10 
SECTION 9.(b) G.S. 128-27(m) reads as rewritten: 11 
"(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 12 
designated to receive a return of accumulated contributions shall have the right to elect to receive 13 
in lieu thereof the reduced retirement allowance provided by Option two of subsection (g) above 14 
of this section computed by assuming that the member had retired on the first day of the month 15 
following the date of the member's death, provided that all four of the following conditions apply: 16 
… 17 
For the purpose of this benefit, a member is considered to be in service at the date of his the 18 
member's death if his the death occurs within 180 days from the last day of his the member's 19 
actual service. The last day of actual service shall be determined as provided in subsection (l) of 20 
this section. G.S. 128-38.36. Upon the death of a member in service, the surviving spouse may 21 
make all purchases for creditable service as provided for under this Chapter for which the 22 
member had made application in writing prior to the date of death, provided that the date of death 23 
occurred prior to or within 60 days after notification of the cost to make the purchase. 24 
…." 25 
SECTION 10.(a) G.S. 135-3(c) reads as rewritten: 26 
"(c) Members who are participating in an intergovernmental exchange of personnel under 27 
the provisions of Article 10 of Chapter 126 may retain their membership status and receive all 28 
benefits provided by this Chapter during the period of the exchange provided the requirements 29 
of Article 10 of Chapter 126 are met; provided further, that a met. A member participating in an 30 
intergovernmental exchange of personnel under Article 10 of Chapter 126 shall, notwithstanding 31 
whether the member and the member's employer are making contributions to the member's 32 
account during the exchange period, be entitled to the death benefit and, if applicable, benefits 33 
under the Death Benefit Plan under Article 8 of this Chapter, if the member otherwise qualifies 34 
under the provisions of this Article and provided further Article, except that no duplicate benefits 35 
shall be paid." 36 
SECTION 10.(b) G.S. 128-24(6) reads as rewritten: 37 
"(6) Employees of a sending agency participating in an intergovernmental exchange of 38 
personnel under the provisions of Article 10 of Chapter 126 shall remain members entitled to all 39 
benefits of the Retirement System provided that the requirements of Article 10 of Chapter 126 40 
are met; provided further, that a met. A member may retain membership status while serving as 41 
an assigned employee or employee on leave under the provisions of Article 10 of Chapter 126 42 
for purposes of receiving the death benefit and, if applicable, benefits under the Death Benefit 43 
Plan regardless of whether he and his the member and the member's employer are contributing 44 
to his the member's account during the exchange period period, except that no duplicate benefits 45 
shall be paid." 46 
SECTION 11.(a) G.S. 135-8(f) reads as rewritten: 47 
"(f) Collection of Contributions. – The following shall apply apply to the collection of 48 
contributions:contributions under this Chapter: 49 
…." 50 
SECTION 11.(b) G.S. 128-30(g) reads as rewritten: 51  General Assembly Of North Carolina 	Session 2025 
Page 22  House Bill 477-First Edition 
"(g) Collection of Contributions. – The following shall apply apply to the collection of 1 
contributions:contributions under this Article: 2 
…." 3 
SECTION 12.(a) G.S. 143-166.60(b) reads as rewritten: 4 
"(b) The Boards of Trustees of the Teachers' and State Employees' Retirement System and 5 
the Local Governmental Employees' Retirement System shall jointly administer the Plan and 6 
shall, under the terms and conditions otherwise appearing in this Article, provide Plan benefits 7 
either (i) by establishing a separate trust fund or, (ii) by causing the Plan to affiliate with a master 8 
trust, Plan. The Separate Insurance Benefits Plan is part of the North Carolina Teachers' and State 9 
Employees' Benefits Trust, providing the same benefits for participants. Employer and 10 
non-employer contributions to the Benefit Trust and earnings on those contributions are 11 
irrevocable. The assets of the Benefit Trust are dedicated to providing benefits to participants, 12 
surviving spouses, participants' estates, and persons named by the participant to receive the 13 
benefit. The assets of the Benefit Trust are not subject to the claims of creditors of the employees 14 
and non-employees making contributions to the Benefit Trust, are not subject to the claims of 15 
any creditors of the Benefit Trust's trustees and administrators, and are not subject to the claims 16 
of creditors of participants. Benefit Trust assets may be used for reasonable expenses to 17 
administer benefits provided by the Fund as approved by the Board of Trustees.Benefit Trust 18 
established under G.S. 135-154. All receipts, transfers, appropriations, contributions, investment 19 
earnings, and other income belonging to the Separate Insurance Benefits Plan shall be deposited 20 
in the Benefit Trust. All benefits and expenses against the Separate Insurance Benefits Plan for 21 
retirees shall be disbursed from the Benefit Trust." 22 
SECTION 12.(b) G.S. 143-166.70(5) is expired. 23 
 24 
PART VI. SURVIVOR'S ALTERNATE BENEFIT C HANGES 25 
SECTION 13.(a) G.S. 135-5(m)(1) expires June 30, 2025. 26 
SECTION 13.(b) G.S. 135-5(m), as amended by Section 9(a) of this act, reads as 27 
rewritten: 28 
"(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 29 
designated to receive a return of accumulated contributions shall have the right to elect to receive 30 
in lieu thereof the reduced retirement allowance provided by Option 2 of subsection (g) of this 31 
section computed by assuming that the member had retired on the first day of the month following 32 
the date of the member's death, provided that all four of the following conditions apply: 33 
… 34 
(1a) The member falls into one of the following categories: 35 
a. The member had attained the minimum age, creditable service amount, 36 
or combination of both necessary to be eligible to commence 37 
retirement with an early or service retirement allowance. 38 
b. The member had completed at least five years of membership service, 39 
in which case the retirement allowance shall be computed in 40 
accordance with G.S. 135-5(b21)(1)c. or G.S. 135-5(b21)(2)c., 41 
whichever is applicable, notwithstanding any age or service 42 
requirements. In no case shall the retirement allowance under this 43 
sub-subdivision be less than the actuarial equivalent of the return of 44 
accumulated contributions, computed using the beneficiary's age as of 45 
the first day of the month following the date of the member's death. 46 
(2) At the time of the member's death, one and only one beneficiary is eligible to 47 
receive a return of his the member's accumulated contributions. 48 
(3) The member had not instructed the Board of Trustees in writing that he the 49 
member did not wish the provisions of this subsection to apply. 50  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 23 
(4) The member had not commenced to receive a retirement allowance as 1 
provided under this Chapter. 2 
…." 3 
SECTION 13.(c) Subsection (b) of this section is effective July 1, 2025, and applies 4 
to member deaths occurring on or after that date. 5 
SECTION 14.(a) G.S. 128-27(m)(1) expires on June 30, 2025. 6 
SECTION 14.(b) G.S. 128-27(m), as amended by Section 9(b) of this act, reads as 7 
rewritten: 8 
"(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 9 
designated to receive a return of accumulated contributions shall have the right to elect to receive 10 
in lieu thereof the reduced retirement allowance provided by Option two of subsection (g) of this 11 
section computed by assuming that the member had retired on the first day of the month following 12 
the date of the member's death, provided that all four of the following conditions apply: 13 
… 14 
(1a) The member falls into one of the following categories: 15 
a. The member had attained the minimum age, creditable service amount, 16 
or combination of both necessary to be eligible to commence 17 
retirement with an early or service retirement allowance. 18 
b. The member had completed at least five years of membership service, 19 
in which case the retirement allowance shall be computed in 20 
accordance with G.S. 128-27(b22)(1)c. or G.S. 128-27(b22)(2)c., 21 
whichever is applicable, notwithstanding any age or service 22 
requirements. In no case shall the retirement allowance under this 23 
sub-subdivision be less than the actuarial equivalent of the return of 24 
accumulated contributions, computed using the beneficiary's age as of 25 
the first day of the month following the date of the member's death. 26 
(2) At the time of the member's death, one and only one beneficiary is eligible to 27 
receive a return of his the member's accumulated contributions. 28 
(3) The member had not instructed the Board of Trustees in writing that he the 29 
member did not wish the provisions of this subsection apply. 30 
(4) The member had not commenced to receive a retirement allowance as 31 
provided under this Chapter. 32 
…." 33 
SECTION 14.(c) Subsection (b) of this section is effective July 1, 2025, and applies 34 
to member deaths occurring on or after that date. 35 
SECTION 15.(a) G.S. 135-63(a1), as amended by Section 7(d) of this act, reads as 36 
rewritten: 37 
"(a1) Survivor's Alternate Benefit. – The surviving spouse of a member who was age 50 or 38 
older with had completed at least five years of membership service at the time of death may elect 39 
a survivor's alternate benefit. If the surviving spouse elects a survivor's alternate benefit, then the 40 
lump-sum death benefit provided for under subsection (a) of this section shall consist only of a 41 
payment equal to the member's final compensation and there shall be paid to the surviving spouse 42 
an annual retirement allowance, payable monthly. The monthly payments shall commence on the 43 
first day of the calendar month coinciding with or next following the death of the member. All 44 
of the following apply to the survivor's alternate benefit: 45 
…." 46 
SECTION 15.(b) G.S. 120-4.28 reads as rewritten: 47 
"§ 120-4.28.  Survivor's alternate benefit. 48 
(a) The designated beneficiary of If a member who dies in service before retirement but 49 
after age 60 and after completing five years of creditable service or after completing 12 years of 50 
creditable service service, then the principal beneficiary designated by that member to receive a 51  General Assembly Of North Carolina 	Session 2025 
Page 24  House Bill 477-First Edition 
return of accumulated contributions under G.S. 120-4.25 is entitled to Option 2 prescribed by 1 
G.S. 120-4.26.G.S. 120-4.26, notwithstanding any age or service requirements. 2 
(b) In the event that If a retirement allowance becomes payable under this section to the 3 
principal beneficiary designated to receive a return of accumulated contributions pursuant to this 4 
subsection and that principal beneficiary dies before the total of the retirement allowances paid 5 
equals is equal to or greater than the amount of those the member's accumulated contributions 6 
over the total of the retirement allowances paid to the beneficiary, contributions, then the 7 
allowance excess of those accumulated contributions over the total of the retirement allowance 8 
paid to the principal beneficiary shall be paid in a lump sum to the person or persons the member 9 
has designated as the contingent beneficiary for return of accumulated contributions, if the person 10 
or persons contributions under G.S. 120-4.25. 11 
(c) If a retirement allowance becomes payable under this section and the principal 12 
beneficiary is not living at the time the payment falls due, then the retirement allowance shall be 13 
paid to the contingent beneficiary designated to receive a return of accumulated contributions 14 
under G.S. 120-4.25. If that contingent beneficiary dies before the total of the retirement 15 
allowances paid is equal to or greater than the amount of the member's accumulated 16 
contributions, then the excess of those accumulated contributions over the total of the retirement 17 
allowances paid to the contingent beneficiary shall be paid in a lump sum to the contingent 18 
beneficiary's legal representative. 19 
(d) If no beneficiaries are living at the time the payment required under this section first 20 
falls due, otherwise to then the allowance shall be paid in a lump sum to the principal beneficiary's 21 
legal representative. In the event that a retirement allowance becomes payable to the contingent 22 
beneficiary designated to receive a return of accumulated contributions pursuant to subsection 23 
(m) of this section and that beneficiary dies before the total of the retirement allowances paid 24 
equals the amount of the accumulated contributions of the member at the date of the member's 25 
death, the excess of those accumulated contributions over the total of the retirement allowances 26 
paid to the beneficiary shall be paid in a lump sum to the contingent beneficiary's legal 27 
representative." 28 
SECTION 15.(c) This section is effective July 1, 2025, and applies to member deaths 29 
occurring on or after that date. 30 
 31 
PART VII. ENSURE SUF FICIENT FUNDING FOR LINE OF DUTY DEATH 32 
BENEFITS 33 
SECTION 16.(a) G.S. 135-154, as created and amended by Part I of this act, is 34 
amended by adding a new subsection to read: 35 
"(e) Separate Fund for Line of Duty Death Benefits. – The Board of Trustees may make 36 
additional funding available to the Department of State Treasurer to ensure the timely payment 37 
of death benefits awarded by the Industrial Commission under the Public Safety Employees' 38 
Death Benefits Act, Article 12A of Chapter 143 of the General Statutes, by depositing a 39 
percentage of the State's employer contribution rate established for the benefits provided under 40 
G.S. 135-165 into a separate fund from the Benefits Trust. This percentage shall not exceed four 41 
hundredths percent (0.04%) in any given fiscal year. The Department of State Treasurer is 42 
authorized to use the funds deposited into this separate fund for the sole purpose of paying for 43 
death benefits awarded by the Industrial Commission under the Public Safety Employees' Death 44 
Benefits Act and may do so only if all other State funds appropriated to the Department for the 45 
fiscal year for the payment of those death benefits have been fully expended. Any funds deposited 46 
by the Department of State Treasurer into a separate fund in accordance with this subsection that 47 
remain unspent as of June 30 of the same fiscal year shall be transferred to the Benefit Fund as 48 
an additional employer contribution." 49 
SECTION 16.(b) This section becomes effective July 1, 2025. 50 
 51  General Assembly Of North Carolina 	Session 2025 
House Bill 477-First Edition  	Page 25 
PART VIII. EFFECTIVE DATE 1 
SECTION 17. Except as otherwise provided, this act is effective when it becomes 2 
law. 3