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North Carolina Senate Bill S359

North Carolina 2025-2026 Regular Session

North Carolina Senate Bill S359 Compare Versions

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11 GENERAL ASSEMBLY OF NORTH CAROLINA
22 SESSION 2025
3-S 1
4-SENATE BILL 359
3+S D
4+SENATE BILL DRS55015-MRp-1H
5+
56
67
78 Short Title: Retirement Death Benefits Rewrite.-AB (Public)
89 Sponsors: Senators Alexander, Ford, and Hanig (Primary Sponsors).
9-Referred to: Rules and Operations of the Senate
10-March 24, 2025
11-*S359 -v-1*
10+Referred to:
11+
12+*DRS55015 -MRp-1H*
1213 A BILL TO BE ENTITLED 1
1314 AN ACT TO RECODIFY AND STANDARDIZE THE LAWS RELATING TO THE DEATH 2
1415 BENEFIT PLAN, INCLUDING BY MAKING TECHNICAL, CLARIFYING, AND 3
1516 CONFORMING CHANGES, UNDER THE TEACHERS ' AND STATE EMPLOYEES ' 4
1617 RETIREMENT SYSTEM, THE LOCAL GOVERNMENTAL EMPLOYEES ' 5
1718 RETIREMENT SYSTEM, THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, 6
1819 AND THE LEGISLATIVE RETIREMENT SYSTEM , TO MAKE CHANGES TO THE 7
1920 SURVIVOR'S ALTERNATE BENEFIT UNDER THOSE RETIREMENT SYSTEMS, 8
2021 AND TO ENSURE SUFFICIENT FUNDING FOR LINE OF DUTY DEATH BENEFITS. 9
2122 The General Assembly of North Carolina enacts: 10
2223 11
2324 PART I. TECHNICAL RECODIFICATION AND STANDARDIZATION OF THE 12
2425 DEATH BENEFIT PLAN FOR MEMBERS OF THE TEACHERS ' AND STATE 13
2526 EMPLOYEES' RETIREMENT SYSTEM 14
2627 SECTION 1.(a) Chapter 135 of the General Statutes is amended to add a new Article 15
2728 8 to be entitled "Death Benefit Plan for State Employees and Retirees" that consists of the 16
2829 following new sections: 17
2930 (1) G.S. 135-153. 18
3031 (2) G.S. 135-154. 19
3132 (3) G.S. 135-155. 20
3233 (4) G.S. 135-160. 21
3334 (5) G.S. 135-165. 22
3435 (6) G.S. 135-170. 23
3536 (7) G.S. 135-175. 24
3637 (8) G.S. 135-180. 25
3738 (9) G.S. 135-185. 26
3839 (10) G.S. 135-190. 27
3940 (11) G.S. 135-195. 28
4041 (12) G.S. 135-200. 29
4142 SECTION 1.(b) The first and second sentence of G.S. 135-7(g)(2) are recodified as 30
4243 the first and third sentence of subsection (a) of G.S. 135-154. 31
4344 SECTION 1.(c) The first sentence of the lead-in language in subsection 135-7(g) is 32
4445 recodified as the second sentence of subsection (a) of G.S. 135-154. 33
4546 SECTION 1.(d) The third sentence of G.S. 135-7(g)(2) is recodified as subsection 34
46-(b) of G.S. 135-154. 35 General Assembly Of North Carolina Session 2025
47-Page 2 Senate Bill 359-First Edition
47+(b) of G.S. 135-154. 35
48+FILED SENATE
49+Mar 20, 2025
50+S.B. 359
51+PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
52+Page 2 DRS55015-MRp-1H
4853 SECTION 1.(e) The fourth, fifth, and sixth sentences of G.S. 135-7(g)(2) are 1
4954 recodified as the first three sentences of subsection (c) of G.S. 135-154. 2
5055 SECTION 1.(f) The third sentence of G.S. 135-7(g)(3) is recodified as the fourth 3
5156 sentence of subsection (c) of G.S. 135-154. 4
5257 SECTION 1.(g) The first sentence of G.S.135-7(g)(3) is recodified as subsection (d) 5
5358 of G.S. 135-154. 6
5459 SECTION 1.(h) The caption and the first sentence of the first paragraph of 7
5560 G.S. 135-5(l) are recodified as subsection (a) of G.S. 135-155. 8
5661 SECTION 1.(i) The second, third, and fourth sentences of the first paragraph of 9
5762 G.S. 135-5(l) are recodified as subsection (b) of G.S. 135-155. 10
5863 SECTION 1.(j) The seventh paragraph of G.S. 135-5(l) is recodified as subsection 11
5964 (a) of G.S. 135-160. 12
6065 SECTION 1.(j1) G.S. 135-6(e1) is recodified as subsection (b) of G.S. 135-160. 13
6166 SECTION 1.(k) The first sentence of the second paragraph of G.S. 135-5(l) is 14
6267 recodified as subsection (b) of G.S. 135-165. 15
6368 SECTION 1.(l) The second sentence of the second paragraph of G.S. 135-5(l) is 16
6469 recodified as subsection (c) of G.S. 135-165. 17
6570 SECTION 1.(m) The fourth sentence of the second paragraph of G.S. 135-5(l) is 18
6671 recodified as subsection (d) of G.S. 135-165. 19
6772 SECTION 1.(n) Sub-subdivision a. of subdivision (2) of the sixth paragraph of 20
6873 G.S. 135-5(l) is recodified as subdivision (3) of G.S. 135-170. 21
6974 SECTION 1.(o) Sub-subdivision b. of subdivision (2) of the sixth paragraph of 22
7075 G.S. 135-5(l) is recodified as subdivision (1) of G.S. 135-170. 23
7176 SECTION 1.(p) Sub-subdivision c. of subdivision (2) of the sixth paragraph of 24
7277 G.S. 135-5(l) is recodified as sub-subdivision a. of subdivision (2) of G.S. 135-170. 25
7378 SECTION 1.(q) Subdivision (3) of the sixth paragraph of G.S. 135-5(l) is recodified 26
7479 as sub-subdivision b. of subdivision (2) of G.S. 135-170. 27
7580 SECTION 1.(r) Subdivision (4) of the sixth paragraph of G.S. 135-5(l) is recodified 28
7681 as sub-subdivision c. of subdivision (2) of G.S. 135-170. 29
7782 SECTION 1.(s) The first sentence of the thirteenth paragraph of G.S. 135-5(l) is 30
7883 recodified as subsection (b) of G.S. 135-175. 31
7984 SECTION 1.(t) The sixth and seventh sentences of the thirteenth paragraph of 32
8085 G.S. 135-5(l) are recodified as subsection (c) of G.S. 135-175. 33
8186 SECTION 1.(u) The first sentence of the eighth paragraph of G.S. 135-5(l) is 34
8287 recodified as subsection (a) of G.S. 135-180. 35
8388 SECTION 1.(v) The second sentence of the eighth paragraph of G.S. 135-5(l) is 36
8489 recodified as subsection (c) of G.S. 135-180. 37
8590 SECTION 1.(w) The third sentence of the eighth paragraph of G.S. 135-5(l) is 38
8691 recodified as subsection (d) of G.S. 135-180. 39
8792 SECTION 1.(x) The caption and first and second sentences of G.S. 135-5(l1) are 40
8893 recodified as subsection (a) of G.S. 135-190. 41
8994 SECTION 1.(y) The third sentence of G.S. 135-5(l1) is recodified as subsection (b) 42
9095 of G.S. 135-190. 43
9196 SECTION 1.(z) The third sentence of the second paragraph of G.S. 135-5(l) is 44
9297 recodified as G.S. 135-195. 45
9398 SECTION 1.(aa) The fourth sentence of G.S. 135-5(l1) is recodified as 46
9499 G.S. 135-200. 47
95100 SECTION 2.(a) The remainder of G.S. 135-7(g) not recodified by Section 1 of this 48
96101 act is repealed. 49
97102 SECTION 2.(b) The remainder of G.S. 135-5(l) not recodified by Section 1 of this 50
98103 act is repealed. 51 General Assembly Of North Carolina Session 2025
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100105 SECTION 3. Article 8 of Chapter 135 of the General Statutes, as created by Section 1
101106 1 of this act, reads as rewritten: 2
102107 "Article 8. 3
103108 "Death Benefit Plan for State Employees. 4
104109 "§ 135-153. Definitions. 5
105110 The following definitions apply in this Article: 6
106111 (1) Benefit Trust. – The North Carolina Teachers' and State Employees' Benefit 7
107112 Trust under G.S. 135-154. 8
108113 (2) Death Benefit Plan. – The Death Benefit Plan for State Employees and 9
109114 Retirees under this Article. 10
110115 (3) Disability Income Plan. – The Disability Income Plan of North Carolina under 11
111116 Article 6 of this Chapter. 12
112117 (4) Reserved for future codification purposes. 13
113118 (5) Reserved for future codification purposes. 14
114119 (6) Participating plans. – All of the following: 15
115120 a. The Death Benefit Plan. 16
116121 b. The Local Governmental Death Benefit Plan under Part 2 of Article 3 17
117122 of Chapter 128 of the General Statutes. 18
118123 c. Contributory death benefits available to retired members of the 19
119124 Consolidated Judicial Retirement System under G.S. 135-64. 20
120125 d. Contributory death benefits available to retired members of the 21
121126 Legislative Retirement System under G.S. 120-4.27. 22
122127 e. The Separate Insurance Benefits Plan under G.S. 143-166.60. 23
123128 (7) Reserved for future codification purposes. 24
124129 (8) Reserved for future codification purposes. 25
125130 (9) Workers' compensation benefits. – Excluding any payments for a permanent 26
126131 partial disability rating, disability income benefits provided under Chapter 97 27
127132 of the General Statutes. 28
128133 "§ 135-154. North Carolina Teachers' and State Employees' Benefit Trust. 29
129134 (a) Benefit Trust. – A trust fund, the North Carolina Teachers' and State Employees' 30
130135 Benefit Trust, is hereby created as a master trust to which all receipts, transfers, appropriations, 31
131136 contributions, investment earnings, and other income belonging to the Plans participating plans 32
132137 shall be deposited, and from which all benefits and expenses against the Plans those participating 33
133138 plans shall be disbursed. It is the intent of the General Assembly that a this master trust fund be 34
134139 created that provides provide an irrevocable source of funding to be used, to the extent the fund's 35
135140 assets are sufficient, only for death benefits and disability benefits payable to the Plans' members, 36
136141 participants, and beneficiaries, pursuant to G.S. 120 4.27, G.S. 128 27(l), subsections (l2) through 37
137142 (l6) of G.S. 128 27, 135 5(l), 135 64(k), and 143 166.60. beneficiaries of the participating plans 38
138143 and reasonable expenses for the administration of the participating plans. The Boards of Trustees 39
139144 of the Teachers' and State Employees' Retirement System and the Local Governmental 40
140145 Employees' Retirement System shall be the trustee of the Benefit Trust. 41
141146 (b) No Comingling of Funds. – Within the Benefit Trust, the funds of each of the Plans 42
142147 participating plans shall be accounted for separately and not commingled. 43
143148 (c) Assets. – Assets of one participating plan cannot be used to pay for liabilities of 44
144149 another participating plan within the Benefit Trust. The assets of the trust fund Benefit Trust shall 45
145150 be used only for the exclusive benefit of persons who are or may be entitled to benefits under the 46
146151 Plans. participating plans. In no event, including dissolution, will the shall any assets of the trust 47
147152 fund Benefit Trust be distributed to any entity that is not a state, a political subdivision of a state, 48
148153 or another entity the income of which is excludable from its gross income by application of 49
149154 section 115(1) of the Internal Revenue Code. The assets of the Benefit Trust are not subject to 50
150155 the claims of creditors of the employers and non employers any of the following: 51 General Assembly Of North Carolina Session 2025
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152157 (1) An employer or nonemployer making contributions to the Trust, are not 1
153158 subject to the claims of any creditors of the Trust, trustees, and administrators, 2
154159 and are not subject to the claims of creditors of members, participants, and 3
155160 beneficiaries.Benefit Trust. 4
156161 (2) A trustee or administrator of the Benefit Trust. 5
157162 (3) A member. 6
158163 (4) Participants or beneficiaries of any participating plan. 7
159164 (d) Contributions. – Employer and non employer nonemployer contributions to the North 8
160165 Carolina Teachers' and State Employees' Benefit Trust and earnings on those contributions are 9
161166 irrevocable. 10
162167 "§ 135-155. Death Benefit Plan established. 11
163168 (a) Death Benefit Plan. Plan for State Employees and Retirees. – There is hereby created 12
164169 a Group Life Insurance Plan (hereinafter called the "Plan") which is established as the Death 13
165170 Benefit Plan for State Employees and Retirees, a group life insurance plan that is an employee 14
166171 welfare benefit plan that is separate and apart from the Retirement System and under which the 15
167172 members of the Retirement System shall participate and be eligible for group life insurance 16
168173 benefits.System. 17
169174 (b) Benefit Trust. – The Death Benefit Plan shall be part of the North Carolina Teachers' 18
170175 and State Employees' Benefit Trust, as established under G.S. 135-7(g). Trust. All receipts, 19
171176 transfers, appropriations, contributions, investment earnings, and other income belonging to the 20
172177 Death Benefit Plan shall be deposited in the Benefit Trust. All benefits and expenses against the 21
173178 Death Benefit Plan shall be disbursed from the Benefit Trust. 22
174179 "§ 135-160. Administration of Death Benefit Plan. 23
175180 (a) Provisions Applicable. – The Death Benefit Plan is administered by the Board of 24
176181 Trustees. The provisions of the Retirement System pertaining to Administration, G.S. 135-6, and 25
177182 management of funds, G.S. 135-7, are hereby made G.S. 135-6 and G.S. 135-7 are applicable to 26
178183 the Death Benefit Plan. 27
179184 (b) Effect of Vote Related to Contributory Death Benefit. – No decision of the Board of 28
180185 Trustees related to the Contributory Death Benefit fully contributory death benefit for retirees 29
181186 provided for under this Chapter, Chapter 120, or Chapter 127A of the General Statutes, any of 30
182187 the following shall take effect unless and until this same decision has been made and voted on 31
183188 by the Board of Trustees of the Local Governmental Employees Retirement System.System: 32
184189 (1) G.S. 120-4.27. 33
185190 (2) G.S. 135-64. 34
186191 (3) G.S. 134-166.60. 35
187192 (c) Rulemaking. – The Board of Trustees may adopt temporary or permanent rules, as 36
188193 necessary, for all aspects of administration of this Article. 37
189194 "§ 135-165. Death benefit for in-service members. 38
190195 (a) Eligibility. – A member who is not retired and who has completed at least one full 39
191196 year of membership in the Retirement System is a participant in, and eligible for death benefits 40
192197 under, the Death Benefit Plan in accordance with this section. 41
193198 (b) Benefits Upon Death While in Service. – If a member eligible for benefits under this 42
194199 section dies while in service, then, upon receipt of proof, proof of the death that is satisfactory to 43
195200 the Board of Trustees in their capacity as trustees under the Group Life Insurance Plan, of the 44
196201 death, in service, of a member who had completed at least one full calendar year of membership 45
197202 in the Retirement System, there Trustees, a lump sum death benefit amount shall be paid to such 46
198203 person as the member shall have nominated by electronic submission in a form approved by the 47
199204 Board of Trustees or by written designation duly acknowledged and filed with the Board of 48
200205 Trustees, if such person is living at the time of the member's death, otherwise to the member's 49
201206 legal representatives, a death benefit.paid. 50 General Assembly Of North Carolina Session 2025
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203208 (c) Such death Death Benefit Amount. – Subject to a minimum of twenty-five thousand 1
204209 dollars ($25,000) and to a maximum of fifty thousand dollars ($50,000), the lump sum death 2
205210 benefit shall be amount payable under this section is equal to the greater of:of the following 3
206211 amounts: 4
207212 (1) The compensation on which contributions to the Retirement System were 5
208213 made by the member during the calendar year preceding the year in which his 6
209214 the member's death occurs, oroccurred. 7
210215 (2) The greatest compensation on which contributions to the Retirement System 8
211216 were made by the member during a 12-month period of service within the 9
212217 24-month period of service ending on the last day of the month preceding the 10
213218 month in which his the member's last day of actual service occurs; 11
214219 subject to a minimum of twenty-five thousand dollars ($25,000) and to a maximum 12
215220 of fifty thousand dollars ($50,000).occurred. 13
216221 (d) Members Deemed to be in Service. – For the purpose of the Plan, this section, a 14
217222 member shall be deemed to be in service at the date of his the member's death if his the death 15
218223 occurs within 180 days from the last day of his actual service.service, as determined in 16
219224 accordance with G.S. 135-170. 17
220225 "§ 135-170. Last day of actual service; death benefit for in-service members. 18
221226 To determine the last day of actual service for the purposes of the death benefit for in-service 19
222227 members, all of the following apply: 20
223228 (1) When the employee has not been terminated, Uninterrupted service. – For a 21
224229 member with uninterrupted service, the last day of actual service is the date 22
225230 on which an absent member's sick and annual leave expire, unless the member 23
226231 is on an approved leave of absence and is deemed to be in service under the 24
227232 provisions of G.S. 135-4(h). If a member is deemed to be in service under 25
228233 G.S. 135-4(h), then the last day of actual service is the last day for which the 26
229234 member made a contribution to the Retirement System. 27
230235 (2) Interrupted service. – All of the following apply to a member whose service 28
231236 has been interrupted: 29
232237 a. When a member's For a member whose service is interrupted by reason 30
233238 of service in the Uniformed Services, as that term is defined in section 31
234239 4303(16) of the Uniformed Services Employment and Reemployment 32
235240 Rights Act, Public Law 103-353, and the participant member does not 33
236241 return immediately after that service to employment with a covered 34
237242 employer in this the Retirement System, the last day of actual service 35
238243 is the date on which the participant member was first eligible to be 36
239244 separated or released from his or her involuntary military service. 37
240245 b. For a period when a member who is on an approved leave of absence, 38
241246 his status with respect to the death benefit will be determined by the 39
242247 provisions of G.S. 135-4(h).but is not deemed to be in service under 40
243248 G.S. 135-4(h), the last day of actual service is either the last day for 41
244249 which the member made a contribution to the Retirement System or 42
245250 the date on which the member's sick and annual leave expired, 43
246251 whichever is later. 44
247252 c. A member on leave of absence from his a position as a teacher or State 45
248253 employee for the purpose of serving as a member or officer of the 46
249254 North Carolina General Assembly shall be deemed to be in service 47
250255 during sessions of the General Assembly and thereby covered by the 48
251256 provisions of the death benefit. The eligible for the death benefit under 49
252257 G.S. 135-165. The last day of actual service shall be the most recent 50
253258 legislative day of the applicable General Assembly session or the last 51 General Assembly Of North Carolina Session 2025
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255260 day the member performed work as a teacher or State employee, 1
256261 whichever is later. Notwithstanding G.S. 135-165(c), the amount of 2
257262 the death benefit for such a member who is on a leave of absence due 3
258263 to General Assembly service shall be the equivalent of the salary to 4
259264 which the member would have been entitled as a teacher or State 5
260265 employee during the 12-month period immediately prior to the month 6
261266 in which death occurred, not to be less than subject to a minimum of 7
262267 twenty-five thousand dollars ($25,000) nor to exceed and a maximum 8
263268 of fifty thousand dollars ($50,000). 9
264269 d. All of the following apply for a member who is either (i) receiving 10
265270 workers' compensation benefits during the period for which the 11
266271 member would have been otherwise eligible to receive short-term 12
267272 benefits or extended short-term benefits under G.S. 135-105 or (ii) a 13
268273 beneficiary under the Disability Income Plan: 14
269274 1. If the date the member last performed work as a teacher or 15
270275 State employee occurred within 180 days of the date the 16
271276 member died, then the last day of actual service is the last day 17
272277 the member performed that work. 18
273278 2. If the date the member last performed worked as a teacher or 19
274279 State employee occurred more than 180 days from the date the 20
275280 member died, then that member shall not be deemed in active 21
276281 service for the purposes of G.S. 135-165. 22
277282 (3) When the employee Terminated service. – For a member whose employment 23
278283 has been terminated, terminated for reasons other than retirement, whether by 24
279284 the employer or the employee, the last day of actual service is the last day the 25
280285 member actually worked.performed work as a teacher or State employee. 26
281286 "§ 135-175. Fully contributory death benefit for retired members. 27
282287 (a) Participation and Premiums. – All retired members may elect to participate in the 28
283288 Death Benefit Plan and therefore become eligible to receive death benefits under the Death 29
284289 Benefit Plan in accordance with this section. Elections shall be made prior to death and no later 30
285290 than 60 calendar days from the effective date of the member's retirement. Elections shall be 31
286291 received by the Board of Trustees prior to the death of the retired member. Retired members 32
287292 electing to receive a fully contributory death benefit under the Death Benefit Plan shall 33
288293 continuously pay monthly premiums on a fully contributory basis, as determined by the Board 34
289294 of Trustees, to the Benefit Trust. Premium payments shall be made through retirement allowance 35
290295 deductions or other methods adopted by the Board of Trustees. 36
291296 (b) Benefits Upon Death. – If a retired member who has elected to receive a fully 37
292297 contributory death benefit under to this section dies, then, upon receipt of proof, proof of the 38
293298 death that is satisfactory to the Board of Trustees in its capacity under this subsection, of the 39
294299 death of a retired member of the Retirement System on or after January 1, 2015, there Trustees, 40
295300 a lump sum death benefit amount shall be paid a death benefit to the person or persons designated 41
296301 by the member or, if not survived by a designated beneficiary, to the deceased retired member's 42
297302 legal representative; provided the retired member has elected, when first eligible, to make, and 43
298303 has continuously made, in advance of the member's death required contributions as determined 44
299304 by the Board of Trustees on a fully contributory basis, through retirement allowance deductions 45
300305 or other methods adopted by the Board of Trustees, to a group death benefit trust fund, the North 46
301306 Carolina Teachers' and State Employees' Benefit Trust, administered by the Board of Trustees 47
302307 Fund and Pension Accumulation Fund.paid. 48
303308 (c) This Death Benefit Amount. – The lump sum death benefit payable under this section 49
304309 shall be a lump-sum payment in the amount of one of the following amounts: 50 General Assembly Of North Carolina Session 2025
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306311 (1) If the death occurred on or after the first day of the twenty-fifth month of 1
307312 coverage under this section, the amount payable is ten thousand dollars 2
308313 ($10,000) upon the completion of 24 months of contributions required under 3
309314 this subsection. Should death occur ($10,000). 4
310315 (2) If the death occurred before the completion of 24 months of contributions 5
311316 required under this subsection, the deceased retired member's designated 6
312317 beneficiary or beneficiaries, or legal representative if not survived by a 7
313318 designated beneficiary, shall be paid first day of the twenty-fifth month of 8
314319 coverage under this section, the amount payable is the sum of the retired 9
315320 member's contributions required by this subsection premium payments made 10
316321 in accordance with this section plus interest in an amount to be determined by 11
317322 the Board of Trustees. 12
318323 "§ 135-180. Death benefits; workers' compensation benefits and Disability Income Plan 13
319324 beneficiaries. 14
320325 (a) Eligibility. – A member who is a beneficiary of the Disability Income Plan provided 15
321326 for in Article 6 of this Chapter, or a member who is in receipt of Workers' Compensation workers' 16
322327 compensation benefits during the period for which he or she the member would have otherwise 17
323328 been eligible to receive short-term benefits or extended short-term benefits and as provided in 18
324329 G.S. 135-105 benefits under G.S. 135-105 is eligible for death benefits under the Death Benefit 19
325330 Plan in accordance with this section if all of the following criteria are met: 20
326331 (1) The member is not retired. 21
327332 (2) The member is not eligible for death benefits under G.S. 135-165. 22
328333 (3) The member dies on or after 181 days from the last day of his or her actual 23
329334 service the member performed work as a teacher or State employee but prior 24
330335 to the date the workers' compensation benefits or benefits as provided in 25
331336 G.S. 135-105 under the Disability Income Plan would have ended, shall be 26
332337 eligible for group life insurance benefits as provided in this subsection, 27
333338 notwithstanding that the member is no longer an employee or teacher or that 28
334339 the member's death occurs after the eligibility period after active 29
335340 service.ended. 30
336341 (b) Benefits Upon Death. – Upon receipt of proof of the death of a member eligible for 31
337342 benefits under subsection (a) of this section that is satisfactory to the Board of Trustees, a lump 32
338343 sum death benefit amount shall be paid. 33
339344 (c) Benefit Amount. – The basis of the death benefit payable hereunder under this section 34
340345 shall be the higher of the death benefit computed as above amount calculated in accordance with 35
341346 G.S. 135-165(c) or a the death benefit amount based on compensation used in computing the 36
342347 benefit payable under G.S. 135-105 and G.S. 135-106, as may be adjusted for percentage 37
343348 post-disability increases, all subject to but shall not exceed the maximum dollar limitation as 38
344349 provided above.for the death benefit for in-service members under G.S. 135-165. 39
345350 (d) Exceptions. – A member in receipt of benefits from the Disability Income Plan under 40
346351 the provisions of G.S. 135-112 whose right to a benefit accrued under the former Disability 41
347352 Salary Continuation Plan shall not be covered under the provisions of this paragraph.entitled to 42
348353 benefits under the Death Benefit Plan under this Article. 43
349354 "§ 135-185. Beneficiaries under the Death Benefit Plan. 44
350355 (a) Designation. – A member shall designate a beneficiary or beneficiaries for each 45
351356 applicable benefit payable under this Article by electronic submission in a form approved by the 46
352357 Board of Trustees or by written designation duly acknowledged and filed with the Board of 47
353358 Trustees. 48
354359 (b) Benefits Payable. – Each applicable benefit payable under this Article shall be paid 49
355360 to the designated beneficiary or beneficiaries to receive the benefit. If no beneficiaries are 50 General Assembly Of North Carolina Session 2025
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357362 designated or living at the time of the member's death, then the benefit shall be paid to the 1
358363 member's legal representative. 2
359364 "§ 135-190. Reciprocity of Death Benefit Plan. 3
360365 (a) Reciprocity of Death Benefit Plan. – Only for the purpose of determining eligibility 4
361366 for the death benefit benefits provided for in subsection (l) of this section, under this Article, 5
362367 membership service standing to the credit of (i) a member of the Legislative Retirement System 6
363368 or the Consolidated Judicial Retirement System or (ii) a retired member of the Legislative 7
364369 Retirement System or the Consolidated Judicial Retirement System whose retirement benefit was 8
365370 suspended upon entrance into membership in the Teachers' and State Employees' Retirement 9
366371 System shall be added to the membership service standing to the credit of a member of the 10
367372 Teachers' and State Employees' Retirement System. However, in the event that a participant or 11
368373 beneficiary is a retired member of the Legislative Retirement System or the Consolidated Judicial 12
369374 Retirement System whose retirement benefit was suspended upon entrance into membership in 13
370375 the Teachers' and State Employees' Retirement System, such membership service standing to the 14
371376 credit of the retired member prior to retirement shall be likewise counted. 15
372377 (b) Prohibitions. – Membership service under this section shall not be counted twice for 16
373378 the same period of time. 17
374379 "§ 135-195. Accumulated contributions separate. 18
375380 Such death benefit Death benefit amounts payable under this Article shall be payable apart 19
376381 and separate from the payment of the member's accumulated contributions under the Retirement 20
377382 System on his the member's death pursuant to the provisions of subsection (f) of this 21
378383 section.G.S. 135-5. 22
379384 "§ 135-200. Benefits disallowed under this Article. 23
380385 In Notwithstanding anything in this Article to the contrary, no event shall a death benefit 24
381386 provided for in G.S. 135-5(l) under this Article shall be paid at the death of a member if a death 25
382387 benefit is paid related to that member under G.S. 135-63." 26
383388 27
384389 PART II. TECHNICAL RECODIFICATION AND STANDARDIZATION OF THE 28
385390 DEATH BENEFIT PLAN FOR MEMBERS OF THE LOCAL GOVERNMENTAL 29
386391 EMPLOYEES' RETIREMENT SYSTEM 30
387392 SECTION 4.(a) Article 3 of Chapter 128 of the General Statutes is amended to add 31
388393 a new Part 1 to be entitled "Local Governmental Employees Retirement System" consisting of 32
389394 G.S. 128-21 through G.S. 128-38.29. 33
390395 SECTION 4.(a1) Article 3 of Chapter 128 of the General Statutes is amended to add 34
391396 a new Part 2 to be entitled "Local Governmental Death Benefit Plan" that consists of the 35
392397 following new sections: 36
393398 (1) G.S. 128-38.30. 37
394399 (2) G.S. 128-38.31. 38
395400 (3) G.S. 128-38.35. 39
396401 (4) G.S. 128-38.36. 40
397402 (5) G.S. 128-38.40. 41
398403 (6) G.S. 128-38.45. 42
399404 (7) G.S. 128-38.46. 43
400405 SECTION 4.(b) The caption and the second sentence of G.S. 128-27(l) are 44
401406 recodified as subsection (a) of G.S. 128-38.30. 45
402407 SECTION 4.(c) The third, fourth, and fifth sentences of the first paragraph of 46
403408 G.S. 128-27(l) are recodified as subsection (b) of G.S. 128-38.30. 47
404409 SECTION 4.(d) The seventh paragraph of G.S. 128-27(l) is recodified as subsection 48
405410 (a) of G.S. 128-38.31. 49
406411 SECTION 4.(d1) G.S. 128-28(f1) is recodified as subsection (b) of G.S. 128-38.31. 50 General Assembly Of North Carolina Session 2025
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408413 SECTION 4.(e) The first sentence of the first paragraph of G.S. 128-27(l) is 1
409414 recodified as the first sentence of subsection (a) of G.S. 128-38.35. 2
410415 SECTION 4.(f) The first sentence of G.S. 128-27(l1) is recodified as the second 3
411416 sentence of subsection (a) of G.S. 128-38.35. 4
412417 SECTION 4.(g) The first sentence of the second paragraph of G.S. 128-27(l) is 5
413418 recodified as subsection (b) of G.S. 128-38.35. 6
414419 SECTION 4.(h) The second sentence of the second paragraph of G.S. 128-27(l) is 7
415420 recodified as subsection (c) of G.S. 128-38.35. 8
416421 SECTION 4.(i) The fourth sentence of the second paragraph of G.S. 128-27(l) is 9
417422 recodified as subsection (d) of G.S. 128-38.35. 10
418423 SECTION 4.(j) Sub-subdivision a. of subdivision (2) of the sixth paragraph of 11
419424 G.S. 128-27(l) is recodified as subdivision (3) of G.S. 128-38.36. 12
420425 SECTION 4.(k) Sub-subdivision b. of subdivision (2) of the sixth paragraph of 13
421426 G.S. 128-27(l) is recodified as subdivision (1) of G.S. 128-38.36. 14
422427 SECTION 4.(l) Sub-subdivision c. of subdivision (2) of the sixth paragraph of 15
423428 G.S. 128-27(l) is recodified as sub-subdivision a. of subdivision (2) of G.S. 128-38.36. 16
424429 SECTION 4.(m) Subdivision (3) of the sixth paragraph of G.S. 128-27(l) is 17
425430 recodified as sub-subdivision b. of subdivision (2) of G.S. 128-38.36. 18
426431 SECTION 4.(n) Subdivision (4) of the sixth paragraph of G.S. 128-27(l) is 19
427432 recodified as sub-subdivision c. of subdivision (2) of G.S. 128-38.36. 20
428433 SECTION 4.(o) The first sentence of the first paragraph of G.S. 128-27(l6) is 21
429434 recodified as subsection (b) of G.S. 128-38.40. 22
430435 SECTION 4.(p) The second paragraph of G.S. 128-27(l6) is recodified as subsection 23
431436 (c) of G.S. 128-38.40. 24
432437 SECTION 4.(q) The third sentence of the second paragraph of G.S. 128-27(l) is 25
433438 recodified as G.S. 128-38.46. 26
434439 SECTION 5.(a) The remainder of subsections (l), (l1), and (l6) of G.S. 128-27 not 27
435440 recodified by Section 4 of this act are repealed. 28
436441 SECTION 5.(b) Subsections (l2), (l3), (l4), and (l5) of G.S. 128-27 are repealed. 29
437442 SECTION 6.(a) G.S. 128-21 reads as rewritten: 30
438443 "§ 128-21. Definitions. 31
439444 The following words and phrases as used definitions apply in this Article, unless a different 32
440445 meaning is plainly required by the context, shall have the following meanings:context: 33
441446 … 34
442447 (6a) "Benefit Trust" means the North Carolina Teachers' and State Employees' 35
443448 Benefit Trust under G.S. 135-154. 36
444449 … 37
445450 (8a) "Death Benefit Plan" means the Local Governmental Death Benefit Plan 38
446451 established under Part 2 of this Article. 39
447452 (8b) "Duly acknowledged" means notarized, including electronic notarization, or 40
448453 verified through an identity authentication service approved by the 41
449454 Department of State Treasurer. 42
450455 …." 43
451456 SECTION 6.(b) Part 2 of Article 3 of Chapter 128 of the General Statutes, as created 44
452457 by Section 4 of this act, reads as rewritten: 45
453458 "Part 2. Local Governmental Death Benefit Plan. 46
454459 "§ 128-38.30. Death Benefit Plan established. 47
455460 (a) Death Benefit Plan. – There is hereby created a Group Life Insurance Plan (hereinafter 48
456461 called the "Plan") which is established as the Local Governmental Death Benefit Plan, a group 49
457462 life insurance plan that is an employee welfare benefit plan that is separate and apart from the 50 General Assembly Of North Carolina Session 2025
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459464 Retirement System and under which the members of the Retirement System shall participate and 1
460465 be eligible for group life insurance benefits.System. 2
461466 (b) Benefit Trust. – The Death Benefit Plan shall be part of the North Carolina Teachers' 3
462467 and State Employees' Benefit Trust, as established under G.S. 135-7(g). Trust. All receipts, 4
463468 transfers, appropriations, contributions, investment earnings, and other income belonging to the 5
464469 Death Benefit Plan shall be deposited in the Benefit Trust. All benefits and expenses against the 6
465470 Death Benefit Plan shall be disbursed from the Benefit Trust. 7
466471 "§ 128-38.31. Administration of Death Benefit Plan. 8
467472 (a) Provisions Applicable. – The Death Benefit Plan is administered by the Board of 9
468473 Trustees. The provisions of the Retirement System pertaining to administration, G.S. 128-28, and 10
469474 management of funds, G.S. 128-29, are hereby made G.S. 128-28 and G.S. 128-29 are applicable 11
470475 to the Death Benefit Plan. 12
471476 (b) Effect of Vote Related to Contributory Death Benefit. – No decision of the Board of 13
472477 Trustees related to the Contributory Death Benefit fully contributory death benefit for retirees 14
473478 provided for under this Article Part shall take effect unless and until this same decision has been 15
474479 made and voted on by the Board of Trustees of the Teachers' and State Employees' Retirement 16
475480 System. 17
476481 (c) Rulemaking. – The Board of Trustees may adopt temporary or permanent rules, as 18
477482 necessary, for all aspects of administration of this Part. 19
478483 "§ 128-38.35. Death benefit for in-service members. 20
479484 (a) The provisions of this subsection shall become effective for any employer only after 21
480485 Participation. – Benefits under this section are only available to an otherwise eligible in-service 22
481486 member if that member's employer has opted to participate in the Death Benefit Plan or if the 23
482487 member is a law enforcement officer. All of the following apply: 24
483488 (1) If an employer elects to participate in the Death Benefit Plan with regards to 25
484489 in-service members who are not law enforcement officers employed by the 26
485490 employer, then an agreement to that effect has been shall be executed by the 27
486491 employer and the Executive Director of the Retirement System. Under all 28
487492 requirements and conditions as otherwise provided for in subsection (l) of this 29
488493 section, except for the requirement that the provisions are effective only after 30
489494 an agreement has been executed by the employer and the Executive Director 31
490495 of the Retirement Systems Division, Participation in, and eligibility for death 32
491496 benefits under, the Death Benefit Plan in accordance with this section shall be 33
492497 begin only after this agreement has been executed. 34
493498 (2) Employers are required to participate in the Death Benefit Plan with regard to 35
494499 all law enforcement officers employed by the employer who are members of 36
495500 the Retirement System shall participate and be eligible for group life insurance 37
496501 benefits under the Group Life Insurance Plan, and employers shall fund the 38
497502 cost of these benefits. 39
498503 (a1) Eligibility. – Subject to employer participation in the Death Benefit Plan for members 40
499504 who are not law enforcement officers, a member who has not retired and who has completed at 41
500505 least one full year of membership in the Retirement System is a participant in, and eligible for 42
501506 the death benefits under, the Death Benefit Plan in accordance with this section. 43
502507 (b) Benefits Upon Death While in Service. – If a member eligible for benefits under this 44
503508 section dies while in service, then, upon receipt of proof, proof of the death that is satisfactory to 45
504509 the Board of Trustees in their capacity as trustees under the Group Life Insurance Plan, of the 46
505510 death, in service, of a member who had completed at least one full calendar year of membership 47
506511 in the Retirement System, there Trustees, a lump sum death benefit amount shall be paid to such 48
507512 person as the member shall have nominated by electronic submission in a form approved by the 49
508513 Board of Trustees or by written designation duly acknowledged and filed with the Board of 50 General Assembly Of North Carolina Session 2025
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510515 Trustees, if such person is living at the time of the member's death, otherwise to the member's 1
511516 legal representatives, a death benefit.paid. 2
512517 (c) Such death Death Benefit Amount. – Subject to a minimum of twenty-five thousand 3
513518 dollars ($25,000) and to a maximum of fifty thousand dollars ($50,000), the lump sum death 4
514519 benefit shall be amount payable under this section is equal to the greater of:of the following 5
515520 amounts: 6
516521 (1) The compensation on which contributions to the Retirement System were 7
517522 made by the member during the calendar year preceding the year in which his 8
518523 the member's death occurs, oroccurred. 9
519524 (2) The greatest compensation on which contributions to the Retirement System 10
520525 were made by the member during a 12-month period of service within the 11
521526 24-month period of service ending on the last day of the month preceding the 12
522527 month in which his the member's last day of actual service occurs; 13
523528 subject to a minimum of twenty-five thousand dollars ($25,000) and a 14
524529 maximum of fifty thousand dollars ($50,000).occurred. 15
525530 (d) Members Deemed to be in Service. – For the purpose of the Plan, section, a member 16
526531 shall be deemed to be in service at the date of his the member's death if his the death occurs 17
527532 within 180 days from the last day of his actual service.service, as determined in accordance with 18
528533 G.S. 128-38.36. 19
529534 "§ 128-38.36. Last day of actual service; death benefit for in-service members. 20
530535 To determine the last day of actual service for the purposes of a death benefit for in-service 21
531536 members, all of the following apply: 22
532537 (1) When the employee has not been terminated, Uninterrupted service. – For 23
533538 members with uninterrupted service, the last day of actual service is the date 24
534539 on which an absent member's sick and annual leave expire.expire unless the 25
535540 member is on an approved leave of absence and is deemed to be in service 26
536541 under G.S. 128-26(g). If a member is deemed to be in service under 27
537542 G.S. 128-26(g), then the last day of actual service is the last day for which the 28
538543 member made a contribution to the Retirement System. 29
539544 (2) Interrupted service. – All of the following apply to a member whose service 30
540545 has been interrupted: 31
541546 a. When a member's For a member whose service is interrupted by reason 32
542547 of service in the Uniformed Services, as that term is defined in section 33
543548 4303(16) of the Uniformed Services Employment and Reemployment 34
544549 Rights Act, Public Law 103-353, and the participant member does not 35
545550 return immediately after that service to employment with a covered 36
546551 employer in this the Retirement System, the last day of actual service 37
547552 is the date on which the participant member was first eligible to be 38
548553 separated or released from his or her involuntary military service. 39
549554 b. For a period when a member who is on an approved leave of absence, 40
550555 his status with respect to the death benefit will be determined by the 41
551556 provisions of G.S. 128-26(g).but who is not deemed to be in service 42
552557 under G.S. 128-26(g), the last day of actual service is either the last 43
553558 day for which the member made a contribution to the Retirement 44
554559 System or the date on which the member's sick and annual leave 45
555560 expired, whichever is later. 46
556561 c. A member on leave of absence from his a position as a local 47
557562 governmental employee for the purpose of serving as a member or 48
558563 officer of the North Carolina General Assembly shall be deemed to be 49
559564 in service during sessions of the General Assembly and thereby 50
560565 covered by the provisions of the death benefit, if applicable. The 51 General Assembly Of North Carolina Session 2025
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562567 eligible for the death benefit under G.S. 128-38.35. The last day of 1
563568 actual service shall be the most recent legislative day of the applicable 2
564569 General Assembly session or the last day the member performed work 3
565570 as a local governmental employee, whichever is later. Notwithstanding 4
566571 G.S. 128-38.35(c), the amount of the death benefit for such a member 5
567572 who is on a leave of absence due to General Assembly service shall be 6
568573 the equivalent of the salary to which the member would have been 7
569574 entitled as a local governmental employee during the 12-month period 8
570575 immediately prior to the month in which death occurred, not to be less 9
571576 than subject to a minimum of twenty-five thousand dollars ($25,000) 10
572577 nor to exceed and a maximum of fifty thousand dollars ($50,000). 11
573578 (3) When the employee Terminated service. – For a member whose employment 12
574579 has been terminated, terminated for reasons other than retirement, whether by 13
575580 the employer or the employee, the last day of actual service is the last day the 14
576581 member actually worked.performed work as a local governmental employee. 15
577582 "§ 128-38.40. Fully contributory death benefit for retired members. 16
578583 (a) Participation and Premiums. – All retired members may elect to participate in the 17
579584 Death Benefit Plan and therefore become eligible to receive death benefits under the Death 18
580585 Benefit Plan in accordance with this section. Elections shall be made prior to death and no later 19
581586 than 60 calendar days from the effective date of the member's retirement. Elections shall be 20
582587 received by the Board of Trustees prior to the death of the retired member. Retired members 21
583588 electing to receive a fully contributory death benefit under the Death Benefit Plan shall 22
584589 continuously pay monthly premiums on a fully contributory basis, as determined by the Board 23
585590 of Trustees, to the North Carolina Teachers' and State Employees' Benefit Trust established under 24
586591 G.S. 135-7(g). Premium payments shall be made through retirement allowance deductions or 25
587592 other methods adopted by the Board of Trustees. 26
588593 (b) Benefits Upon Death. – If a retired member who has elected to receive a fully 27
589594 contributory death benefit under this section dies, then, upon receipt of proof, proof of the death 28
590595 that is satisfactory to the Board of Trustees in its capacity under this subsection, of the death of 29
591596 a retired member of the Retirement System on or after January 1, 2015, there Trustees, a lump 30
592597 sum death benefit amount shall be paid a death benefit to the person or persons designated by the 31
593598 member or, if not survived by a designated beneficiary, to the deceased retired member's legal 32
594599 representative; provided the retired member has elected, when first eligible, to make, and has 33
595600 continuously made, in advance of the member's death required contributions as determined by 34
596601 the Board of Trustees on a fully contributory basis, through retirement allowance deductions or 35
597602 other methods adopted by the Board of Trustees, to a group death benefit trust fund, the North 36
598603 Carolina Teachers' and State Employees' Benefit Trust, administered by the Board of Trustees 37
599604 separate and apart from the Retirement System's Annuity Savings Fund and Pension 38
600605 Accumulation Fund.paid. 39
601606 (c) The Death Benefit Amount. – The lump sum death benefit payable under this 40
602607 subsection section shall be a lump-sum payment in the amount of one of the following amounts: 41
603608 (1) If the death occurred on or after the first day of the twenty-fifth month of 42
604609 coverage under this section, then the amount payable is ten thousand dollars 43
605610 ($10,000) upon the completion of 24 months of contributions required under 44
606611 this subsection. Should death occur ($10,000). 45
607612 (2) If the death occurred before the completion of 24 months of contributions 46
608613 required under this subsection, the deceased retired member's designated 47
609614 beneficiary or beneficiaries, or legal representative if not survived by a 48
610615 designated beneficiary, shall be paid first day of the twenty-fifth month of 49
611616 coverage under this section, then the amount payable is the sum of the retired 50
612617 member's contributions required by this subsection premium payments made 51 General Assembly Of North Carolina Session 2025
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614619 in accordance with this section plus interest in an amount to be determined by 1
615620 the Board of Trustees. 2
616621 "§ 128-45. Beneficiaries under the Death Benefit Plan. 3
617622 (a) Designation. – A member shall designate a beneficiary or beneficiaries for each 4
618623 applicable benefit payable under this Part by electronic submission in a form approved by the 5
619624 Board of Trustees or by written designation duly acknowledged and filed with the Board of 6
620625 Trustees. 7
621626 (b) Benefits Payable. – Each applicable benefit payable under this Part shall be paid to 8
622627 the designated beneficiary or beneficiaries to receive the benefit. If no beneficiaries are 9
623628 designated or living at the time of the member's death, then the benefit shall be paid to the 10
624629 member's legal representative. 11
625630 "§ 128-38.46. Accumulated contributions separate. 12
626631 Such death benefit Death benefit amounts payable under this Part shall be payable apart and 13
627632 separate from the payment of the member's accumulated contributions under the Retirement 14
628633 System on his the member's death pursuant to the provisions of subsection (f) of this 15
629634 section.G.S. 128-27(f)." 16
630635 17
631636 PART III. STANDARDIZATION OF DEATH BENEFITS FOR MEMBERS OF THE 18
632637 CONSOLIDATED JUDICIAL RETIREMENT SYSTEM 19
633638 SECTION 7.(a) G.S. 135-53 is amended by adding a new subdivision to read: 20
634639 "(3a) "Benefit Trust" means the North Carolina Teachers' and State Employees' 21
635640 Benefit Trust under G.S. 135-154." 22
636641 SECTION 7.(b) G.S. 135-52 is amended by adding a new subsection to read: 23
637642 "(c) Fully contributory death benefits under this Article are established as a group life 24
638643 insurance plan that is an employee welfare benefit plan that is separate and apart from the 25
639644 Retirement System and administered by the Board of Trustees. Fully contributory death benefits 26
640645 for retirees under this Article are part of the Benefit Trust. All receipts, transfers, appropriations, 27
641646 contributions, investment earnings, and other income associated with the fully contributory death 28
642647 benefits for retirees under this Article shall be deposited in the Benefit Trust. All benefits and 29
643648 expenses against the fully contributory death benefits for retirees under this Article shall be 30
644649 disbursed from the Benefit Trust." 31
645650 SECTION 7.(c) Subsections (b) and (d) of G.S. 135-63 are repealed. 32
646651 SECTION 7.(d) G.S. 135-63, as amended by subsection (c) of this section, reads as 33
647652 rewritten: 34
648653 "§ 135-63. Benefits on death before retirement. 35
649654 (a) Upon In-Service Benefit. – If a member who has completed at least one year of 36
650655 membership service dies while in service, then, upon receipt of proof, proof of the death that is 37
651656 satisfactory to the Board of Trustees, of the death of a member in service, there shall be paid in 38
652657 a lump sum death benefit shall be paid to such person as the beneficiary or beneficiaries that the 39
653658 member shall have nominated designated by electronic submission in a form approved by the 40
654659 Board of Trustees or by written designation duly acknowledged and filed with the Board of 41
655660 Trustees, if such person is Trustees. If no beneficiaries are designated or living at the time of the 42
656661 member's death, otherwise then the death benefit shall be paid to the member's legal 43
657662 representatives, a representative. The amount of the death benefit payable under this subsection 44
658663 is equal to the sum of (i) the member's accumulated contributions, plus (ii) the member's final 45
659664 compensation; provided, however, that if the member has attained his or her fiftieth birthday with 46
660665 at least five years of membership service at the member's date of death, and if the designated 47
661666 recipient of the death benefits is the compensation, unless a member's surviving spouse who 48
662667 survives him or her, and if the spouse so elects, is eligible for and elects to receive a survivor's 49
663668 alternate benefit under subsection (a1) of this section. 50 General Assembly Of North Carolina Session 2025
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665670 (a1) Survivor's Alternate Benefit. – The surviving spouse of a member who was age 50 or 1
666671 older with at least five years of membership service at the time of death may elect a survivor's 2
667672 alternate benefit. If the surviving spouse elects a survivor's alternate benefit, then the lump-sum 3
668673 death benefit provided for herein under subsection (a) of this section shall consist only of a 4
669674 payment equal to the member's final compensation and there shall be paid to the surviving spouse 5
670675 an annual retirement allowance, payable monthly, which monthly. The monthly payments shall 6
671676 commence on the first day of the calendar month coinciding with or next following the death of 7
672677 the member and shall be continued member. All of the following apply to the survivor's alternate 8
673678 benefit: 9
674679 (1) The survivor's alternate benefit shall continue on the first day of each month 10
675680 thereafter until the remarriage or death of the spouse. 11
676681 (2) The amount of any such the survivor's alternate benefit retirement allowance 12
677682 shall be equal to one half of the amount of the retirement allowance to which 13
678683 the member would have been entitled had the member retired under the 14
679684 provisions of G.S. 135-57(a) on the first day of the calendar month coinciding 15
680685 with or next following the member's date of death, reduced by two percent 16
681686 (2%) thereof for each full year, if any, by which the age of the member at his 17
682687 or her date of death exceeds that of the member's spouse. 18
683688 (3) If the retirement allowance to the spouse shall terminate terminates on the 19
684689 remarriage or death of the spouse before the total of the retirement allowance 20
685690 payments made equals the amount of the member's accumulated contributions 21
686691 at date of death, then the excess of such those accumulated contributions over 22
687692 the total of the retirement allowances paid to the spouse shall be paid in a lump 23
688693 sum to such person as the beneficiary or beneficiaries the member shall have 24
689694 nominated designated by electronic submission in a form approved by the 25
690695 Board of Trustees or by written designation duly acknowledged and filed with 26
691696 the Board of Trustees, if such person is Trustees. If no beneficiary is 27
692697 designated or living at the time such payment falls due, otherwise the lump 28
693698 sum payment becomes due under this subdivision, then the lump sum payment 29
694699 shall be made to the former member's legal representatives. 30
695700 … 31
696701 (c) Not in Service Benefit. – Upon receipt of proof, satisfactory to the Board of Trustees, 32
697702 of the death of a member not in service, there shall be paid in a lump sum to such person as the 33
698703 beneficiary that the member shall have nominated designated by electronic submission in a form 34
699704 approved by the Board of Trustees or by written designation duly acknowledged and filed with 35
700705 the Board of Trustees, if such person is Trustees. If no beneficiary is designated or living at the 36
701706 time of the member's death, otherwise the lump sum death benefit shall be paid to the member's 37
702707 legal representatives, a representatives. The lump sum death benefit payable under this 38
703708 subsection is equal to the member's accumulated contributions. 39
704709 …." 40
705710 SECTION 7.(e) Subsections (f) through (j) of G.S. 135-64 are repealed. 41
706711 SECTION 7.(f) G.S. 135-64, as amended by subsection (e) of this section, reads as 42
707712 rewritten: 43
708713 "§ 135-64. Benefits on death after retirement. 44
709714 (a) In the event of the death of If a former member while in receipt of dies after a service 45
710715 retirement allowance pursuant to his retirement under the provisions of G.S. 135-57, G.S. 135-57 46
711716 or after a the former member's sixty-fifth birthday while in receipt of a retirement allowance 47
712717 pursuant to his retirement under the provisions of after a disability retirement under G.S. 135-59, 48
713718 then there shall be paid to the former member's surviving spouse, if any, an annual retirement 49
714719 allowance, payable monthly, which monthly. The monthly payments shall commence on the first 50
715720 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
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717722 continued on the first day of each month thereafter until the remarriage or death of the spouse. 1
718723 The amount of any such the retirement allowance under this subsection shall be equal to one half 2
719724 of the allowance that was payable to the former member for the month immediately prior to his 3
720725 the member's month of death, or which that would have been so payable had an optional mode 4
721726 of payment not been elected under the provisions of G.S. 135-61, reduced by two percent (2%) 5
722727 thereof for each full year, if any, by which the age of the former member at date of death exceeds 6
723728 that of his the spouse. 7
724729 (b) In the event of the death of If a former member dies prior to his the former member's 8
725730 sixty-fifth birthday while in receipt of a after a disability retirement allowance pursuant to his 9
726731 retirement under the provisions of G.S. 135-59, then there shall be paid to the former member's 10
727732 surviving spouse, if any, an annual retirement allowance, payable monthly, which monthly. The 11
728733 monthly payments shall commence on the first day of the calendar month next following the date 12
729734 of death of the former member and shall be continued on the first day of each month thereafter 13
730735 until the remarriage or death of the spouse. The amount of any such the retirement allowance 14
731736 under this subsection shall be equal to one half of the allowance to which the former member 15
732737 would have been entitled under the provisions of G.S. 135-58 if he the member had remained in 16
733738 service from his the disability retirement date to his the date of death with no change in his the 17
734739 former member's final compensation or status and had then retired, reduced by two percent (2%) 18
735740 thereof for each full year, if any, by which the age of the former member at date of death exceeds 19
736741 that of his the spouse. 20
737742 (c) In the event of the death of If a former member dies while in receipt of a retirement 21
738743 allowance under the provisions of G.S. 135-58, 135-60, or 135-61, and if such that former 22
739744 member is not survived by a spouse to whom a retirement allowance is payable under the 23
740745 provisions of subsection (a) or subsection (b) above, of this section nor survived by a beneficiary 24
741746 to whom a monthly survivorship benefit is payable under one of the optional modes of payment 25
742747 under G.S. 135-61, then there shall be paid to such person as a lump sum death benefit to the 26
743748 beneficiary that the member shall have nominated designated by electronic submission in a form 27
744749 approved by the Board of Trustees or by written designation duly acknowledged and filed with 28
745750 the Board of Trustees, if such person is Trustees. If no beneficiary is designated or living at the 29
746751 time of the member's death, otherwise then the lump sum death benefit shall be paid to the 30
747752 member's legal representatives, a representative. The lump sum death benefit payable under this 31
748753 subsection shall be equal to the excess, if any, of the accumulated contributions of the member 32
749754 at his the member's date of retirement over the total of the retirement allowances paid to him the 33
750755 member prior to his death. 34
751756 (d) In the event that If a retirement allowance becomes payable to the spouse of a former 35
752757 member under the provisions of subsection (a) or subsection (b) above, of this section or to the 36
753758 designated survivor of a former member under one of the optional modes of payment under 37
754759 G.S. 135-61, and such that retirement allowance to the spouse shall terminate terminated on the 38
755760 remarriage or death of the spouse, or on the death of spouse or the designated survivor, survivor 39
756761 before the total of the retirement allowances paid to the former member and his the spouse or the 40
757762 designated survivor combined equals the amount of the member's accumulated contributions at 41
758763 his the member's date of retirement, then the excess of such those accumulated contributions over 42
759764 the total of the retirement allowances paid to the former member and his the spouse or the 43
760765 designated survivor combined shall be paid in a lump sum to such person as the beneficiary that 44
761766 the member shall have nominated designated by electronic submission in a form approved by the 45
762767 Board of Trustees or by written designation duly acknowledged and filed with the Board of 46
763768 Trustees, if such person Trustees. If no beneficiary is designated or is living at the time such 47
764769 payment under this subsection falls due, otherwise then the lump sum shall be paid to the former 48
765770 member's legal representatives. 49
766771 (e) In the event of the death of If a retired former judge dies while in receipt of a 50
767772 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
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769774 former judge's surviving spouse, if any, an annual retirement allowance payable monthly, which 1
770775 monthly. The monthly payments shall commence on the first day of the calendar month next 2
771776 following the date of death of the former judge and shall be continued on the first day of each 3
772777 month thereafter until the remarriage or death of the spouse. The amount of any such the 4
773778 retirement allowance under this subsection shall be equal to one half of the allowance that was 5
774779 payable to the former judge for the month immediately prior to his the month of death, reduced 6
775780 by two percent (2%) thereof for each full year, if any, by which the age of the former judge at 7
776781 date of death exceeds that of his the spouse. 8
777782 … 9
778783 (k) Upon the death of a retired member on or after January 1, 2015, there All retired 10
779784 members may elect to participate in the fully contributory death benefit for retirees. All of the 11
780785 following apply to the fully contributory death benefit for retirees: 12
781786 (1) Elections to participate in the fully contributory death benefit for retirees shall 13
782787 be made prior to the member's death and no later than 60 calendar days from 14
783788 the effective date of the member's retirement. Elections shall be received by 15
784789 the Board of Trustees prior to the death of the retired member. 16
785790 (2) Retired members electing to receive a fully contributory death benefit under 17
786791 this subsection shall continuously pay monthly premiums on a fully 18
787792 contributory basis, as determined by the Board of Trustees. Premium 19
788793 payments shall be made through retirement allowance deductions or other 20
789794 methods adopted by the Board of Trustees. 21
790795 (3) If a retired member who has elected to receive a fully contributory death 22
791796 benefit under this subsection dies, then, upon receipt of proof of death that is 23
792797 satisfactory to the Board of Trustees, a lump sum death benefit amount shall 24
793798 be paid a death benefit to the person or persons beneficiary or beneficiaries 25
794799 designated by the member or, if not survived by a designated beneficiary, 26
795800 member. If no beneficiary is designated or living, then the death benefit shall 27
796801 be paid to the deceased retired member's legal representative; provided the 28
797802 retired member has elected, when first eligible, to make, and has continuously 29
798803 made, in advance of the member's death required contributions as determined 30
799804 by the Board of Trustees on a fully contributory basis, through retirement 31
800805 allowance deductions or other methods adopted by the Board of Trustees, to 32
801806 a group death benefit trust fund, the North Carolina Teachers' and State 33
802807 Employees' Benefit Trust, administered by the Board of Trustees separate and 34
803808 apart from the Retirement System's Annuity Savings Fund and Pension 35
804809 Accumulation Fund. Employer and non-employer contributions to the Benefit 36
805810 Trust and earnings on those contributions are irrevocable. The assets of the 37
806811 Benefit Trust are dedicated to providing benefits to members and beneficiaries 38
807812 in accordance with the Plan's benefit terms. The assets of the Benefit Trust are 39
808813 not subject to the claims of creditors of the employees and non-employees 40
809814 making contributions to the Benefit Trust, are not subject to the claims of any 41
810815 creditors of the Benefit Trust's trustees and administrators, and are not subject 42
811816 to the claims of creditors of members and beneficiaries. Benefit Trust assets 43
812817 may be used for reasonable expenses to administer benefits provided by the 44
813818 Fund as approved by the Board of Trustees.representative. 45
814819 (4) The amount of the lump sum fully contributory death benefit payable under 46
815820 this subsection shall be a lump-sum payment in the amount of is one of the 47
816821 following: 48
817822 a. If the death occurred on or after the first day of the twenty-fifth month 49
818823 of coverage under this subsection, then the amount payable is ten 50
819824 thousand dollars ($10,000) upon the completion of 24 months of 51 General Assembly Of North Carolina Session 2025
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821826 contributions required under this subsection. Should death occur 1
822827 ($10,000). 2
823828 b. If the death occurred before the completion of 24 months of 3
824829 contributions required under this subsection, the deceased retired 4
825830 member's designated beneficiary or beneficiaries, or legal 5
826831 representative if not survived by a designated beneficiary, shall be paid 6
827832 first day of the twenty-fifth month of coverage under this subsection, 7
828833 then the amount payable is the sum of the retired member's 8
829834 contributions required by this subsection premium payments made in 9
830835 accordance with this subsection plus interest in an amount to be 10
831836 determined by the Board of Trustees." 11
832837 12
833838 PART IV. STANDARDIZATION OF DEATH BENEFITS FOR MEMBERS OF THE 13
834839 LEGISLATIVE RETIREMENT SYSTEM 14
835840 SECTION 8.(a) G.S. 120-4.8 is amended by adding a new subdivision to read: 15
836841 "(4d) Benefit Trust. – The North Carolina Teachers' and State Employees' Benefit 16
837842 Trust under G.S. 135-154." 17
838843 SECTION 8.(b) G.S. 120-4.10 reads as rewritten: 18
839844 "§ 120-4.10. Administration of retirement system.Article. 19
840845 (a) The Board of Trustees of the Teachers' and State Employees' Retirement System shall 20
841846 be the trustee of the Retirement System. The provisions of this Article shall be administered by 21
842847 the Board of Trustees. 22
843848 (b) Fully contributory death benefits under this Article are established as a group life 23
844849 insurance plan that is an employee welfare benefit plan that is separate and apart from the 24
845850 Retirement System and administered by the Board of Trustees. Fully contributory death benefits 25
846851 for retirees under this Article are part of the Benefit Trust. All receipts, transfers, appropriations, 26
847852 contributions, investment earnings, and other income associated with the fully contributory death 27
848853 benefits for retirees under this Article shall be deposited in the Benefit Trust. All benefits and 28
849854 expenses against the fully contributory death benefits for retirees under this Article shall be 29
850855 disbursed from the Benefit Trust." 30
851856 SECTION 8.(c) G.S. 120-4.26A reads as rewritten: 31
852857 "§ 120-4.26A. Benefits on death after retirement. 32
853858 (a) In the event of the death of If a retired member dies while in receipt of a retirement 33
854859 allowance under the provisions of this Article, there a lump sum death benefit shall be paid to 34
855860 such person or persons as the beneficiary that the retiree shall have nominated designated by 35
856861 electronic submission in a form approved by the Board of Trustees or by written designation duly 36
857862 acknowledged and filed with the Board of Trustees, if such person or persons Trustees. If no 37
858863 beneficiary or beneficiaries are designated or are living at the time of the retiree's death, otherwise 38
859864 then the lump sum death benefit shall be paid to the retiree's legal representatives, a 39
860865 representative. The lump sum death benefit payable under this subsection is equal to the excess, 40
861866 if any, of the accumulated contributions of the retiree at the date of retirement over the total of 41
862867 the retirement allowances paid prior to the death of the retiree. 42
863868 (b) In the event that If a retirement allowance becomes that became payable to the 43
864869 designated survivor of a retired member under the provisions of G.S. 120-4.26 and such 44
865870 retirement allowance to the survivor shall terminate terminates upon the death of the survivor 45
866871 before the total of the retirement allowances paid to the retiree and the designated survivor 46
867872 combined equals the amount of the accumulated contributions of the retiree at the date of 47
868873 retirement, then the excess, if any, excess of such those accumulated contributions over the total 48
869874 of the retirement allowances paid to the retiree and the survivor combined shall be paid in a lump 49
870875 sum to such person or persons as the beneficiary that the retiree shall have nominated designated 50
871876 by electronic submission in a form approved by the Board of Trustees or by written designation 51 General Assembly Of North Carolina Session 2025
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873878 duly acknowledged and filed with the Board of Trustees, if such person or persons are Trustees. 1
874879 If no beneficiary is designated or living at the time such payment falls due, otherwise the lump 2
875880 sum payment becomes due under this subsection, then the payment shall be made to the retiree's 3
876881 legal representative." 4
877882 SECTION 8.(d) G.S. 120-4.27 reads as rewritten: 5
878883 "§ 120-4.27. Death benefit.while in service; fully contributory death benefit for retirees. 6
879884 (a) The designated beneficiary of a member who dies while in service after completing 7
880885 one year of creditable service shall receive a lump-sum payment of an amount equal to the 8
881886 deceased member's highest annual salary, to a maximum of fifteen thousand dollars ($15,000). 9
882887 For purposes of this death benefit "in service" means currently serving as a member of the North 10
883888 Carolina General Assembly. "In service" also means service in the Uniformed Services, as that 11
884889 term is defined in section 4303(16) of the Uniformed Services Employment and Reemployment 12
885890 Rights Act, Public Law 103-353, if that service begins during the member's term of office. If the 13
886891 participant does not return immediately after that service to employment with a covered employer 14
887892 in this Retirement System, then the participant shall be deemed "in service" until the date on 15
888893 which the participant was first eligible to be separated or released from his or her involuntary 16
889894 military service. 17
890895 The death benefit provided by this section shall be designated a group life insurance benefit 18
891896 payable under an employee welfare benefit plan that is separate and apart from the Retirement 19
892897 System but under which the members of the Retirement System shall participate and be eligible 20
893898 for group life insurance benefits. The Board of Trustees is authorized to provide the death benefit 21
894899 in the form of group life insurance either by purchasing a contract or contracts of group life 22
895900 insurance with any life insurance company or companies licensed and authorized to transact 23
896901 business in the State of North Carolina for the purpose of insuring the lives of qualified members 24
897902 in service, or by establishing or affiliating with a separate trust fund. 25
898903 Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 26
899904 of the Retirement System or Retirement Fund on or after July 1, 1988, but before January 1, 27
900905 1999, there shall be paid a death benefit to the surviving spouse of a deceased retired member, 28
901906 or to the deceased retired member's legal representative if not survived by a spouse; provided the 29
902907 retired member has elected, when first eligible, to make, and has continuously made, in advance 30
903908 of his death required contributions as determined by the Retirement System on a fully 31
904909 contributory basis, through retirement allowance deductions or other methods adopted by the 32
905910 Retirement System, to a group death benefit trust fund administered by the Board of Trustees 33
906911 separate and apart from the Retirement System's Annuity Savings Fund and Pension 34
907912 Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of five 35
908913 thousand dollars ($5,000) upon the completion of twenty-four months of contributions required 36
909914 under this subsection. Should death occur before the completion of twenty-four months of 37
910915 contributions required under this subsection, the deceased retired member's surviving spouse or 38
911916 legal representative if not survived by a spouse shall be paid the sum of the retired member's 39
912917 contributions required by this subsection plus interest to be determined by the Board of Trustees. 40
913918 Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 41
914919 of the Retirement System or Retirement Fund on or after January 1, 1999, but before July 1, 42
915920 2004, there shall be paid a death benefit to the surviving spouse of a deceased retired member, 43
916921 or to the deceased retired member's legal representative if not survived by a spouse; provided the 44
917922 retired member has elected, when first eligible, to make, and has continuously made, in advance 45
918923 of his death required contributions as determined by the Retirement System on a fully 46
919924 contributory basis, through retirement allowance deductions or other methods adopted by the 47
920925 Retirement System, to a group death benefit trust fund administered by the Board of Trustees 48
921926 separate and apart from the Retirement System's Annuity Savings Fund and Pension 49
922927 Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of six 50
923928 thousand dollars ($6,000) upon the completion of 24 months of contributions required under this 51 General Assembly Of North Carolina Session 2025
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925930 subsection. Should death occur before the completion of 24 months of contributions required 1
926931 under this subsection, the deceased retired member's surviving spouse or legal representative if 2
927932 not survived by a spouse shall be paid the sum of the retired member's contributions required by 3
928933 this subsection plus interest to be determined by the Board of Trustees. 4
929934 Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 5
930935 of the Retirement System or Retirement Fund on or after July 1, 2004, but before July 1, 2007, 6
931936 there shall be paid a death benefit to the surviving spouse of a deceased retired member, or to the 7
932937 deceased retired member's legal representative if not survived by a spouse; provided the retired 8
933938 member has elected, when first eligible, to make, and has continuously made, in advance of his 9
934939 death required contributions as determined by the Retirement System on a fully contributory 10
935940 basis, through retirement allowance deductions or other methods adopted by the Retirement 11
936941 System, to a group death benefit trust fund administered by the Board of Trustees separate and 12
937942 apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund. This 13
938943 death benefit shall be a lump-sum payment in the amount of nine thousand dollars ($9,000) upon 14
939944 the completion of 24 months of contributions required under this subsection. Should death occur 15
940945 before the completion of 24 months of contributions required under this subsection, the deceased 16
941946 retired member's surviving spouse or legal representative if not survived by a spouse shall be 17
942947 paid the sum of the retired member's contributions required by this subsection plus interest to be 18
943948 determined by the Board of Trustees. 19
944949 Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 20
945950 of the Retirement System or Retirement Fund on or after July 1, 2007, but before January 1, 21
946951 2015, there shall be paid a death benefit to the surviving spouse of a deceased retired member, 22
947952 or to the deceased retired member's legal representative if not survived by a spouse; provided the 23
948953 retired member has elected, when first eligible, to make, and has continuously made, in advance 24
949954 of his death required contributions as determined by the Retirement System on a fully 25
950955 contributory basis, through retirement allowance deductions or other methods adopted by the 26
951956 Retirement System, to a group death benefit trust fund administered by the Board of Trustees 27
952957 separate and apart from the Retirement System's Annuity Savings Fund and Pension 28
953958 Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of ten 29
954959 thousand dollars ($10,000) upon the completion of 24 months of contributions required under 30
955960 this subsection. Should death occur before the completion of 24 months of contributions required 31
956961 under this subsection, the deceased retired member's surviving spouse or legal representative if 32
957962 not survived by a spouse shall be paid the sum of the retired member's contributions required by 33
958963 this subsection plus interest to be determined by the Board of Trustees. 34
959964 Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 35
960965 of the Retirement System or Retirement Fund on or after January 1, 2015, there 36
961966 (b) All retired members may elect to participate in a fully contributory death benefit for 37
962967 retirees. All of the following apply to the fully contributory death benefit for retirees: 38
963968 (1) Elections to participate in the fully contributory death benefit for retirees shall 39
964969 be made prior to the member's death and no later than 60 calendar days from 40
965970 the effective date of the member's retirement. Elections shall be received by 41
966971 the Board of Trustees prior to the death of the retired member. 42
967972 (2) Retired members electing to receive a fully contributory death benefit under 43
968973 this subsection shall continuously pay monthly premiums on a fully 44
969974 contributory basis, as determined by the Board of Trustees. Premium 45
970975 payments shall be made through retirement allowance deductions or other 46
971976 methods adopted by the Board of Trustees. 47
972977 (3) If a retired member who has elected to receive a fully contributory death 48
973978 benefit under this subsection dies, then, upon receipt of proof of the death that 49
974979 is satisfactory to the Board of Trustees, a lump sum death benefit amount shall 50
975980 be paid a death benefit to the person or persons beneficiary or beneficiaries 51 General Assembly Of North Carolina Session 2025
976-Page 20 Senate Bill 359-First Edition
981+Page 20 DRS55015-MRp-1H
977982 designated by the member or, if not survived by a designated beneficiary, 1
978983 member. If no beneficiary is designated or living, then the death benefit shall 2
979984 be paid to the deceased retired member's legal representative; provided the 3
980985 retired member has elected, when first eligible, to make, and has continuously 4
981986 made, in advance of the member's death required contributions as determined 5
982987 by the Retirement System on a fully contributory basis, through retirement 6
983988 allowance deductions or other methods adopted by the Retirement System, to 7
984989 a group death benefit trust fund, the North Carolina Teachers' and State 8
985990 Employees' Benefit Trust, administered by the Board of Trustees separate and 9
986991 apart from the Retirement System's Annuity Savings Fund and Pension 10
987992 Accumulation Fund. Employer and non-employer contributions to the Benefit 11
988993 Trust and earnings on those contributions are irrevocable. The assets of the 12
989994 Benefit Trust are dedicated to providing benefits to members and beneficiaries 13
990995 in accordance with the Plan's benefit terms. The assets of the Benefit Trust are 14
991996 not subject to the claims of creditors of the employees and non-employees 15
992997 making contributions to the Benefit Trust, are not subject to the claims of any 16
993998 creditors of the Benefit Trust's trustees and administrators, and are not subject 17
994999 to the claims of creditors of members and beneficiaries. Benefit Trust assets 18
9951000 may be used for reasonable expenses to administer benefits provided by the 19
9961001 Fund as approved by the Board of Trustees.representative. 20
9971002 (4) A member shall designate a beneficiary or beneficiaries for the death benefit 21
9981003 payable under this subsection by electronic submission in a form approved by 22
9991004 the Board of Trustees or by written designation duly acknowledged and filed 23
10001005 with the Board of Trustees. 24
10011006 (5) The amount of the lump sum fully contributory death benefit payable under 25
10021007 this subsection shall be a lump-sum payment in the amount of is one of the 26
10031008 following: 27
10041009 a. If the death occurred on or after the first day of the twenty-fifth month 28
10051010 of coverage under this subsection, then the amount payable is ten 29
10061011 thousand dollars ($10,000) upon the completion of 24 months of 30
10071012 contributions required under this subsection. Should death occur 31
10081013 ($10,000). 32
10091014 b. If the death occurred before the completion of 24 months of 33
10101015 contributions required under this subsection, the deceased retired 34
10111016 member's designated beneficiary or beneficiaries, or legal 35
10121017 representative if not survived by a designated beneficiary, shall be paid 36
10131018 first day of the twenty-fifth month of coverage under this subsection, 37
10141019 then the amount payable is the sum of the retired member's 38
10151020 contributions required by premium payments made in accordance with 39
10161021 this subsection plus interest in an amount to be determined by the 40
10171022 Board of Trustees." 41
10181023 42
10191024 PART V. TECHNICAL AND CONFORMING CHANGES RELATED TO 43
10201025 RECODIFICATION AND STANDARDIZATION 44
10211026 SECTION 9.(a) G.S. 135-5(m) reads as rewritten: 45
10221027 "(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 46
10231028 designated to receive a return of accumulated contributions shall have the right to elect to receive 47
10241029 in lieu thereof the reduced retirement allowance provided by Option 2 of subsection (g) above of 48
10251030 this section computed by assuming that the member had retired on the first day of the month 49
10261031 following the date of the member's death, provided that all four of the following conditions apply: 50
10271032 … 51 General Assembly Of North Carolina Session 2025
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1033+DRS55015-MRp-1H Page 21
10291034 For the purpose of this benefit, a member is considered to be in service at the date of his the 1
10301035 member's death if his the death occurs within 180 days from the last day of his the member's 2
10311036 actual service. The last day of actual service shall be determined as provided in subsection (l) of 3
10321037 this section. G.S. 135-170. Upon the death of a member in service, the surviving spouse may 4
10331038 make all purchases for creditable service as provided for under this Chapter Article for which the 5
10341039 member had made application in writing prior to the date of death, provided that the date of death 6
10351040 occurred prior to or within 60 days after notification of the cost to make the purchase. The term 7
10361041 "in service" as used in this subsection includes a member in receipt of a benefit under the 8
10371042 Disability Income Plan as provided in Article 6 of this Chapter. 9
10381043 …." 10
10391044 SECTION 9.(b) G.S. 128-27(m) reads as rewritten: 11
10401045 "(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 12
10411046 designated to receive a return of accumulated contributions shall have the right to elect to receive 13
10421047 in lieu thereof the reduced retirement allowance provided by Option two of subsection (g) above 14
10431048 of this section computed by assuming that the member had retired on the first day of the month 15
10441049 following the date of the member's death, provided that all four of the following conditions apply: 16
10451050 … 17
10461051 For the purpose of this benefit, a member is considered to be in service at the date of his the 18
10471052 member's death if his the death occurs within 180 days from the last day of his the member's 19
10481053 actual service. The last day of actual service shall be determined as provided in subsection (l) of 20
10491054 this section. G.S. 128-38.36. Upon the death of a member in service, the surviving spouse may 21
10501055 make all purchases for creditable service as provided for under this Chapter for which the 22
10511056 member had made application in writing prior to the date of death, provided that the date of death 23
10521057 occurred prior to or within 60 days after notification of the cost to make the purchase. 24
10531058 …." 25
10541059 SECTION 10.(a) G.S. 135-3(c) reads as rewritten: 26
10551060 "(c) Members who are participating in an intergovernmental exchange of personnel under 27
10561061 the provisions of Article 10 of Chapter 126 may retain their membership status and receive all 28
10571062 benefits provided by this Chapter during the period of the exchange provided the requirements 29
10581063 of Article 10 of Chapter 126 are met; provided further, that a met. A member participating in an 30
10591064 intergovernmental exchange of personnel under Article 10 of Chapter 126 shall, notwithstanding 31
10601065 whether the member and the member's employer are making contributions to the member's 32
10611066 account during the exchange period, be entitled to the death benefit and, if applicable, benefits 33
10621067 under the Death Benefit Plan under Article 8 of this Chapter, if the member otherwise qualifies 34
10631068 under the provisions of this Article and provided further Article, except that no duplicate benefits 35
10641069 shall be paid." 36
10651070 SECTION 10.(b) G.S. 128-24(6) reads as rewritten: 37
10661071 "(6) Employees of a sending agency participating in an intergovernmental exchange of 38
10671072 personnel under the provisions of Article 10 of Chapter 126 shall remain members entitled to all 39
10681073 benefits of the Retirement System provided that the requirements of Article 10 of Chapter 126 40
10691074 are met; provided further, that a met. A member may retain membership status while serving as 41
10701075 an assigned employee or employee on leave under the provisions of Article 10 of Chapter 126 42
10711076 for purposes of receiving the death benefit and, if applicable, benefits under the Death Benefit 43
10721077 Plan regardless of whether he and his the member and the member's employer are contributing 44
10731078 to his the member's account during the exchange period period, except that no duplicate benefits 45
10741079 shall be paid." 46
10751080 SECTION 11.(a) G.S. 135-8(f) reads as rewritten: 47
10761081 "(f) Collection of Contributions. – The following shall apply apply to the collection of 48
10771082 contributions:contributions under this Chapter: 49
10781083 …." 50
10791084 SECTION 11.(b) G.S. 128-30(g) reads as rewritten: 51 General Assembly Of North Carolina Session 2025
1080-Page 22 Senate Bill 359-First Edition
1085+Page 22 DRS55015-MRp-1H
10811086 "(g) Collection of Contributions. – The following shall apply apply to the collection of 1
10821087 contributions:contributions under this Article: 2
10831088 …." 3
10841089 SECTION 12.(a) G.S. 143-166.60(b) reads as rewritten: 4
10851090 "(b) The Boards of Trustees of the Teachers' and State Employees' Retirement System and 5
10861091 the Local Governmental Employees' Retirement System shall jointly administer the Plan and 6
10871092 shall, under the terms and conditions otherwise appearing in this Article, provide Plan benefits 7
10881093 either (i) by establishing a separate trust fund or, (ii) by causing the Plan to affiliate with a master 8
10891094 trust, Plan. The Separate Insurance Benefits Plan is part of the North Carolina Teachers' and State 9
10901095 Employees' Benefits Trust, providing the same benefits for participants. Employer and 10
10911096 non-employer contributions to the Benefit Trust and earnings on those contributions are 11
10921097 irrevocable. The assets of the Benefit Trust are dedicated to providing benefits to participants, 12
10931098 surviving spouses, participants' estates, and persons named by the participant to receive the 13
10941099 benefit. The assets of the Benefit Trust are not subject to the claims of creditors of the employees 14
10951100 and non-employees making contributions to the Benefit Trust, are not subject to the claims of 15
10961101 any creditors of the Benefit Trust's trustees and administrators, and are not subject to the claims 16
10971102 of creditors of participants. Benefit Trust assets may be used for reasonable expenses to 17
10981103 administer benefits provided by the Fund as approved by the Board of Trustees.Benefit Trust 18
10991104 established under G.S. 135-154. All receipts, transfers, appropriations, contributions, investment 19
11001105 earnings, and other income belonging to the Separate Insurance Benefits Plan shall be deposited 20
11011106 in the Benefit Trust. All benefits and expenses against the Separate Insurance Benefits Plan for 21
11021107 retirees shall be disbursed from the Benefit Trust." 22
11031108 SECTION 12.(b) G.S. 143-166.70(5) is expired. 23
11041109 24
11051110 PART VI. SURVIVOR'S ALTERNATE BENEFIT CHANGES 25
11061111 SECTION 13.(a) G.S. 135-5(m)(1) expires June 30, 2025. 26
11071112 SECTION 13.(b) G.S. 135-5(m), as amended by Section 9(a) of this act, reads as 27
11081113 rewritten: 28
11091114 "(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 29
11101115 designated to receive a return of accumulated contributions shall have the right to elect to receive 30
11111116 in lieu thereof the reduced retirement allowance provided by Option 2 of subsection (g) of this 31
11121117 section computed by assuming that the member had retired on the first day of the month following 32
11131118 the date of the member's death, provided that all four of the following conditions apply: 33
11141119 … 34
11151120 (1a) The member falls into one of the following categories: 35
11161121 a. The member had attained the minimum age, creditable service amount, 36
11171122 or combination of both necessary to be eligible to commence 37
11181123 retirement with an early or service retirement allowance. 38
11191124 b. The member had completed at least five years of membership service, 39
11201125 in which case the retirement allowance shall be computed in 40
11211126 accordance with G.S. 135-5(b21)(1)c. or G.S. 135-5(b21)(2)c., 41
11221127 whichever is applicable, notwithstanding any age or service 42
11231128 requirements. In no case shall the retirement allowance under this 43
11241129 sub-subdivision be less than the actuarial equivalent of the return of 44
11251130 accumulated contributions, computed using the beneficiary's age as of 45
11261131 the first day of the month following the date of the member's death. 46
11271132 (2) At the time of the member's death, one and only one beneficiary is eligible to 47
11281133 receive a return of his the member's accumulated contributions. 48
11291134 (3) The member had not instructed the Board of Trustees in writing that he the 49
11301135 member did not wish the provisions of this subsection to apply. 50 General Assembly Of North Carolina Session 2025
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1136+DRS55015-MRp-1H Page 23
11321137 (4) The member had not commenced to receive a retirement allowance as 1
11331138 provided under this Chapter. 2
11341139 …." 3
11351140 SECTION 13.(c) Subsection (b) of this section is effective July 1, 2025, and applies 4
11361141 to member deaths occurring on or after that date. 5
11371142 SECTION 14.(a) G.S. 128-27(m)(1) expires on June 30, 2025. 6
11381143 SECTION 14.(b) G.S. 128-27(m), as amended by Section 9(b) of this act, reads as 7
11391144 rewritten: 8
11401145 "(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 9
11411146 designated to receive a return of accumulated contributions shall have the right to elect to receive 10
11421147 in lieu thereof the reduced retirement allowance provided by Option two of subsection (g) of this 11
11431148 section computed by assuming that the member had retired on the first day of the month following 12
11441149 the date of the member's death, provided that all four of the following conditions apply: 13
11451150 … 14
11461151 (1a) The member falls into one of the following categories: 15
11471152 a. The member had attained the minimum age, creditable service amount, 16
11481153 or combination of both necessary to be eligible to commence 17
11491154 retirement with an early or service retirement allowance. 18
11501155 b. The member had completed at least five years of membership service, 19
11511156 in which case the retirement allowance shall be computed in 20
11521157 accordance with G.S. 128-27(b22)(1)c. or G.S. 128-27(b22)(2)c., 21
11531158 whichever is applicable, notwithstanding any age or service 22
11541159 requirements. In no case shall the retirement allowance under this 23
11551160 sub-subdivision be less than the actuarial equivalent of the return of 24
11561161 accumulated contributions, computed using the beneficiary's age as of 25
11571162 the first day of the month following the date of the member's death. 26
11581163 (2) At the time of the member's death, one and only one beneficiary is eligible to 27
11591164 receive a return of his the member's accumulated contributions. 28
11601165 (3) The member had not instructed the Board of Trustees in writing that he the 29
11611166 member did not wish the provisions of this subsection apply. 30
11621167 (4) The member had not commenced to receive a retirement allowance as 31
11631168 provided under this Chapter. 32
11641169 …." 33
11651170 SECTION 14.(c) Subsection (b) of this section is effective July 1, 2025, and applies 34
11661171 to member deaths occurring on or after that date. 35
11671172 SECTION 15.(a) G.S. 135-63(a1), as amended by Section 7(d) of this act, reads as 36
11681173 rewritten: 37
11691174 "(a1) Survivor's Alternate Benefit. – The surviving spouse of a member who was age 50 or 38
11701175 older with had completed at least five years of membership service at the time of death may elect 39
11711176 a survivor's alternate benefit. If the surviving spouse elects a survivor's alternate benefit, then the 40
11721177 lump-sum death benefit provided for under subsection (a) of this section shall consist only of a 41
11731178 payment equal to the member's final compensation and there shall be paid to the surviving spouse 42
11741179 an annual retirement allowance, payable monthly. The monthly payments shall commence on the 43
11751180 first day of the calendar month coinciding with or next following the death of the member. All 44
11761181 of the following apply to the survivor's alternate benefit: 45
11771182 …." 46
11781183 SECTION 15.(b) G.S. 120-4.28 reads as rewritten: 47
11791184 "§ 120-4.28. Survivor's alternate benefit. 48
11801185 (a) The designated beneficiary of If a member who dies in service before retirement but 49
11811186 after age 60 and after completing five years of creditable service or after completing 12 years of 50
11821187 creditable service service, then the principal beneficiary designated by that member to receive a 51 General Assembly Of North Carolina Session 2025
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11841189 return of accumulated contributions under G.S. 120-4.25 is entitled to Option 2 prescribed by 1
11851190 G.S. 120-4.26.G.S. 120-4.26, notwithstanding any age or service requirements. 2
11861191 (b) In the event that If a retirement allowance becomes payable under this section to the 3
11871192 principal beneficiary designated to receive a return of accumulated contributions pursuant to this 4
11881193 subsection and that principal beneficiary dies before the total of the retirement allowances paid 5
11891194 equals is equal to or greater than the amount of those the member's accumulated contributions 6
11901195 over the total of the retirement allowances paid to the beneficiary, contributions, then the 7
11911196 allowance excess of those accumulated contributions over the total of the retirement allowance 8
11921197 paid to the principal beneficiary shall be paid in a lump sum to the person or persons the member 9
11931198 has designated as the contingent beneficiary for return of accumulated contributions, if the person 10
11941199 or persons contributions under G.S. 120-4.25. 11
11951200 (c) If a retirement allowance becomes payable under this section and the principal 12
11961201 beneficiary is not living at the time the payment falls due, then the retirement allowance shall be 13
11971202 paid to the contingent beneficiary designated to receive a return of accumulated contributions 14
11981203 under G.S. 120-4.25. If that contingent beneficiary dies before the total of the retirement 15
11991204 allowances paid is equal to or greater than the amount of the member's accumulated 16
12001205 contributions, then the excess of those accumulated contributions over the total of the retirement 17
12011206 allowances paid to the contingent beneficiary shall be paid in a lump sum to the contingent 18
12021207 beneficiary's legal representative. 19
12031208 (d) If no beneficiaries are living at the time the payment required under this section first 20
12041209 falls due, otherwise to then the allowance shall be paid in a lump sum to the principal beneficiary's 21
12051210 legal representative. In the event that a retirement allowance becomes payable to the contingent 22
12061211 beneficiary designated to receive a return of accumulated contributions pursuant to subsection 23
12071212 (m) of this section and that beneficiary dies before the total of the retirement allowances paid 24
12081213 equals the amount of the accumulated contributions of the member at the date of the member's 25
12091214 death, the excess of those accumulated contributions over the total of the retirement allowances 26
12101215 paid to the beneficiary shall be paid in a lump sum to the contingent beneficiary's legal 27
12111216 representative." 28
12121217 SECTION 15.(c) This section is effective July 1, 2025, and applies to member deaths 29
12131218 occurring on or after that date. 30
12141219 31
12151220 PART VII. ENSURE SUFFICIENT FUNDING FOR LINE OF DUTY DEATH 32
12161221 BENEFITS 33
12171222 SECTION 16.(a) G.S. 135-154, as created and amended by Part I of this act, is 34
12181223 amended by adding a new subsection to read: 35
12191224 "(e) Separate Fund for Line of Duty Death Benefits. – The Board of Trustees may make 36
12201225 additional funding available to the Department of State Treasurer to ensure the timely payment 37
12211226 of death benefits awarded by the Industrial Commission under the Public Safety Employees' 38
12221227 Death Benefits Act, Article 12A of Chapter 143 of the General Statutes, by depositing a 39
12231228 percentage of the State's employer contribution rate established for the benefits provided under 40
12241229 G.S. 135-165 into a separate fund from the Benefits Trust. This percentage shall not exceed four 41
12251230 hundredths percent (0.04%) in any given fiscal year. The Department of State Treasurer is 42
12261231 authorized to use the funds deposited into this separate fund for the sole purpose of paying for 43
12271232 death benefits awarded by the Industrial Commission under the Public Safety Employees' Death 44
12281233 Benefits Act and may do so only if all other State funds appropriated to the Department for the 45
12291234 fiscal year for the payment of those death benefits have been fully expended. Any funds deposited 46
12301235 by the Department of State Treasurer into a separate fund in accordance with this subsection that 47
12311236 remain unspent as of June 30 of the same fiscal year shall be transferred to the Benefit Fund as 48
12321237 an additional employer contribution." 49
12331238 SECTION 16.(b) This section becomes effective July 1, 2025. 50
12341239 51 General Assembly Of North Carolina Session 2025
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12361241 PART VIII. EFFECTIVE DATE 1
12371242 SECTION 17. Except as otherwise provided, this act is effective when it becomes 2
12381243 law. 3