H.B. 270
GENERAL ASSEMBLY OF NORTH CAROLINA
Mar 6, 2023
SESSION 2023 HOUSE PRINCIPAL CLERK
H D
HOUSE BILL DRH40152-MGp-92
Short Title: Death Benefits Parity. (Public)
Sponsors: Representative Howard.
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT ESTABLISHING DEATH BENEFITS PARITY FOR MEMBERS OF THE
3 TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE LOCAL
4 GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM, THE LEGISLATIVE
5 RETIREMENT SYSTEM, AND THE CONSOLIDATED JUDICIAL RETIREMENT
6 SYSTEM.
7 The General Assembly of North Carolina enacts:
8
9 PART I. CHANGES TO ESTABLISH DEATH BENEFITS PARITY FOR STATE AND
10 LOCAL GOVERNMENT ACTIVE EMPLOYEES
11 SECTION 1.1. G.S. 135-5(l) reads as rewritten:
12 "(l) Death Benefit Plan. – There is hereby created a Group Life Insurance Plan (hereinafter
13 called the "Plan") which is established as an employee welfare benefit plan that is separate and
14 apart from the Retirement System and under which the members of the Retirement System shall
15 participate and be eligible for group life insurance benefits. The Plan shall be part of the North
16 Carolina Teachers' and State Employees' Benefit Trust, as established under G.S. 135-7(g). All
17 receipts, transfers, appropriations, contributions, investment earnings, and other income
18 belonging to the Plan shall be deposited in the Benefit Trust. All benefits and expenses against
19 the Plan shall be disbursed from the Benefit Trust. Employer and non-employer contributions to
20 the Benefit Trust and earnings on those contributions are irrevocable. The assets of the Benefit
21 Trust are dedicated to providing benefits to participants, surviving spouses, and the members'
22 estates in accordance with the Plan's benefit terms. The assets of the Benefit Trust are not subject
23 to the claims of creditors of the employees and non-employees making contributions to the
24 Benefit Trust, are not subject to the claims of any creditors of the Benefit Trust's trustees and
25 administrators, and are not subject to the claims of creditors of members and beneficiaries.
26 Benefit Trust assets may be used for reasonable expenses to administer benefits provided by the
27 Fund as approved by the Board of Trustees.
28 Upon receipt of proof, satisfactory to the Board of Trustees in their capacity as trustees under
29 the Group Life Insurance Plan, of the death, in service, of a member who had completed at least
30 one full calendar year of membership in the Retirement System, there shall be paid to such person
31 as the member shall have nominated by electronic submission in a form approved by the Board
32 of Trustees or by written designation duly acknowledged and filed with the Board of Trustees, if
33 such person is living at the time of the member's death, otherwise to the member's legal
34 representatives, a death benefit. Such death benefit shall be equal to the greater of:fifty thousand
35 dollars ($50,000).
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 General Assembly Of North Carolina Session 2023
1 (1) The compensation on which contributions were made by the member during
2 the calendar year preceding the year in which his death occurs, or
3 (2) The greatest compensation on which contributions were made by the member
4 during a 12-month period of service within the 24-month period of service
5 ending on the last day of the month preceding the month in which his last day
6 of actual service occurs;
7 (3), (4) Repealed by Session Laws 1983 (Regular Session, 1984), c. 1049, s. 2.
8 subject to a minimum of twenty-five thousand dollars ($25,000) and to a maximum of fifty
9 thousand dollars ($50,000). Such death benefit shall be payable apart and separate from the
10 payment of the member's accumulated contributions under the System on his the member's death
11 pursuant to the provisions of subsection (f) of this section. For the purpose of the Plan, a member
12 shall be deemed to be in service at on the date of his death if his the member's death occurs within
13 180 days from the last day of his the member's actual service.
14 …."
15 SECTION 1.2. G.S. 128-27(l) reads as rewritten:
16 "(l) Death Benefit Plan. – The provisions of this subsection shall become effective for any
17 employer only after an agreement to that effect has been executed by the employer and the
18 Director of the Retirement System. There is hereby created a Group Life Insurance Plan
19 (hereinafter called the "Plan") which is established as an employee welfare benefit plan that is
20 separate and apart from the Retirement System and under which the members of the Retirement
21 System shall participate and be eligible for group life insurance benefits. The Plan shall be part
22 of the North Carolina Teachers' and State Employees' Benefit Trust, as established under
23 G.S. 135-7(g). All receipts, transfers, appropriations, contributions, investment earnings, and
24 other income belonging to the Plan shall be deposited in the Benefit Trust. All benefits and
25 expenses against the Plan shall be disbursed from the Benefit Trust. Employer and non-employer
26 contributions to the Benefit Trust and earnings on those contributions are irrevocable. The assets
27 of the Benefit Trust are dedicated to providing benefits to members and beneficiaries in
28 accordance with the Plan's benefit terms. The assets of the Benefit Trust are not subject to the
29 claims of creditors of the employees and non-employees making contributions to the Benefit
30 Trust, are not subject to the claims of any creditors of the Benefit Trust's trustees and
31 administrators, and are not subject to the claims of creditors of members and beneficiaries.
32 Benefit Trust assets may be used for reasonable expenses to administer benefits provided by the
33 Fund as approved by the Board of Trustees.
34 Upon receipt of proof, satisfactory to the Board of Trustees in their capacity as trustees under
35 the Group Life Insurance Plan, of the death, in service, of a member who had completed at least
36 one full calendar year of membership in the Retirement System, there shall be paid to such person
37 as the member shall have nominated by electronic submission in a form approved by the Board
38 of Trustees or by written designation duly acknowledged and filed with the Board of Trustees, if
39 such person is living at the time of the member's death, otherwise to the member's legal
40 representatives, a death benefit. Such death benefit shall be equal to the greater of:fifty thousand
41 dollars ($50,000).
42 (1) The compensation on which contributions were made by the member during
43 the calendar year preceding the year in which his death occurs, or
44 (2) The greatest compensation on which contributions were made by the member
45 during a 12-month period of service within the 24-month period of service
46 ending on the last day of the month preceding the month in which his last day
47 of actual service occurs;
48 (3) Repealed by Session Laws 1983 (Regular Session, 1984), c. 1049, s. 2;
49 subject to a minimum of twenty-five thousand dollars ($25,000) and a maximum of fifty thousand
50 dollars ($50,000). Such death benefit shall be payable apart and separate from the payment of the
51 member's accumulated contributions under the System on his the member's death pursuant to the
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1 provisions of subsection (f) of this section. For the purpose of the Plan, a member shall be deemed
2 to be in service at the date of his death if his the member's death occurs within 180 days from the
3 last day of his the member's actual service.
4 …."
5 SECTION 1.3. G.S. 120-4.27 reads as rewritten:
6 "§ 120-4.27. Death benefit.
7 The designated beneficiary of a member who dies while in service after completing one year
8 of creditable service shall receive a lump-sum payment of an amount equal to the deceased
9 member's highest annual salary, to a maximum of fifteen thousand dollars ($15,000). fifty
10 thousand dollars ($50,000). For purposes of this death benefit "in service" means currently
11 serving as a member of the North Carolina General Assembly. "In service" also means service in
12 the Uniformed Services, as that term is defined in section 4303(16) of the Uniformed Services
13 Employment and Reemployment Rights Act, Public Law 103-353, if that service begins during
14 the member's term of office. If the participant does not return immediately after that service to
15 employment with a covered employer in this System, then the participant shall be deemed "in
16 service" until the date on which the participant was first eligible to be separated or released from
17 his or her involuntary military service.
18 …."
19
20 PART II. CHANGES TO ESTABLISH A SURVIVOR'S ALTERNATE BENEFIT
21 UNDER THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM (CJRS) AND TO
22 MAKE DEATH BENEFITS FOR CJRS MEMBERS ON PAR WITH THOSE
23 AVAILABLE TO MEMBERS OF THE TEACHERS' AND STATE EMPLOYEES'
24 RETIREMENT SYSTEM, THE LOCAL GOVERNMENTAL EMPLOYEES'
25 RETIREMENT SYSTEM, AND THE LEGISLATIVE RETIREMENT SYSTEM
26 SECTION 2.1. G.S. 135-63 reads as rewritten:
27 "§ 135-63. Benefits on death before retirement.
28 (a) Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a member
29 in service, service, who earned the first month of membership service credit prior to July 1, 2024,
30 and had not withdrawn contributions for such membership service in the Retirement System,
31 there shall be paid in a lump sum to such person as the member shall have nominated by
32 electronic submission in a form approved by the Board of Trustees or by written designation duly
33 acknowledged and filed with the Board of Trustees, if such person is living at the time of the
34 member's death, otherwise to the member's legal representatives, a death benefit equal to the sum
35 of (i) the member's accumulated contributions, plus (ii) the member's final compensation;
36 provided, however, that if the member has attained his or her fiftieth birthday with at least five
37 years of membership service at the member's date of death, and if the designated recipient of the
38 death benefits is the member's spouse who survives him or her, and if the spouse so elects, then
39 the lump-sum death benefit provided for herein shall consist only of a payment equal to the
40 member's final compensation and there shall be paid to the surviving spouse an annual retirement
41 allowance, payable monthly, which shall commence on the first day of the calendar month
42 coinciding with or next following the death of the member and shall be continued on the first day
43 of each month thereafter until the remarriage or death of the spouse. The amount of any such
44 retirement allowance shall be equal to one half of the amount of the retirement allowance to
45 which the member would have been entitled had the member retired under the provisions of
46 G.S. 135-57(a) subsection (a) of G.S. 135-57 on the first day of the calendar month coinciding
47 with or next following the member's date of death, reduced by two percent (2%) thereof for each
48 full year, if any, by which the age of the member at his or her date of death exceeds that of the
49 member's spouse. If the retirement allowance to the spouse shall terminate on the remarriage or
50 death of the spouse before the total of the retirement allowance payments made equals the amount
51 of the member's accumulated contributions at date of death, the excess of such accumulated
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1 contributions over the total of the retirement allowances paid to the spouse shall be paid in a lump
2 sum to such person as the member shall have nominated by electronic submission in a form
3 approved by the Board of Trustees or by written designation duly acknowledged and filed with
4 the Board of Trustees, if such person is living at the time such payment falls due, otherwise to
5 the former member's legal representatives.
6 (a1) Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a member
7 or former member who earned the first month of membership service credit on or after July 1,
8 2024, or forfeited all creditable service in the Retirement System earned prior to July 1, 2024, by
9 receiving a return of contributions, there shall be paid to such person or persons as the member
10 or former member shall have nominated by electronic submission in a form approved by the
11 Board of Trustees or by written designation duly acknowledged and filed with the Board of
12 Trustees, if such person or persons are living at the time of the member's or former member's
13 death, otherwise to the member's or former member's legal representatives, the amount of the
14 member's or former member's accumulated contributions at the time of the member's or former
15 member's death, unless the beneficiary elects to receive an alternate benefit provided under
16 subsection (a2) of this section.
17 (a2) Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a member
18 in service who earned the first month of membership service credit on or after July 1, 2024, or
19 forfeited all creditable service in the Retirement System earned prior to July 1, 2024, by receiving
20 a return of contributions, the beneficiary entitled to receive a return of the member's accumulated
21 contributions pursuant to subsection (a1) of this section may instead elect to receive the reduced
22 retirement allowance under the provisions of Option 2 prescribed by subsection (g) of G.S. 135-5.
23 The election of Option 2 shall provide for a retirement allowance computed by assuming that the
24 member retired on the first day of the month following the date of the member's death, provided
25 that all four of the following conditions apply:
26 (1) The member had either:
27 a. Attained such age or creditable service, or both, to be eligible to
28 commence retirement with an early or service retirement allowance;
29 or
30 b. Attained 16 years of creditable service, in which case the retirement
31 allowance shall be computed in accordance with subsection (b) of
32 G.S. 135-58, notwithstanding the requirement of obtaining age 50.
33 (2) At the time of the member's death, only one beneficiary was eligible to receive
34 a return of accumulated contributions under subsection (a1) of this section.
35 (3) The member had not instructed the Board of Trustees, in writing, that the
36 member did not wish for the provisions of this subsection to apply.
37 (4) The member had not begun receiving a retirement allowance as provided
38 under this Article.
39 (a3) All of the following apply to the alternate survivor benefit described in subsection
40 (a2) of this section:
41 (1) A member is considered to be in service on the date of death if the death occurs
42 within 180 days from the last date of actual service.
43 (2) The last date of actual service means:
44 a. When employment has been terminated, the last date the member
45 actually worked.
46 b. When employment has not been terminated, the date on which an
47 absent member's sick and annual leave expire, unless the member is
48 on an approved leave of absence. An approved leave of absence means
49 any period when a member is on leave of absence and is receiving less
50 than the member's full compensation. The member will be deemed to
51 be in service only if the member is contributing to the Retirement
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1 System. If the member is so contributing, the annual rate of
2 compensation paid to the member immediately prior to the
3 commencement of the leave of absence will be deemed to be the actual
4 compensation rate of the employee during the leave of absence.
5 c. When a member's employment is interrupted by reason of service in
6 the Uniformed Services, as that term is defined in section 4303(16) of
7 the Uniformed Services Employment and Reemployment Rights Act,
8 Public Law 103-353, and the member does not return immediately