H.B. 201
GENERAL ASSEMBLY OF NORTH CAROLINA
Feb 23, 2023
SESSION 2023 HOUSE PRINCIPAL CLERK
H D
HOUSE BILL DRH10104-NJ-43
Short Title: DST Admin Changes.-AB (Public)
Sponsors: Representative Carson Smith.
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT MAKING ADMINISTRATIVE AND CONFORMING CHANGES TO THE LAWS
3 GOVERNING THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM,
4 THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM,
5 LEGISLATIVE RETIREMENT SYSTEM, CONSOLIDATED JUDICIAL RETIREMENT
6 SYSTEM, AND TO OTHER RELATED STATUTES, AS RECOMMENDED BY THE
7 DEPARTMENT OF STATE TREASURER.
8 The General Assembly of North Carolina enacts:
9
10 PART I. CHANGES RELATED TO THE CONTRIBUTORY DEATH BENEFIT FOR
11 THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, LOCAL
12 GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM, LEGISLATIVE
13 RETIREMENT SYSTEM, AND THE CONSOLIDATED JUDICIAL RETIREMENT
14 SYSTEM
15 SECTION 1.1. G.S. 135-5(l) reads as rewritten:
16 "(l) Death Benefit Plan. – There is hereby created a Group Life Insurance Plan (hereinafter
17 called the "Plan") which is established as an employee welfare benefit plan that is separate and
18 apart from the Retirement System and under which the members of the Retirement System shall
19 participate and be eligible for group life insurance benefits. The Plan shall be part of the North
20 Carolina Teachers' and State Employees' Benefit Trust, as established under G.S. 135-7(g). All
21 receipts, transfers, appropriations, contributions, investment earnings, and other income
22 belonging to the Plan shall be deposited in the Benefit Trust. All benefits and expenses against
23 the Plan shall be disbursed from the Benefit Trust. Employer and non-employer contributions to
24 the Benefit Trust and earnings on those contributions are irrevocable. The assets of the Benefit
25 Trust are dedicated to providing benefits to participants, surviving spouses, and the members'
26 estates in accordance with the Plan's benefit terms. The assets of the Benefit Trust are not subject
27 to the claims of creditors of the employees and non-employees making contributions to the
28 Benefit Trust, are not subject to the claims of any creditors of the Benefit Trust's trustees and
29 administrators, and are not subject to the claims of creditors of members and beneficiaries.
30 Benefit Trust assets may be used for reasonable expenses to administer benefits provided by the
31 Fund as approved by the Board of Trustees.
32 …
33 Upon receipt of proof, satisfactory to the Board of Trustees in its capacity under this
34 subsection, of the death of a retired member of the Retirement System on or after January 1,
35 2015, there shall be paid a death benefit to the person or persons designated by the member or,
36 if the member has not designated a beneficiary, to the surviving spouse of the deceased retired
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 General Assembly Of North Carolina Session 2023
1 member or, if not survived by a designated beneficiary or spouse, beneficiary, to the deceased
2 retired member's legal representative; provided the retired member has elected, when first
3 eligible, to make, and has continuously made, in advance of the member's death required
4 contributions as determined by the Board of Trustees on a fully contributory basis, through
5 retirement allowance deductions or other methods adopted by the Board of Trustees, to a group
6 death benefit trust fund, the North Carolina Teachers' and State Employees' Benefit Trust,
7 administered by the Board of Trustees Fund and Pension Accumulation Fund. Employer and
8 non-employer contributions to the Benefit Trust and earnings on those contributions are
9 irrevocable. The assets of the Benefit Trust are dedicated to providing benefits to participants,
10 surviving spouses, and the members' estates in accordance with the Plan's benefit terms. The
11 assets of the Benefit Trust are not subject to the claims of creditors of the employees and
12 non-employees making contributions to the Benefit Trust, are not subject to the claims of any
13 creditors of the Benefit Trust's trustees and administrators, and are not subject to the claims of
14 creditors of members and beneficiaries. Benefit Trust assets may be used for reasonable expenses
15 to administer benefits provided by the Fund as approved by the Board of Trustees. This death
16 benefit shall be a lump-sum payment in the amount of ten thousand dollars ($10,000) upon the
17 completion of 24 months of contributions required under this subsection. Should death occur
18 before the completion of 24 months of contributions required under this subsection, the deceased
19 retired member's designated beneficiary or beneficiaries, or surviving spouse if there is no
20 surviving beneficiary, or legal representative if not survived by a designated beneficiary or
21 spouse, shall be paid the sum of the retired member's contributions required by this subsection
22 plus interest to be determined by the Board of Trustees.
23 …."
24 SECTION 1.2. G.S. 128-27(l6) reads as rewritten:
25 "(l6) Upon receipt of proof, satisfactory to the Board of Trustees in its capacity under this
26 subsection, of the death of a retired member of the Retirement System on or after January 1,
27 2015, there shall be paid a death benefit to the person or persons designated by the member or,
28 if the member has not designated a beneficiary, to the surviving spouse of the deceased retired
29 member or, if not survived by a designated beneficiary or spouse, beneficiary, to the deceased
30 retired member's legal representative; provided the retired member has elected, when first
31 eligible, to make, and has continuously made, in advance of the member's death required
32 contributions as determined by the Board of Trustees on a fully contributory basis, through
33 retirement allowance deductions or other methods adopted by the Board of Trustees, to a group
34 death benefit trust fund, the North Carolina Teachers' and State Employees' Benefit Trust,
35 administered by the Board of Trustees separate and apart from the Retirement System's Annuity
36 Savings Fund and Pension Accumulation Fund. Employer and non-employer contributions to the
37 Benefit Trust and earnings on those contributions are irrevocable. The assets of the Benefit Trust
38 are dedicated to providing benefits to members and beneficiaries in accordance with the Plan's
39 benefit terms. The assets of the Benefit Trust are not subject to the claims of creditors of the
40 employees and non-employees making contributions to the Benefit Trust, are not subject to the
41 claims of any creditors of the Benefit Trust's trustees and administrators, and are not subject to
42 the claims of creditors of members and beneficiaries. Benefit Trust assets may be used for
43 reasonable expenses to administer benefits provided by the Fund as approved by the Board of
44 Trustees.
45 The death benefit payable under this subsection shall be a lump-sum payment in the amount
46 of ten thousand dollars ($10,000) upon the completion of 24 months of contributions required
47 under this subsection. Should death occur before the completion of 24 months of contributions
48 required under this subsection, the deceased retired member's designated beneficiary or
49 beneficiaries, or surviving spouse if not survived by a designated beneficiary, or legal
50 representative if not survived by a designated beneficiary or spouse, beneficiary, shall be paid
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 General Assembly Of North Carolina Session 2023
1 the sum of the retired member's contributions required by this subsection plus interest to be
2 determined by the Board of Trustees."
3 SECTION 1.3. G.S. 120-4.27 reads as rewritten:
4 "§ 120-4.27. Death benefit.
5 …
6 Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member
7 of the Retirement System or Retirement Fund on or after January 1, 2015, there shall be paid a
8 death benefit to the person or persons designated by the member or, if the member has not
9 designated a beneficiary, to the surviving spouse of the deceased retired member or, if not
10 survived by a designated beneficiary or spouse, beneficiary, to the deceased retired member's
11 legal representative; provided the retired member has elected, when first eligible, to make, and
12 has continuously made, in advance of the member's death required contributions as determined
13 by the Retirement System on a fully contributory basis, through retirement allowance deductions
14 or other methods adopted by the Retirement System, to a group death benefit trust fund, the North
15 Carolina Teachers' and State Employees' Benefit Trust, administered by the Board of Trustees
16 separate and apart from the Retirement System's Annuity Savings Fund and Pension
17 Accumulation Fund. Employer and non-employer contributions to the Benefit Trust and earnings
18 on those contributions are irrevocable. The assets of the Benefit Trust are dedicated to providing
19 benefits to members and beneficiaries in accordance with the Plan's benefit terms. The assets of
20 the Benefit Trust are not subject to the claims of creditors of the employees and non-employees
21 making contributions to the Benefit Trust, are not subject to the claims of any creditors of the
22 Benefit Trust's trustees and administrators, and are not subject to the claims of creditors of
23 members and beneficiaries. Benefit Trust assets may be used for reasonable expenses to
24 administer benefits provided by the Fund as approved by the Board of Trustees.
25 The death benefit payable under this subsection shall be a lump-sum payment in the amount
26 of ten thousand dollars ($10,000) upon the completion of 24 months of contributions required
27 under this subsection. Should death occur before the completion of 24 months of contributions
28 required under this subsection, the deceased retired member's designated beneficiary or
29 beneficiaries, or surviving spouse if not survived by a designated beneficiary, or legal
30 representative if not survived by a designated beneficiary or spouse, beneficiary, shall be paid
31 the sum of the retired member's contributions required by this subsection plus interest to be
32 determined by the Board of Trustees."
33 SECTION 1.4. G.S. 135-64(k) reads as rewritten:
34 "(k) Upon the death of a retired member on or after January 1, 2015, there shall be paid a
35 death benefit to the person or persons designated by the member or, if the member has not
36 designated a beneficiary, to the surviving spouse of the deceased retired member or, if not
37 survived by a designated beneficiary or spouse, to the deceased retired member's legal
38 representative; provided the retired member has elected, when first eligible, to make, and has
39 continuously made, in advance of the member's death required contributions as determined by
40 the Board of Trustees on a fully contributory basis, through retirement allowance deductions or
41 other methods adopted by the Board of Trustees, to a group death benefit trust fund, the North
42 Carolina Teachers' and State Employees' Benefit Trust, administered by the Board of Trustees
43 separate and apart from the Retirement System's Annuity Savings Fund and Pension
44 Accumulation Fund. Employer and non-employer contributions to the Benefit Trust and earnings
45 on those contributions are irrevocable. The assets of the Benefit Trust are dedicated to providing
46 benefits to members and beneficiaries in accordance with the Plan's benefit terms. The assets of
47 the Benefit Trust are not subject to the claims of creditors of the employees and non-employees
48 making contributions to the Benefit Trust, are not subject to the claims of any creditors of the
49 Benefit Trust's trustees and administrators, and are not subject to the claims of creditors of
50 members and beneficiaries. Benefit Trust assets may be used for reasonable expenses to
51 administer benefits provided by the Fund as approved by the Board of Trustees.
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 General Assembly Of North Carolina Session 2023
1 The death benefit payable under this subsection shall be a lump-sum payment in the amount
2 of ten thousand dollars ($10,000) upon the completion of 24 months of contributions required
3 under this subsection. Should death occur before the completion of 24 months of contributions
4 required under this subsection, the deceased retired member's designated beneficiary or
5 beneficiaries, or surviving spouse if there is no surviving designated beneficiary, or legal
6 representative if not survived by a designated beneficiary or spouse, beneficiary, shall be paid
7 the sum of the retired member's contributions required by this subsection plus interest to be
8 determined by the Board of Trustees."
9
10 PART II. CHANGES RELATED TO THE SECOND SIX MONTHS OF SHORT-TERM
11 DISABILITY BENEFITS OF THE DISABILITY INCOME PLAN OF NORTH
12 CAROLINA TO BE REIMBURSED TO THE EMPLOYER BY THE PLAN
13 SECTION 2.1. G.S. 135-105(d) reads as rewritten:
14 "(d) For short-term disability benefits that begin before July 1, 2019, the provisions of this
15 section shall be administered by the employer and further, the benefits during the first six months
16 of the short-term disability period shall be the full responsibility of and paid by the employer;
17 Provided, further, that upon the completion of the initial six months of the short-term disability
18 period, the employer will continue to be responsible for the short-term benefits to the participant,
19 however, such employer shall notify the Plan, at the conclusion of the short-term disability period
20 or upon termination of short-term disability benefits, if earlier, of the amount of short-term
21 benefits and State Health Insurance premiums paid by the employer and the Plan shall reimburse
22 the employer the amounts so paid. The Plan shall not reimburse any employer for amounts related
23 to notifications made on or after January 1, 2024."
24
25 PART III. CHANGES RELATED TO THE REVIEW AND APPROVAL OF
26 SHORT-TERM DISABILITY BENEFITS OF THE DISABILITY INCOME PLAN OF
27 NORTH CAROLINA BY THE RETIREMENT SYSTEMS DIVISION
28 SECTION 3.1. G.S. 135-5(a)(5) reads as rewritten:
29 "(5) Any member who is eligible for and is being paid a benefit under the Disability
30 Income Plan as provided in G.S. 135-105 or G.S. 135-106 shall be deemed a
31 member in service and may not retire under the provisions of this section. Any
32 member who has made electronic submission or written application for
33 long-term or extended short-term benefits under the Disability Income Plan as
34 provided in G.S. 135-105 or G.S. 135-106, and who has been rejected by the
35 Plan's Medical Board for a long-term benefit or the Retirement Systems
36 Division of the Department of State Treasurer for an extended short-term
37 benefit shall have 90 days from the date of notification of the rejection to
38 convert his application to an early or service retirement application, provided
39 that the member meets the eligibility requirements, effective the first day of
40 the month following the month in which short-term disability benefits ended
41 or the first day of the month following the month in which any salary
42 continuation as may be provided in G.S. 135-104 ended, whichever is later."
43 SECTION 3.2. G.S. 135-6(k) reads as rewritten:
44 "(k) Medical Board. – The Board of Trustees shall designate a medical board to be
45 composed of not less than three nor more than five physicians not eligible to participate in the
46 Retirement System. The Board of Trustees may structure appointment requirements and term
47 durations for those medical board members. If required, other physicians may be employed to
48 report on special cases. The medical board shall arrange for and pass upon all medical
49 examinations required under the provisions of this Chapter, and shall investigate all essential
50 statements and certificates by or on behalf of a member in connection with an application for
51 disability retirement, and shall report in writing to the Board of Trustees its conclusion and
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 General Assembly Of North Carolina Session 2023
1 recommendations upon all the matters referred to it. it, except as otherwise provided in this
2 Chapter. A person serving on the medical board shall be immune individually from civil liability
3 for monetary damages, except to the extent covered by insurance, for any act or failure to act
4 arising out of that service, except where any of the following apply:
5 (1) The person was not acting within the scope of that person's official duties.
6 (2) The person was not acting in good faith.
7 (3) The person committed gross negligence or willful or wanton misconduct