Retirement Death Benefits Rewrite.-AB

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 359

Short Title: Retirement Death Benefits Rewrite.-AB (Public)
Sponsors: Senators Alexander, Ford, and Hanig (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 24, 2025
*S359-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO RECODIFY AND STANDARDIZE THE LAWS RELATING TO THE DEATH 2
BENEFIT PLAN, INCLUD ING BY MAKING TECHNI CAL, CLARIFYING, AND 3
CONFORMING CHANGES, UNDER THE TEACHERS' AND STATE EMPLOYEES' 4
RETIREMENT SYSTEM, T HE LOCAL GOVERNMENTA L EMPLOYEES' 5
RETIREMENT SYSTEM, THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, 6
AND THE LEGISLATIVE RETIREMENT SYSTEM, T O MAKE CHANGES TO TH E 7
SURVIVOR'S ALTERNATE BENEFIT UNDER THOSE RETIREMENT SYSTEMS, 8
AND TO ENSURE SUFFICIENT FUNDING FOR LINE OF DUTY DEATH BENEFITS. 9
The General Assembly of North Carolina enacts: 10
11
PART I. TECHNICAL RE CODIFICATION AND STA NDARDIZATION OF THE 12
DEATH BENEFIT PLAN F OR MEMBERS OF THE TE ACHERS' AND STATE 13
EMPLOYEES' RETIREMENT SYSTEM 14
SECTION 1.(a) Chapter 135 of the General Statutes is amended to add a new Article 15
8 to be entitled "Death Benefit Plan for State Employees and Retirees" that consists of the 16
following new sections: 17
(1) G.S. 135-153. 18
(2) G.S. 135-154. 19
(3) G.S. 135-155. 20
(4) G.S. 135-160. 21
(5) G.S. 135-165. 22
(6) G.S. 135-170. 23
(7) G.S. 135-175. 24
(8) G.S. 135-180. 25
(9) G.S. 135-185. 26
(10) G.S. 135-190. 27
(11) G.S. 135-195. 28
(12) G.S. 135-200. 29
SECTION 1.(b) The first and second sentence of G.S. 135-7(g)(2) are recodified as 30
the first and third sentence of subsection (a) of G.S. 135-154. 31
SECTION 1.(c) The first sentence of the lead-in language in subsection 135-7(g) is 32
recodified as the second sentence of subsection (a) of G.S. 135-154. 33
SECTION 1.(d) The third sentence of G.S. 135-7(g)(2) is recodified as subsection 34
(b) of G.S. 135-154. 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 359-First Edition
SECTION 1.(e) The fourth, fifth, and sixth sentences of G.S. 135-7(g)(2) are 1
recodified as the first three sentences of subsection (c) of G.S. 135-154. 2
SECTION 1.(f) The third sentence of G.S. 135-7(g)(3) is recodi fied as the fourth 3
sentence of subsection (c) of G.S. 135-154. 4
SECTION 1.(g) The first sentence of G.S.135-7(g)(3) is recodified as subsection (d) 5
of G.S. 135-154. 6
SECTION 1.(h) The caption and the first sentence of the first paragraph of 7
G.S. 135-5(l) are recodified as subsection (a) of G.S. 135-155. 8
SECTION 1.(i) The second, third, and fourth sentences of the first paragraph of 9
G.S. 135-5(l) are recodified as subsection (b) of G.S. 135-155. 10
SECTION 1.(j) The seventh paragraph of G.S. 135-5(l) is recodified as subsection 11
(a) of G.S. 135-160. 12
SECTION 1.(j1) G.S. 135-6(e1) is recodified as subsection (b) of G.S. 135-160. 13
SECTION 1.(k) The first sentence of the second paragraph of G.S. 135-5(l) is 14
recodified as subsection (b) of G.S. 135-165. 15
SECTION 1.(l) The second sentence of the second paragraph of G.S. 135-5(l) is 16
recodified as subsection (c) of G.S. 135-165. 17
SECTION 1.(m) The fourth sentence of the second paragraph of G.S. 135-5(l) is 18
recodified as subsection (d) of G.S. 135-165. 19
SECTION 1.(n ) Sub-subdivision a. of subdivision (2) of the sixth paragraph of 20
G.S. 135-5(l) is recodified as subdivision (3) of G.S. 135-170. 21
SECTION 1.(o) Sub-subdivision b. of subdivision (2) of the sixth paragraph of 22
G.S. 135-5(l) is recodified as subdivision (1) of G.S. 135-170. 23
SECTION 1.(p) Sub-subdivision c. of subdivision (2) of the sixth paragraph of 24
G.S. 135-5(l) is recodified as sub-subdivision a. of subdivision (2) of G.S. 135-170. 25
SECTION 1.(q) Subdivision (3) of the sixth paragraph of G.S. 135-5(l) is recodified 26
as sub-subdivision b. of subdivision (2) of G.S. 135-170. 27
SECTION 1.(r) Subdivision (4) of the sixth paragraph of G.S. 135-5(l) is recodified 28
as sub-subdivision c. of subdivision (2) of G.S. 135-170. 29
SECTION 1.(s) The first sentence of the t hirteenth paragraph of G.S. 135-5(l) is 30
recodified as subsection (b) of G.S. 135-175. 31
SECTION 1.(t) The sixth and seventh sentences of the thirteenth paragraph of 32
G.S. 135-5(l) are recodified as subsection (c) of G.S. 135-175. 33
SECTION 1.(u) The first sen tence of the eighth paragraph of G.S. 135-5(l) is 34
recodified as subsection (a) of G.S. 135-180. 35
SECTION 1.(v) The second sentence of the eighth paragraph of G.S. 135-5(l) is 36
recodified as subsection (c) of G.S. 135-180. 37
SECTION 1.(w) The third sentence of the eighth paragraph of G.S. 135-5(l) is 38
recodified as subsection (d) of G.S. 135-180. 39
SECTION 1.(x) The caption and first and second sentences of G.S. 135-5(l1) are 40
recodified as subsection (a) of G.S. 135-190. 41
SECTION 1.(y) The third sentence of G.S. 135-5(l1) is recodified as subsection (b) 42
of G.S. 135-190. 43
SECTION 1.(z) The third sentence of the second paragraph of G.S. 135-5(l) is 44
recodified as G.S. 135-195. 45
SECTION 1.(aa) The fourth sentence of G.S. 135-5(l1) is recodified as 46
G.S. 135-200. 47
SECTION 2.(a) The remainder of G.S. 135-7(g) not recodified by Section 1 of this 48
act is repealed. 49
SECTION 2.(b) The remainder of G.S. 135-5(l) not recodified by Section 1 of this 50
act is repealed. 51
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Senate Bill 359-First Edition Page 3
SECTION 3. Article 8 of Chapter 135 of the General Statutes, as created by Section 1
1 of this act, reads as rewritten: 2
"Article 8. 3
"Death Benefit Plan for State Employees. 4
"§ 135-153. Definitions. 5
The following definitions apply in this Article: 6
(1) Benefit Trust. – The North Carolina Teachers ' and State Employees' Benefit 7
Trust under G.S. 135-154. 8
(2) Death Benefit Plan. – The Death Benefit Plan for State Employees and 9
Retirees under this Article. 10
(3) Disability Income Plan. – The Disability Income Plan of North Carolina under 11
Article 6 of this Chapter. 12
(4) Reserved for future codification purposes. 13
(5) Reserved for future codification purposes. 14
(6) Participating plans. – All of the following: 15
a. The Death Benefit Plan. 16
b. The Local Governmental Death Benefit Plan under Part 2 of Article 3 17
of Chapter 128 of the General Statutes. 18
c. Contributory d eath benefits available to retired members of the 19
Consolidated Judicial Retirement System under G.S. 135-64. 20
d. Contributory d eath benefits available to retired members of the 21
Legislative Retirement System under G.S. 120-4.27. 22
e. The Separate Insurance Benefits Plan under G.S. 143-166.60. 23
(7) Reserved for future codification purposes. 24
(8) Reserved for future codification purposes. 25
(9) Workers' compensation benefits. – Excluding any payments for a permanent 26
partial disability rating, disability income benefits provided under Chapter 97 27
of the General Statutes. 28
"§ 135-154. North Carolina Teachers' and State Employees' Benefit Trust. 29
(a) Benefit Trust. – A trust fund, the North Carolina Teachers' and State Employees' 30
Benefit Trust, is hereby created as a master trust to which all receipts, transfers, appropriations, 31
contributions, investment earnings, and other income belonging to the Plans participating plans 32
shall be deposited, and from which all benefits and expenses against the Plans those participating 33
plans shall be disbursed. It is the intent of the General Assembly that a this master trust fund be 34
created that provides provide an irrevocable source of funding to be used, to the extent the fund's 35
assets are sufficient, only for death benefits and disability benefits payable to the Plans' members, 36
participants, and beneficiaries, pursuant to G.S. 120 4.27, G.S. 128 27(l), subsections (l2) through 37
(l6) of G.S. 128 27, 135 5(l), 135 64(k), and 143 166.60. beneficiaries of the participating plans 38
and reasonable expenses for the administration of the participating plans. The Boards of Trustees 39
of the Teachers' and State Employees' Retirement System and the Local Governmental 40
Employees' Retirement System shall be the trustee of the Benefit Trust. 41
(b) No Comingling of Funds. – Within the Benefit Trust, the funds of each of the Plans 42
participating plans shall be accounted for separately and not commingled. 43
(c) Assets. – Assets of one participating plan cannot be used to pay for liabilities of 44
another participating plan within the Benefit Trust. The assets of the trust fund Benefit Trust shall 45
be used only for the exclusive benefit of persons who are or may be entitled to benefits under the 46
Plans. participating plans. In no event, including dissolution, will the shall any assets of the trust 47
fund Benefit Trust be distributed to any entity that is not a state, a political subdivision of a state, 48
or another entity the income of which is excludable from its gross income by application of 49
section 115(1) of the Internal Revenue Code. The assets of the Benefit Trust are not subject to 50
the claims of creditors of the employers and non employers any of the following: 51
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 359-First Edition
(1) An e mployer or nonemployer making contributions to the Trust, are not 1
subject to the claims of any creditors of the Trust, trustees, and administrators, 2
and are not subject to the claims of creditors of members, participants, and 3
beneficiaries.Benefit Trust. 4
(2) A trustee or administrator of the Benefit Trust. 5
(3) A member. 6
(4) Participants or beneficiaries of any participating plan. 7
(d) Contributions. – Employer and non employer nonemployer contributions to the North 8
Carolina Teachers' and State Employees' Benefit Trust and earnings on those contributions are 9
irrevocable. 10
"§ 135-155. Death Benefit Plan established. 11
(a) Death Benefit Plan. Plan for State Employees and Retirees. – There is hereby created 12
a Group Life Insurance Plan (hereinafter called the "Plan") which is established as the Death 13
Benefit Plan for State Employees and Retirees, a group life insurance plan that is an employee 14
welfare benefit plan that is separate and apart from the Retirement System and under which the 15
members of the Retirement System shall participate and be eligible for group life insurance 16
benefits.System. 17
(b) Benefit Trust. – The Death Benefit Plan shall be part of the North Carolina Teachers' 18
and State Employees' Benefit Trust, as established under G.S. 135-7(g). Trust. All receipts, 19
transfers, appropriations, contributions, investment earnings, and other income belonging to the 20
Death Benefit Plan shall be deposited in the Benefit Trust. All benefits and expenses against the 21
Death Benefit Plan shall be disbursed from the Benefit Trust. 22
"§ 135-160. Administration of Death Benefit Plan. 23
(a) Provisions Applicable. – The Death Benefit Plan is administered by the Board of 24
Trustees. The provisions of the Retirement System pertaining to Administration, G.S. 135-6, and 25
management of funds, G.S. 135-7, are hereby made G.S. 135-6 and G.S. 135-7 are applicable to 26
the Death Benefit Plan. 27
(b) Effect of Vote Related to Contributory Death Benefit. – No decision of the Board of 28
Trustees related to the Contributory Death Benefit fully contributory death benefit for retirees 29
provided for under this Chapter, Chapter 120, or Chapter 127A of the General Statutes, any of 30
the following shall take effect unless and until this same decision has been made and voted on 31
by the Board of Trustees of the Local Governmental Employees Retirement System.System: 32
(1) G.S. 120-4.27. 33
(2) G.S. 135-64. 34
(3) G.S. 134-166.60. 35
(c) Rulemaking. – The Board of Trustees may adopt temporary or permanent rules, as 36
necessary, for all aspects of administration of this Article. 37
"§ 135-165. Death benefit for in-service members. 38
(a) Eligibility. – A member who is not retired and who has completed at least one full 39
year of membership in the Retirement System is a participant in, and eligible for death benefits 40
under, the Death Benefit Plan in accordance with this section. 41
(b) Benefits Upon Death While in Service. – If a member eligible for benefits under this 42
section dies while in service, then, upon receipt of proof, proof of the death that is satisfactory to 43
the Board of Trustees in their capacity as trustees under the Group Life Insurance Plan, of the 44
death, in service, of a member who had completed at least one full calendar year of membership 45
in the Retirement System, there Trustees, a lump sum death benefit amount shall be paid to such 46
person as the member shall have nominated by electronic submission in a form approved by the 47
Board of Trustees or by written designation duly acknowledged and filed with the Board of 48
Trustees, if such person is living at the time of the member's death, otherwise to the member's 49
legal representatives, a death benefit.paid. 50
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Senate Bill 359-First Edition Page 5
(c) Such death Death Benefit Amount. – Subject to a minimum of twenty-five thousand 1
dollars ($25,000) and to a maximum of fifty thousand dollars ($50,000 ), the lump sum death 2
benefit shall be amount payable under this section is equal to the greater of:of the following 3
amounts: 4
(1) The compensation on which contributions to the Retirement System were 5
made by the member during the calendar year preceding the year in which his 6
the member's death occurs, oroccurred. 7
(2) The greatest compensation on which contributions to the Retirement System 8
were made by the member during a 12 -month period of service within the 9
24-month period of service ending on the last day of the month preceding the 10
month in which his the member's last day of actual service occurs; 11
subject to a minimum of twenty -five thousand dollars ($25,000) and to a maximum 12
of fifty thousand dollars ($50,000).occurred. 13
(d) Members Deemed to be in Service. – For the purpose of the Plan, this section, a 14
member shall be deemed to be in service at the date of his the member's death if his the death 15
occurs within 180 days from the last day of his actual service.service, as determined in 16
accordance with G.S. 135-170. 17
"§ 135-170. Last day of actual service; death benefit for in-service members. 18
To determine the last day of actual service for the purposes of the death benefit for in-service 19
members, all of the following apply: 20
(1) When the employee has not been terminated, Uninterrupted service. – For a 21
member with uninterrupted service, the last day of actual service is the date 22
on which an absent member's sick and annual leave expire, unless the member 23
is on an approved leave of absence and is deemed to be in service under the 24
provisions of G.S. 135-4(h). If a member is deemed to be in service under 25
G.S. 135-4(h), then the last day of actual service is the last day for which the 26
member made a contribution to the Retirement System. 27
(2) Interrupted service. – All of the following apply to a member whose service 28
has been interrupted: 29
a. When a member's For a member whose service is interrupted by reason 30
of service in the Uniformed Services, as that term is defined in section 31
4303(16) of the Uniformed Services Employment and Reemployment 32
Rights Act, Public Law 103-353, and the participant member does not 33
return immediately after that service to employment with a covered 34
employer in this the Retirement System, the last day of actual service 35
is the date on which the participant member was first eligible to be 36
separated or released from his or her involuntary military service. 37
b. For a period when a member who is on an approved leave of absence, 38
his status with respect to the death benefit will be determined by the 39
provisions of G.S. 135-4(h).but is not deemed to be in service under 40
G.S. 135-4(h), the last day of actual service is either the last day for 41
which the member made a contribution to the Retirement System or 42
the date on which the me mber's sick and annual leave expired, 43
whichever is later. 44
c. A member on leave of absence from his a position as a teacher or State 45
employee for the purpose of serving as a member or officer of the 46
North Carolina General Assembly shall be deemed to be in service 47
during sessions of the General Assembly and thereby covered by the 48
provisions of the death benefit. The eligible for the death benefit under 49
G.S. 135-165. The last day of actual service shall be the most recent 50
legislative day of the applicable General Assembly session or the last 51
General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 359-First Edition
day the member per formed wor k as a teacher or State employee , 1
whichever is later . Notwithstanding G.S. 135-165(c), the amount of 2
the death benefit for such a member who is on a leave of absence due 3
to General Assembly service shall be the equivalent of the salary to 4
which the member would have been entitled as a teacher or State 5
employee during the 12-month period immediately prior to the month 6
in which death occurred, not to be less than subject to a minimum of 7
twenty-five thousand dollars ($25,000) nor to exceed and a maximum 8
of fifty thousand dollars ($50,000). 9
d. All of the following apply for a member who is either (i) receiving 10
workers' compensation benefits during the period for which the 11
member would have been otherwise eligible to receive short -term 12
benefits or extended short -term benefits under G.S. 135-105 or (ii) a 13
beneficiary under the Disability Income Plan: 14
1. If the date the member last performed work as a teacher or 15
State employee occurred within 180 days of the date the 16
member died, then the last day of actual service is the last day 17
the member performed that work. 18
2. If the date the member last performed worked as a teacher or 19
State employee occurred more than 180 days from the date the 20
member died, then that member shall not be deemed in active 21
service for the purposes of G.S. 135-165. 22
(3) When the employee Terminated service. – For a member whose employment 23
has been terminated, terminated for reasons other than retirement, whether by 24
the employer or the employee, the last day of actual service is the last day the 25
member actually worked.performed work as a teacher or State employee. 26
"§ 135-175. Fully contributory death benefit for retired members. 27
(a) Participation and Premiums. – All retired members may elect to participate in the 28
Death Benefit Plan and therefore become eligible to receive death benefits under the Death 29
Benefit Plan in accordance with this section. Elections shall be made prior to death and no later 30
than 60 calendar days from the effective date of the member 's retirement . Elections shall be 31
received by the Board of Trustees prior to the death of the retired member . Retired members 32
electing to receive a fully contributory death benefit under the Death Benefit Plan shall 33
continuously pay monthly premiums on a fully contributory basis, as determined by the Board 34
of Trustees, to the Benefit Trust. Premium payments shall be made through retirement allowance 35
deductions or other methods adopted by the Board of Trustees. 36
(b) Benefits Upon Death. – If a retired member who has elected to receive a fully 37
contributory death benefit under to this section dies, then, upon receipt of proof, proof of the 38
death that is satisfactory to the Board of Trustees in its capacity under this subsection, of the 39
death of a retired member of the Retirement System on or after January 1, 2015, there Trustees, 40
a lump sum death benefit amount shall be paid a death benefit to the person or persons designated 41
by the member or, if not survived by a designated beneficiary, to the deceased retired member's 42
legal representative; provided the retired member has elected, when first eligible, to make, and 43
has continuously made, in advance of the member's death required contributions as determined 44
by the Board of Trustees on a fully contributory basis, through retirement allowance deductions 45
or other methods adopted by the Board of Trustees, to a group death benefit trust fund, the North 46
Carolina Teachers' and State Employees' Benefit Trust, administered by the Board of Trustees 47
Fund and Pension Accumulation Fund.paid. 48
(c) This Death Benefit Amount. – The lump sum death benefit payable under this section 49
shall be a lump-sum payment in the amount of one of the following amounts: 50
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Senate Bill 359-First Edition Page 7
(1) If the death occurred on or after the first day of the twenty -fifth month of 1
coverage under this section, the amount payable is ten thousand dollars 2
($10,000) upon the completion of 24 months of contributions required under 3
this subsection. Should death occur ($10,000). 4
(2) If the death occurred before the completion of 24 months of contributions 5
required under this subsection, the deceased retired member's designated 6
beneficiary or beneficiaries, or legal representative if not survived by a 7
designated beneficiary, shall be paid first day of the twenty-fifth month of 8
coverage under this section, the amount payable is the sum of t he retired 9
member's contributions required by this subsection premium payments made 10
in accordance with this section plus interest in an amount to be determined by 11
the Board of Trustees. 12
"§ 135-180. Death benefits; workers ' compensation benefits and Disability Income Plan 13
beneficiaries. 14
(a) Eligibility. – A member who is a beneficiary of the Disability Income Plan provided 15
for in Article 6 of this Chapter, or a member who is in receipt of Workers' Compensation workers' 16
compensation benefits during the period for which he or she the member would have otherwise 17
been eligible to receive short -term benefits or extended short -term benefits and as provided in 18
G.S. 135-105 benefits under G.S. 135-105 is eligible for death benefits under the Death Benefit 19
Plan in accordance with this section if all of the following criteria are met: 20
(1) The member is not retired. 21
(2) The member is not eligible for death benefits under G.S. 135-165. 22
(3) The member dies on or after 181 days fr om the last day of his or her actual 23
service the member performed work as a teacher or State employee but prior 24
to the date the workers' compensation benefits or benefits as provided in 25
G.S. 135-105 under the Disability Income Plan would have ended, shall be 26
eligible for group life insurance benefits as provided in this subsection, 27
notwithstanding that the member is no longer an employee or teacher or that 28
the member's death occurs after the eligibility period after active 29
service.ended. 30
(b) Benefits Upon Death. – Upon receipt of proof of the death of a member eligible for 31
benefits under subsection (a) of this section that is satisfactory to the Board of Trustees, a lump 32
sum death benefit amount shall be paid. 33
(c) Benefit Amount. – The basis of the death benefit payable hereunder under this section 34
shall be the higher of the death benefit computed as above amount calculated in accordance with 35
G.S. 135-165(c) or a the death benefit amount based on compensation used in computing the 36
benefit payable under G.S. 135-105 and G.S. 135-106, as may be adjusted for percentage 37
post-disability increases, all subject to but shall not exceed the maximum dollar limitation as 38
provided above.for the death benefit for in-service members under G.S. 135-165. 39
(d) Exceptions. – A member in receipt of benefits from the Disability Income Plan under 40
the provisions of G.S. 135-112 whose right to a benefit accrued under the former Disability 41
Salary Continuation Plan shall not be covered under the provisions of this paragraph.entitled to 42
benefits under the Death Benefit Plan under this Article. 43
"§ 135-185. Beneficiaries under the Death Benefit Plan. 44
(a) Designation. – A member shall designate a beneficiary or beneficiaries for each 45
applicable benefit payable under this Article by electronic submission in a form approved by the 46
Board of Trustees or by written designation duly acknowledged and filed with the Board of 47
Trustees. 48
(b) Benefits Payable. – Each applicable benefit payable under this Article shall be paid 49
to the designated beneficiary or beneficiaries to receive the benefit. If no beneficiaries are 50
General Assembly Of North Carolina Session 2025
Page 8 Senate Bill 359-First Edition
designated or living at the time of the member 's death, then the benefit shall be paid to the 1
member's legal representative. 2
"§ 135-190. Reciprocity of Death Benefit Plan. 3
(a) Reciprocity of Death Benefit Plan. – Only for the purpose of determining eligibility 4
for the death benefit benefits provided for in subsection ( l) of this section, under this Ar ticle, 5
membership service standing to the credit of (i) a member of the Legislative Retirement System 6
or the Consolidated Judicial Retirement System or (ii) a retired member of the Legislative 7
Retirement System or the Consolidated Judicial Retirement System whose retirement benefit was 8
suspended upon entrance into membership in the Teachers ' and State Employees ' Retirement 9
System shall be added to the membership service standing to the credit of a member of the 10
Teachers' and State Employees' Retirement Syst em. However, in the event that a participant or 11
beneficiary is a retired member of the Legislative Retirement System or the Consolidated Judicial 12
Retirement System whose retirement benefit was suspended upon entrance into membership in 13
the Teachers' and State Employees' Retirement System, such membership service standing to the 14
credit of the retired member prior to retirement shall be likewise counted. 15
(b) Prohibitions. – Membership service under this section shall not be counted twice for 16
the same period of time. 17
"§ 135-195. Accumulated contributions separate. 18
Such death benefit Death benefit amounts payable under this Article shall be payable apart 19
and separate from the payment of the member's accumulated contributions under the Retirement 20
System on his the member 's death pursuant to the provisions of subsection (f) of this 21
section.G.S. 135-5. 22
"§ 135-200. Benefits disallowed under this Article. 23
In Notwithstanding anything in this Article to the contrary, no event shall a death benefit 24
provided for in G.S. 135-5(l) under this Article shall be paid at the death of a member if a death 25
benefit is paid related to that member under G.S. 135-63." 26
27
PART II. TECHNICAL R ECODIFICATION AND ST ANDARDIZATION OF THE 28
DEATH BENEFIT PLAN F OR MEMBERS OF THE LO CAL GOVERNMENTAL 29
EMPLOYEES' RETIREMENT SYSTEM 30
SECTION 4.(a) Article 3 of Chapter 128 of the General Statutes is amended to add 31
a new Part 1 to be entitled "Local Governmental Employees Retirement System" consisting of 32
G.S. 128-21 through G.S. 128-38.29. 33
SECTION 4.(a1) Article 3 of Chapter 128 of the General Statutes is amended to add 34
a new Part 2 to be entitled "Local Governmental Death Benefit Plan" that consists of the 35
following new sections: 36
(1) G.S. 128-38.30. 37
(2) G.S. 128-38.31. 38
(3) G.S. 128-38.35. 39
(4) G.S. 128-38.36. 40
(5) G.S. 128-38.40. 41
(6) G.S. 128-38.45. 42
(7) G.S. 128-38.46. 43
SECTION 4.(b) The caption and the second sentence of G.S. 128-27(l) are 44
recodified as subsection (a) of G.S. 128-38.30. 45
SECTION 4.(c) The third, fourth, and fifth sentences of the first paragraph of 46
G.S. 128-27(l) are recodified as subsection (b) of G.S. 128-38.30. 47
SECTION 4.(d) The seventh paragraph of G.S. 128-27(l) is recodified as subsection 48
(a) of G.S. 128-38.31. 49
SECTION 4.(d1) G.S. 128-28(f1) is recodified as subsection (b) of G.S. 128-38.31. 50
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SECTION 4.(e) The first sentence of the first paragraph of G.S. 128-27(l) is 1
recodified as the first sentence of subsection (a) of G.S. 128-38.35. 2
SECTION 4.(f) The first sentence of G.S. 128-27(l1) is recodified as the second 3
sentence of subsection (a) of G.S. 128-38.35. 4
SECTION 4.(g) The first sentence of the second paragraph of G.S. 128-27(l) is 5
recodified as subsection (b) of G.S. 128-38.35. 6
SECTION 4.(h) The second sentence of the s econd paragraph of G.S. 128-27(l) is 7
recodified as subsection (c) of G.S. 128-38.35. 8
SECTION 4.(i) The fourth sentence of the second paragraph of G.S. 128-27(l) is 9
recodified as subsection (d) of G.S. 128-38.35. 10
SECTION 4.(j) Sub-subdivision a. of subdiv ision (2) of the sixth paragraph of 11
G.S. 128-27(l) is recodified as subdivision (3) of G.S. 128-38.36. 12
SECTION 4.(k) Sub-subdivision b. of subdivision (2) of the sixth paragraph of 13
G.S. 128-27(l) is recodified as subdivision (1) of G.S. 128-38.36. 14
SECTION 4.(l) Sub-subdivision c. of subdivision (2) of the sixth paragraph of 15
G.S. 128-27(l) is recodified as sub-subdivision a. of subdivision (2) of G.S. 128-38.36. 16
SECTION 4.(m) Subdivision (3) of the sixth paragraph of G.S. 128-27(l) is 17
recodified as sub-subdivision b. of subdivision (2) of G.S. 128-38.36. 18
SECTION 4.(n) Subdivision (4) of the sixth paragraph of G.S. 128-27(l) is 19
recodified as sub-subdivision c. of subdivision (2) of G.S. 128-38.36. 20
SECTION 4.(o) The first sentence of the first paragraph of G.S. 128-27(l6) is 21
recodified as subsection (b) of G.S. 128-38.40. 22
SECTION 4.(p) The second paragraph of G.S. 128-27(l6) is recodified as subsection 23
(c) of G.S. 128-38.40. 24
SECTION 4.(q) The third sentence of the second paragraph of G.S. 128-27(l) is 25
recodified as G.S. 128-38.46. 26
SECTION 5.(a) The remainder of subsections ( l), (l1), and (l6) of G.S. 128-27 not 27
recodified by Section 4 of this act are repealed. 28
SECTION 5.(b) Subsections (l2), (l3), (l4), and (l5) of G.S. 128-27 are repealed. 29
SECTION 6.(a) G.S. 128-21 reads as rewritten: 30
"§ 128-21. Definitions. 31
The following words and phrases as used definitions apply in this Article, unless a different 32
meaning is plainly required by the context, shall have the following meanings:context: 33
… 34
(6a) "Benefit Trust" means t he North Carolina Teac hers' and State Employees ' 35
Benefit Trust under G.S. 135-154. 36
… 37
(8a) "Death Benefit Plan " means t he Local Governmental Death Benefit Plan 38
established under Part 2 of this Article. 39
(8b) "Duly acknowledged" means notarized, including electronic notarization, or 40
verified through an identity authentication service approved by the 41
Department of State Treasurer. 42
…." 43
SECTION 6.(b) Part 2 of Article 3 of Chapter 128 of the General Statutes, as created 44
by Section 4 of this act, reads as rewritten: 45
"Part 2. Local Governmental Death Benefit Plan. 46
"§ 128-38.30. Death Benefit Plan established. 47
(a) Death Benefit Plan. – There is hereby created a Group Life Insurance Plan (hereinafter 48
called the "Plan") which is established as the Local Governmental Death Benefit Plan, a group 49
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
Page 10 Senate Bill 359-First Edition
Retirement System and under which the members of the Retirement System shall participate and 1
be eligible for group life insurance benefits.System. 2
(b) Benefit Trust. – The Death Benefit Plan shall be part of the North Carolina Teachers' 3
and State Employees' Benefit Trust, as established under G.S. 135-7(g). Trust. All receipts, 4
transfers, appropriations, contributions, investment earnings, and other income belonging to the 5
Death Benefit Plan shall be deposited in the Benefit Trust. All benefits and expenses against the 6
Death Benefit Plan shall be disbursed from the Benefit Trust. 7
"§ 128-38.31. Administration of Death Benefit Plan. 8
(a) Provisions Applicable. – The Death Benefit Plan is administered by the Board of 9
Trustees. The provisions of the Retirement System pertaining to administration, G.S. 128-28, and 10
management of funds, G.S. 128-29, are hereby made G.S. 128-28 and G.S. 128-29 are applicable 11
to the Death Benefit Plan. 12
(b) Effect of Vote Related to Contributory Death Benefit. – No decision of the Board of 13
Trustees related to the Contributory Death Benefit fully contributory death benefit for retirees 14
provided for under this Article Part shall take effect unless and until this same decision has been 15
made and voted on by the Board of Trustees of the Teachers' and State Employees' Retirement 16
System. 17
(c) Rulemaking. – The Board of Trustees may adopt temporary or permanent rules, as 18
necessary, for all aspects of administration of this Part. 19
"§ 128-38.35. Death benefit for in-service members. 20
(a) The provisions of this subsection shall become effective for any employer only after 21
Participation. – Benefits under this section are only available to an otherwise eligible in-service 22
member if that member 's employer has opted to participate in the Death Benefit Plan or if the 23
member is a law enforcement officer. All of the following apply: 24
(1) If an employer elects to participate in the Death Benefit Plan with regards to 25
in-service members who are not law enforcement officer s employed by the 26
employer, then an agreement to that effect has been shall be executed by the 27
employer and the Executive Director of the Retirement System. Under all 28
requirements and conditions as otherwise provided for in subsection (l) of this 29
section, except for the requirement that the provisions are effective only after 30
an agreement has been executed by the employer and the Executive Director 31
of the Retirement Systems Division, Participation in, and eligibility for death 32
benefits under, the Death Benefit Plan in accordance with this section shall be 33
begin only after this agreement has been executed. 34
(2) Employers are required to participate in the Death Benefit Plan with regard to 35
all law enforcement officers employed by the employer who are members of 36
the Retirement System shall participate and be eligible for group life insurance 37
benefits under the Group Life Insurance Plan, and employers shall fund the 38
cost of these benefits. 39
(a1) Eligibility. – Subject to employer participation in the Death Benefit Plan for members 40
who are not law enforcement officers, a member who has not retired and who has completed at 41
least one full year of membership in the Retirement System is a participant in, and eligible for 42
the death benefits under, the Death Benefit Plan in accordance with this section. 43
(b) Benefits Upon Death While in Service. – If a member eligible for benefits under this 44
section dies while in service, then, upon receipt of proof, proof of the death that is satisfactory to 45
the Board of Trustees in their capacity as trustees under the Group Life Insurance Plan, of the 46
death, in service, of a member who had completed at least one full calendar year of membership 47
in the Retirement System, there Trustees, a lump sum death benefit amount shall be paid to such 48
person as the member shall have nominated by electronic submission in a form approved by the 49
Board of Trustees or by written designation duly acknowledged and filed with the Board of 50
General Assembly Of North Carolina Session 2025
Senate Bill 359-First Edition Page 11
Trustees, if such person is living at the time of the member's death, otherwise to the member's 1
legal representatives, a death benefit.paid. 2
(c) Such death Death Benefit Amount. – Subject to a minimum of twenty-five thousand 3
dollars ($25,000) and to a maximum of fifty thousand dollars ($50,000), the lump sum death 4
benefit shall be amount payable under this section is equal to the greater of:of the following 5
amounts: 6
(1) The compensation on which contributions to the Retireme nt System were 7
made by the member during the calendar year preceding the year in which his 8
the member's death occurs, oroccurred. 9
(2) The greatest compensation on which contributions to the Retirement System 10
were made by the member during a 12 -month period of service within the 11
24-month period of service ending on the last day of the month preceding the 12
month in which his the member's last day of actual service occurs; 13
subject to a minimum of twenty -five thousand dollars ($25,000) and a 14
maximum of fifty thousand dollars ($50,000).occurred. 15
(d) Members Deemed to be in Service. – For the purpose of the Plan, section, a member 16
shall be dee med to be in service at the date of his the member's death if his the death occurs 17
within 180 days from the last day of his actual service.service, as determined in accordance with 18
G.S. 128-38.36. 19
"§ 128-38.36. Last day of actual service; death benefit for in-service members. 20
To determine the last day of actual service for the purposes of a death benefit for in -service 21
members, all of the following apply: 22
(1) When the employee has not been terminated, Uninterrupted service. – For 23
members with uninterrupted service, the last day of actual service is the date 24
on which an absent member's sick and annual leave expire.expire unless the 25
member is on an approved leave of absence and is deemed to be in service 26
under G.S. 128-26(g). If a member is deemed to be in service under 27
G.S. 128-26(g), then the last day of actual service is the last day for which the 28
member made a contribution to the Retirement System. 29
(2) Interrupted service. – All of the following apply to a member whose service 30
has been interrupted: 31
a. When a member's For a member whose service is interrupted by reason 32
of service in the Uniformed Services, as that term is defined in section 33
4303(16) of the Uniformed Services Employment and Reemployment 34
Rights Act, Public Law 103-353, and the participant member does not 35
return immediately after that service to employment with a covered 36
employer in this the Retirement System, the last day of actual service 37
is the date on which t he participant member was first eligible to be 38
separated or released from his or her involuntary military service. 39
b. For a period when a member who is on an approved leave of absence, 40
his status with respect to the death benefit will be determined by the 41
provisions of G.S. 128-26(g).but who is not deemed to be in service 42
under G.S. 128-26(g), the last day of actual service is either the last 43
day for which the member made a contribution to the Retirement 44
System or the date on which the member 's sick and ann ual leave 45
expired, whichever is later. 46
c. A member on leave of absence from his a position as a local 47
governmental employee for the purpose of serving as a member or 48
officer of the North Carolina General Assembly shall be deemed to be 49
in service during sessions of the General Assembly and thereby 50
covered by the provisions of the death benefit, if applicable. The 51
General Assembly Of North Carolina Session 2025
Page 12 Senate Bill 359-First Edition
eligible for the de ath benefit under G.S. 128-38.35. The last day of 1
actual service shall be the most recent legislative day of the applicable 2
General Assembly session or the last day the member performed work 3
as a local governmental employee, whichever is later. Notwithstanding 4
G.S. 128-38.35(c), the amount of the death benefit for such a member 5
who is on a leave of absence due to General Assembly service shall be 6
the equivalent of the salary to which the member would have been 7
entitled as a local governmental employee during the 12-month period 8
immediately prior to the month in which death occurred, not to be less 9
than subject to a minimum of twenty-five thousand dollars ($25,000) 10
nor to exceed and a maximum of fifty thousand dollars ($50,000). 11
(3) When the employee Terminated service. – For a member whose employment 12
has been terminated, terminated for reasons other than retirement, whether by 13
the employer or the employee, the last day of actual service is the last day the 14
member actually worked.performed work as a local governmental employee. 15
"§ 128-38.40. Fully contributory death benefit for retired members. 16
(a) Participation and Premiums. – All retired members may elect to participate in the 17
Death Benefit Plan and therefore become eligible to receive death benefit s under the Death 18
Benefit Plan in accordance with this section. Elections shall be made prior to death and no later 19
than 60 calendar days from the effective date of the member 's retirement . Elections shall be 20
received by the Board of Trustees prior to the death of the retired member. Retired members 21
electing to receive a fully contributory death benefit under the Death Benefit Plan shall 22
continuously pay monthly premiums on a fully contributory basis, as determined by the Board 23
of Trustees, to the North Carolina Teachers' and State Employees' Benefit Trust established under 24
G.S. 135-7(g). Premium payments shall be made through retirement allowance deductions or 25
other methods adopted by the Board of Trustees. 26
(b) Benefits Upon Death. – If a retired member who has elected to receive a ful ly 27
contributory death benefit under this section dies, then, upon receipt of proof, proof of the death 28
that is satisfactory to the Board of Trustees in its capacity under this subsection, of the death of 29
a retired member of the Retirement System on or after January 1, 2015, there Trustees, a lump 30
sum death benefit amount shall be paid a death benefit to the person or persons designated by the 31
member or, if not survived by a designated beneficiary, to the deceased retired member's legal 32
representative; provided the retired member has elected, when first eligible, to make, and has 33
continuously made, in advance of the member's death required contr ibutions as determined by 34
the Board of Trustees on a fully contributory basis, through retirement allowance deductions or 35
other methods adopted by the Board of Trustees, to a group death benefit trust fund, the North 36
Carolina Teachers' and State Employees' Benefit Trust, administered by the Board of Trustees 37
separate and apart from the Retirement System's Annuity Savings Fund and Pension 38
Accumulation Fund.paid. 39
(c) The Death Benefit Amount. – The lump sum death benefit payable under this 40
subsection section shall be a lump-sum payment in the amount of one of the following amounts: 41
(1) If the death occurred on or after the first day of the twenty -fifth month of 42
coverage under this section, then the amount payable is ten thousand dollars 43
($10,000) upon the completion of 24 months of contributions required under 44
this subsection. Should death occur ($10,000). 45
(2) If the death occurred before the completion of 24 months of contributions 46
required under this subsection, the deceased retired member's designated 47
beneficiary or beneficiaries, or legal representative if not survived by a 48
designated beneficiary, shall be paid first day of the twenty -fifth month of 49
coverage under this section, then the amount payable is the sum of the retired 50
member's contributions required by this subsection premium payments made 51
General Assembly Of North Carolina Session 2025
Senate Bill 359-First Edition Page 13
in accordance with this section plus interest in an amount to be determined by 1
the Board of Trustees. 2
"§ 128-45. Beneficiaries under the Death Benefit Plan. 3
(a) Designation. – A member shall designate a be neficiary or beneficiaries for each 4
applicable benefit payable under this Part by electronic submission in a form approved by the 5
Board of Trustees or by written designation duly acknowledged and filed with the Board of 6
Trustees. 7
(b) Benefits Payable. – Each applicable benefit payable under this Part shall be paid to 8
the designated beneficiary or beneficiaries to receive the benefit. If no beneficiaries are 9
designated or living at the time of the member 's death, then the benefit shall be paid to the 10
member's legal representative. 11
"§ 128-38.46. Accumulated contributions separate. 12
Such death benefit Death benefit amounts payable under this Part shall be payable apart and 13
separate from the payment of the member's accumulated contributions under the Retirement 14
System on his the member 's death pursuant to the provisions of subsection (f) of this 15
section.G.S. 128-27(f)." 16
17
PART III. STANDARDIZ ATION OF DEATH BENEF ITS FOR MEMBERS OF T HE 18
CONSOLIDATED JUDICIAL RETIREMENT SYSTEM 19
SECTION 7.(a) G.S. 135-53 is amended by adding a new subdivision to read: 20
"(3a) "Benefit Trust " means t he North Car olina Teachers ' and State Employees ' 21
Benefit Trust under G.S. 135-154." 22
SECTION 7.(b) G.S. 135-52 is amended by adding a new subsection to read: 23
"(c) Fully contributory d eath benefits under this Article are established as a group life 24
insurance plan that is an employee welfare benefit plan that is separate and apart from the 25
Retirement System and administered by the Board of Trustees. Fully contributory death benefits 26
for retirees under this Article are part of the Benefit Trust. All receipts, transfers, appropriations, 27
contributions, investment earnings, and other income associated with the fully contributory death 28
benefits for retirees under this Article shall be deposited in the Benefit Trust. All benefits and 29
expenses against the fully contributory death benefits for retirees under this Article shall be 30
disbursed from the Benefit Trust." 31
SECTION 7.(c) Subsections (b) and (d) of G.S. 135-63 are repealed. 32
SECTION 7.(d) G.S. 135-63, as amended by subsection (c) of this section, reads as 33
rewritten: 34
"§ 135-63. Benefits on death before retirement. 35
(a) Upon In-Service Benef it. – If a member who has completed at least one year of 36
membership service dies while in service, then, upon receipt of proof, proof of the death that is 37
satisfactory to the Board of Trustees, of the death of a member in service, there shall be paid in 38
a lump sum death benefit shall be paid to such person as the beneficiary or beneficiaries that the 39
member shall have nominated designated by electronic submission in a form approved by the 40
Board of Trustees or by written designation duly acknowledged and filed with the Board of 41
Trustees, if such person is Trustees. If no beneficiaries are designated or living at the time of the 42
member's death, otherwise then the death benefit shall be paid to the member's legal 43
representatives, a representative. The amount of the death benefit payable under this subsection 44
is equal to the sum of (i) the member's accumulated contributions, plus (ii) the member's final 45
compensation; provided, however, that if the member has attained his or her fiftieth birthday with 46
at least five years of membership service at the member's date of death, and if the designated 47
recipient of the death benefits is the compensation, unless a member's surviving spouse who 48
survives him or her, and if the spouse so elects, is eligible for and elects to rec eive a survivor's 49
alternate benefit under subsection (a1) of this section. 50
General Assembly Of North Carolina Session 2025
Page 14 Senate Bill 359-First Edition
(a1) Survivor's Alternate Benefit. – The surviving spouse of a member who was age 50 or 1
older with at least five years of membership service at the time of death may elect a survivor's 2
alternate benefit. If the surviving spouse elects a survivor's alternate benefit, then the lump-sum 3
death benefit provided for herein under subsection (a) of this section shall consist only of a 4
payment equal to the member's final compensation and there shall be paid to the surviving spouse 5
an annual retirement allowance, payable monthly, which monthly. The monthly payments shall 6
commence on the first day of the calendar month coinciding with or next following the death of 7
the member and shall be continued member. All of the following apply to the survivor's alternate 8
benefit: 9
(1) The survivor's alternate benefit shall continue on the first day of each month 10
thereafter until the remarriage or death of the spouse. 11
(2) The amount of any such the survivor's alternate benefit retirement allowance 12
shall be equal to one half of the amount of the retirement allowance to which 13
the member would have been entitled had the member retire d under the 14
provisions of G.S. 135-57(a) on the first day of the calendar month coinciding 15
with or next following the member's date of death, reduced by two percent 16
(2%) thereof for each full year, if any, by which the age of the member at his 17
or her date of death exceeds that of the member's spouse. 18
(3) If the retirement allowance to the spouse shall terminate terminates on the 19
remarriage or death of the spouse before the total of the retirement allowance 20
payments made equals the amount of the member's accumulated contributions 21
at date of death, then the excess of such those accumulated contributions over 22
the total of the retirement allowances paid to the spouse shall be paid in a lump 23
sum to such person as the beneficiary or beneficiaries the member shall have 24
nominated designated by electronic submission in a form approved by the 25
Board of Trustees or by written designation duly acknowledged and filed with 26
the Board of Trustees, if such person is Trustees. If no beneficiary is 27
designated or living at the time such payment falls due, otherwise the lump 28
sum payment becomes due under this subdivision, then the lump sum payment 29
shall be made to the former member's legal representatives. 30
… 31
(c) Not in Service Benefit. – Upon receipt of proof, satisfactory to the Board of Trustees, 32
of the death of a member not in service, there shall be paid in a lump sum to such person as the 33
beneficiary that the member shall have nominated designated by electronic submission in a form 34
approved by the Board of Trustees or by written designation duly acknowledged and filed with 35
the Board of Trustees, if such person is Trustees. If no beneficiary is designated or living at the 36
time of the member's death, otherwise the lump sum death benefit shall be paid to the member's 37
legal representatives, a representatives. The lump sum death benefit payable under this 38
subsection is equal to the member's accumulated contributions. 39
…." 40
SECTION 7.(e) Subsections (f) through (j) of G.S. 135-64 are repealed. 41
SECTION 7.(f) G.S. 135-64, as amended by subsection (e) of this section, reads as 42
rewritten: 43
"§ 135-64. Benefits on death after retirement. 44
(a) In the event of the death of If a former member while in receipt of dies after a service 45
retirement allowance pursuant to his retirement under the provisions of G.S. 135-57, G.S. 135-57 46
or after a the former member's sixty -fifth birthday while in receipt of a retirement allowance 47
pursuant to his retirement under the provisions of after a disability retirement under G.S. 135-59, 48
then there shall be paid to the former member's surviving spouse, if any, an annual retirement 49
allowance, payable monthly, which monthly. The monthly payments shall commence on the first 50
day of the calendar month next following the date of death of the former member and shall be 51
General Assembly Of North Carolina Session 2025
Senate Bill 359-First Edition Page 15
continued on the first day of each month thereafter until the remarriage or death of the spouse. 1
The amount of any such the retirement allowance under this subsection shall be equal to one half 2
of the allowance that was payable to the former member for the month immediately prior to his 3
the member's month of death, or which that would have been so payable had an optional mode 4
of payment not been elected under the provisions of G.S. 135-61, reduced by two percent (2%) 5
thereof for each full year, if any, by which the age of the former member at date of death exceeds 6
that of his the spouse. 7
(b) In the event of the death of If a former member dies prior to his the former member's 8
sixty-fifth birthday while in receipt of a after a disability retirement allowance pursuant to his 9
retirement under the provisions of G.S. 135-59, then there shall be paid to the former member's 10
surviving spouse, if any, an annual retirement allowance, payable monthly, which monthly. The 11
monthly payments shall commence on the first day of the calendar month next following the date 12
of death of the former m ember and shall be continued on the first day of each month thereafter 13
until the remarriage or death of the spouse. The amount of any such the retirement allowance 14
under this subsection shall be equal to one half of the allowance to which the former member 15
would have been entitled under the provisions of G.S. 135-58 if he the member had remained in 16
service from his the disability retirement date to his the date of death with no change in his the 17
former member's final compensation or status and had then retired, reduced by two percent (2%) 18
thereof for each full year, if any, by which the age of the former member at date of death exceeds 19
that of his the spouse. 20
(c) In the event of the death of If a former member dies while in receipt of a retirement 21
allowance under the provisions of G.S. 135-58, 135 -60, or 135 -61, and if such that former 22
member is not survived by a spouse to whom a retirement allowance is payable under the 23
provisions of subsection (a) or subsection (b) above, of this section nor survived by a beneficiary 24
to whom a monthly survivorship benefit is payable under one of the optional modes of payment 25
under G.S. 135-61, then there shall be paid to such person as a lump sum death benefit to the 26
beneficiary that the member shall have nominated designated by electronic submission in a form 27
approved by the Board of Trustees or by written designation duly acknowledged and filed with 28
the Board of Trustees, if such person is Trustees. If no beneficiary is designated or living at the 29
time of the member's death, otherwise then the lump sum death benefit shall be paid to the 30
member's legal representatives, a representative. The lump sum death benefit payable under this 31
subsection shall be equal to the excess, if any, of the accumulated contributions of the member 32
at his the member's date of retirement over the total of the retirement allowances paid to him the 33
member prior to his death. 34
(d) In the event that If a retirement allowance becomes payable to the spouse of a former 35
member under the provisions of subsection (a) or subsection (b) above, of this section or to the 36
designated survivor of a former member under one of the optional modes of payment under 37
G.S. 135-61, and such that retirement allowance to the spouse shall terminate terminated on the 38
remarriage or death of the spouse, or on the death of spouse or the designated survivor, survivor 39
before the total of the retirement allowances paid to the former member and his the spouse or the 40
designated survivor combined equals the amount of the member's accumulated contributions at 41
his the member's date of retirement, then the excess of such those accumulated contributions over 42
the total of the retirement allowanc es paid to the former member and his the spouse or the 43
designated survivor combined shall be paid in a lump sum to such person as the beneficiary that 44
the member shall have nominated designated by electronic submission in a form approved by the 45
Board of Trustees or by written designation duly acknowledged and filed with the Board of 46
Trustees, if such person Trustees. If no beneficiary is designated or is living at the time such 47
payment under this subsection falls due, otherwise then the lump sum shall be paid to the former 48
member's legal representatives. 49
(e) In the event of the death of If a retired former judge dies while in receipt of a 50
retirement allowance under the provisions of G.S. 135-58(d), then there shall be paid to the 51
General Assembly Of North Carolina Session 2025
Page 16 Senate Bill 359-First Edition
former judge's surviving spouse, if any, an annual retirement allowance payable monthly, which 1
monthly. The monthly payments shall commence on the first day of the calendar month next 2
following the date of death of the former judge and shall be continued on the first day of each 3
month thereafter until the remarriage or death of the spouse. The amount of any such the 4
retirement allowance under this subsection shall be equal to one half of the allowance that was 5
payable to the former judge for the month immediately prior to his the month of death, reduced 6
by two percent (2%) thereof for each full year, if any, by which the age of t he former judge at 7
date of death exceeds that of his the spouse. 8
… 9
(k) Upon the death of a retired member on or after January 1, 2015, there All retired 10
members may elect to participate in the fully contributory death benefit for retirees. All of the 11
following apply to the fully contributory death benefit for retirees: 12
(1) Elections to participate in the fully contributory death benefit for retirees shall 13
be made prior to the member's death and no later than 60 calendar days from 14
the effective date of the member's retirement. Elections shall be received by 15
the Board of Trustees prior to the death of the retired member. 16
(2) Retired members electing to receive a fully contributory death benefit under 17
this subsection shall continuously pay monthly premiums on a fully 18
contributory basis, as d etermined by the Board of Trustees. Premium 19
payments shall be made through retirement allowance de ductions or other 20
methods adopted by the Board of Trustees. 21
(3) If a retired member who has elected to receive a fully contributory death 22
benefit under this subsection dies, then, upon receipt of proof of death that is 23
satisfactory to the Board of Trustees, a lump sum death benefit amount shall 24
be paid a death benefit to the person or persons beneficiary or beneficiaries 25
designated by the member or, if not survived by a designated beneficiary, 26
member. If no beneficiary is designated or living, then the death benefit shall 27
be paid to the deceased retired member's legal representative; provided the 28
retired member has elected, when first eligible, to make, and has continuously 29
made, in advance of the member's death required contributions as determined 30
by the Board of Trustees on a fully contributory basis, through retirement 31
allowance deductions or other methods adopted by the Board of Trustees, to 32
a group death benefit trust fund, the North Carolina Teachers' and State 33
Employees' Benefit Trust, administered by the Board of Trustees separate and 34
apart from the Retirement System's Annuity Savings Fund and Pension 35
Accumulation Fund. Employer and non-employer contributions to the Benefit 36
Trust and earnings on those contributions are irrevocable. The assets of the 37
Benefit Trust are dedicated to providing benefits to members and beneficiaries 38
in accordance with the Plan's benefit terms. The assets of the Benefit Trust are 39
not subject to the claims of creditors of the employees and non -employees 40
making contributions to the Benefit Trust, are not subject to the claims of any 41
creditors of the Benefit Trust's trustees and administrators, and are not subject 42
to the claims of creditors of members and beneficiaries. Benefit Trust assets 43
may be used for reasonable expenses to administer benefits provided by the 44
Fund as approved by the Board of Trustees.representative. 45
(4) The amount of the lump sum fully contributory death benefit payable under 46
this subsection shall be a lump-sum payment in the amount of is one of the 47
following: 48
a. If the death occurred on or after the first day of the twenty-fifth month 49
of coverage under this subsection, then the amount payable is ten 50
thousand dollars ($10,000) upon the completion of 24 months of 51
General Assembly Of North Carolina Session 2025
Senate Bill 359-First Edition Page 17
contributions required under this subsection. Should death occur 1
($10,000). 2
b. If the death occurred before the completion of 24 months of 3
contributions required under this subsection, the deceased retired 4
member's designated beneficiary or beneficiaries, or legal 5
representative if not survived by a designated beneficiary, shall be paid 6
first day of the twenty-fifth month of coverage under this subsection, 7
then the amount payable is the sum of the retired member's 8
contributions required by this subsection premium payments made in 9
accordance with this subsection plus interest in an amount to be 10
determined by the Board of Trustees." 11
12
PART IV. STANDARDIZA TION OF DEATH BENEFI TS FOR MEMBERS OF TH E 13
LEGISLATIVE RETIREMENT SYSTEM 14
SECTION 8.(a) G.S. 120-4.8 is amended by adding a new subdivision to read: 15
"(4d) Benefit Trust. – The North Carolina Teachers' and State Employees' Benefit 16
Trust under G.S. 135-154." 17
SECTION 8.(b) G.S. 120-4.10 reads as rewritten: 18
"§ 120-4.10. Administration of retirement system.Article. 19
(a) The Board of Trustees of the Teachers' and State Employees' Retirement System shall 20
be the trustee of the Retirement System. The provisions of this Article shall be administered by 21
the Board of Trustees. 22
(b) Fully contributory death benefits under this Article are established as a group life 23
insurance plan that is an employee welfare benefit plan that is separate and apart from the 24
Retirement System and administered by the Board of Trustees. Fully contributory death benefits 25
for retirees under this Article are part of the Benefit Trust. All receipts, transfers, appropriations, 26
contributions, investment earnings, and other income associated with the fully contributory death 27
benefits for retirees under this Article shall be deposited in the Benefit Trust. All benefits and 28
expenses against the fully contributory death benefits for retirees under this Article s hall be 29
disbursed from the Benefit Trust." 30
SECTION 8.(c) G.S. 120-4.26A reads as rewritten: 31
"§ 120-4.26A. Benefits on death after retirement. 32
(a) In the event of the death of If a retired member dies while in receipt of a retirement 33
allowance under the p rovisions of this Article, there a lump sum death benefit shall be paid to 34
such person or persons as the beneficiary that the retiree shall have nominated designated by 35
electronic submission in a form approved by the Board of Trustees or by written designation duly 36
acknowledged and filed with the Board of Trustees, if such person or persons Trustees. If no 37
beneficiary or beneficiaries are designated or are living at the time of the retiree's death, otherwise 38
then the lump sum death benefit shall be paid to the retiree's legal representatives, a 39
representative. The lump sum death benefit payable under this subsection is equal to the excess, 40
if any, of the accumulated con tributions of the retiree at the date of retirement over the total of 41
the retirement allowances paid prior to the death of the retiree. 42
(b) In the event that If a retirement allowance becomes that became payable to the 43
designated survivor of a retired memb er under the provisions of G.S. 120-4.26 and such 44
retirement allowance to the survivor shall terminate terminates upon the death of the survivor 45
before the total of the retirement allowances paid to the retiree and the designated survivor 46
combined equals the amount of the accumulated contributions of the retiree at the date of 47
retirement, then the excess, if any, excess of such those accumulated contributions over the total 48
of the retirement allowances paid to the retiree and the survivor combined shall be paid in a lump 49
sum to such person or persons as the beneficiary that the retiree shall have nominated designated 50
by electronic submission in a form approved by the Board of Trustees or by written designation 51
General Assembly Of North Carolina Session 2025
Page 18 Senate Bill 359-First Edition
duly acknowledged and filed with the Board of Trustees, if such person or persons are Trustees. 1
If no beneficiary is designated or living at the time such payment falls due, otherwise the lump 2
sum payment becomes due under this subsection, then the payment shall be made to the retiree's 3
legal representative." 4
SECTION 8.(d) G.S. 120-4.27 reads as rewritten: 5
"§ 120-4.27. Death benefit.while in service; fully contributory death benefit for retirees. 6
(a) The designated beneficiary of a member who dies while in service after completing 7
one year of creditable service shall receive a lump -sum payment of an amount equal to the 8
deceased member's highest annual salary , to a maximum of fifteen thousand dollars ($15,000). 9
For purposes of this death benefit "in service" means currently serving as a member of the North 10
Carolina General Assembly. "In service" also means service in the Uniformed Services, as that 11
term is defined in section 4303(16) of the Uniformed Services Employment and Reemployment 12
Rights Act, Public Law 103-353, if that service begins during the member's term of office. If the 13
participant does not return immediately after that service to employment with a covered employer 14
in this Retirement System, then the participant shall be deemed "in service" until the date on 15
which the participant was first eligible to be separated or released from his or her involuntary 16
military service. 17
The death benefit provided by this section shall be designated a group life insurance benefit 18
payable under an employee welfare benefit plan that is separate and apart from the Retirement 19
System but under which the members of the Retirement System shall participate and be eligible 20
for group life insurance benefits. The Board of Trustees is authorized to provide the death benefit 21
in the form of group life insurance either by purchasing a contract or contracts of group life 22
insurance with any life insurance company or companies licensed and authorized to transact 23
business in the State of North Carolina for the purpose of insuring the lives of qualified members 24
in service, or by establishing or affiliating with a separate trust fund. 25
Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 26
of the Retirement System or Retirement Fund on or after July 1, 1988, but before January 1, 27
1999, there shall be paid a death benefit to the surviving spouse of a deceased retired member, 28
or to the deceased retired member's legal representative if not survived by a spouse; provided the 29
retired member has elected, when first eligible, to make, and has continuously made, in advance 30
of his death required contributions as determined by the Retirement System on a fully 31
contributory basis, through retirement allowance deductions or other methods adopted by the 32
Retirement System, to a group death benefit trust fund administered by the Board of Trustees 33
separate and apart from the Retirement System's Annuity Savings Fund and P ension 34
Accumulation Fund. This death benefit shall be a lump -sum payment in the amount of five 35
thousand dollars ($5,000) upon the completion of twenty -four months of contributions required 36
under this subsection. Should death occur before the completion of twenty-four months of 37
contributions required under this subsection, the deceased retired member's surviving spouse or 38
legal representative if not survived by a spouse shall be paid the sum of the retired member's 39
contributions required by this subsection plus interest to be determined by the Board of Trustees. 40
Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 41
of the Retirement System or Retirement Fund on or after January 1, 1999, but before July 1, 42
2004, there shall be paid a death benefit to the surviving spouse of a deceased retired member, 43
or to the deceased retired member's legal representative if not survived by a spouse; provided the 44
retired member has elected, when first eligible, to make, and has continuously made, in advance 45
of his death required contributions as determined by the Retirement System on a fully 46
contributory basis, through retirement allowance deductions or other methods adopted by the 47
Retirement System, to a group death benefit trust fund a dministered by the Board of Trustees 48
separate and apart from the Retirement System's Annuity Savings Fund and Pension 49
Accumulation Fund. This death benefit shall be a lump -sum payment in the amount of six 50
thousand dollars ($6,000) upon the completion of 24 months of contributions required under this 51
General Assembly Of North Carolina Session 2025
Senate Bill 359-First Edition Page 19
subsection. Should death occur before the completion of 24 months of contributions required 1
under this subsection, the deceased retired member's surviving spouse or legal representative if 2
not survived by a spouse shall be paid the sum of the retired member's contributions required by 3
this subsection plus interest to be determined by the Board of Trustees. 4
Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 5
of the Retirement System or Retirement Fund on or after July 1, 2004, but before July 1, 2007, 6
there shall be paid a death benefit to the surviving spouse of a deceased retired member, or to the 7
deceased retired member's legal representative if not survived by a spouse ; provided the retired 8
member has elected, when first eligible, to make, and has continuously made, in advance of his 9
death required contributions as determined by the Retirement System on a fully contributory 10
basis, through retirement allowance deductions or other methods adopted by the Retirement 11
System, to a group death benefit trust fund administered by the Board of Trustees separate and 12
apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund. This 13
death benefit shall be a lump-sum payment in the amount of nine thousand dollars ($9,000) upon 14
the completion of 24 months of contributions required under this subsection. Should death occur 15
before the completion of 24 months of contributions required under this subsection, the deceased 16
retired member's surviving spouse or legal representative if not survived by a spouse shall be 17
paid the sum of the retired member's contributions required by this subsection plus interest to be 18
determined by the Board of Trustees. 19
Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 20
of the Retirement System or Retirement Fund on or after July 1, 2007, but before January 1, 21
2015, there shall be paid a death benefit to the surviving spouse of a deceased retired member, 22
or to the deceased retired member's legal representative if not survived by a spouse; provided the 23
retired member has elected, when first eligible, to make, and has continuously made, in advance 24
of his death required contributions as determined by the Retirement System on a fully 25
contributory basis, through retirement allowance deductions or other methods adopted by the 26
Retirement System, to a group death benefit trust fund administered by the Board of Trustees 27
separate and apart from the Retiremen t System's Annuity Savings Fund and Pension 28
Accumulation Fund. This death benefit shall be a lump -sum payment in the amount of ten 29
thousand dollars ($10,000) upon the completion of 24 months of contributions required under 30
this subsection. Should death occur before the completion of 24 months of contributions required 31
under this subsection, the deceased retired member's surviving spouse or legal representative if 32
not survived by a spouse shall be paid the sum of the retired member's contributions required by 33
this subsection plus interest to be determined by the Board of Trustees. 34
Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member 35
of the Retirement System or Retirement Fund on or after January 1, 2015, there 36
(b) All retired members may elect to participate in a fully contributory death benefit for 37
retirees. All of the following apply to the fully contributory death benefit for retirees: 38
(1) Elections to participate in the fully contributory death benefit for retirees shall 39
be made prior to the member's death and no later than 60 calendar days from 40
the effective date of the member 's retirement. Elections shall be received by 41
the Board of Trustees prior to the death of the retired member. 42
(2) Retired members electing to receive a fully contributory death benefit under 43
this subsection shall continuously pay monthly premiums on a fully 44
contributory basis, as determined by the Board of Trustees. Premium 45
payments shall be made through retirement allowance deductions or other 46
methods adopted by the Board of Trustees. 47
(3) If a retired member who has elected to receive a fully contributory death 48
benefit under this subsection dies, then, upon receipt of proof of the death that 49
is satisfactory to the Board of Trustees, a lump sum death benefit amount shall 50
be paid a death benefit to the person or persons beneficiary or beneficiaries 51
General Assembly Of North Carolina Session 2025
Page 20 Senate Bill 359-First Edition
designated by the member or, if not survived by a designated beneficiary, 1
member. If no beneficiary is designated or living, then the death benefit shall 2
be paid to the deceased retired member's legal representative; provided the 3
retired member has elected, when first eligible, to make, and has continuously 4
made, in advance of the member's death required contributions as determined 5
by the Retirement System on a fully contributory basis, through retirement 6
allowance deductions or other methods adopted by the Retirement System, to 7
a group death benefit trust fund, the North Carolina Teachers' and State 8
Employees' Benefit Trust, administered by the Board of Trustees separate and 9
apart from the Retirement System's Annuity Savings Fund and Pension 10
Accumulation Fund. Employer and non-employer contributions to the Benefit 11
Trust and earnings on those contributions are irrevocable. The assets o f the 12
Benefit Trust are dedicated to providing benefits to members and beneficiaries 13
in accordance with the Plan's benefit terms. The assets of the Benefit Trust are 14
not subject to the claims of creditors of the employees and non -employees 15
making contributions to the Benefit Trust, are not subject to the claims of any 16
creditors of the Benefit Trust's trustees and administrators, and are not subject 17
to the claims of creditors of members and beneficiaries. Benefit Trust assets 18
may be used for reasonable expen ses to administer benefits provided by the 19
Fund as approved by the Board of Trustees.representative. 20
(4) A member shall designate a beneficiary or beneficiaries for the death benefit 21
payable under this subsection by electronic submission in a form approved by 22
the Board of Trustees or by written designation duly acknowledged and filed 23
with the Board of Trustees. 24
(5) The amount of the lump sum fully contributory death benefit payable under 25
this subsection shall be a lump -sum payment in the amount of is one of the 26
following: 27
a. If the death occurred on or after the first day of the twenty-fifth month 28
of coverage under this subsection, then the amount payable is ten 29
thousand dollars ($10,000) upon the completion of 24 months of 30
contributions required under this subsection. Should death occur 31
($10,000). 32
b. If the death occurred before the completion of 24 months of 33
contributions required under this subsection, the deceased retired 34
member's designated beneficiary or beneficiaries, or legal 35
representative if not survived by a designated beneficiary, shall be paid 36
first day of the twenty-fifth month of coverage under this subsection, 37
then the amount payable is the sum of the retired member 's 38
contributions required by premium payments made in accordance with 39
this subsection plus interest in an amount to be determined by the 40
Board of Trustees." 41
42
PART V. TECHNICAL AN D CONFORMING CHANGES RELATED TO 43
RECODIFICATION AND STANDARDIZATION 44
SECTION 9.(a) G.S. 135-5(m) reads as rewritten: 45
"(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 46
designated to receive a return of accumulated contributions shall have the right to elect to receive 47
in lieu thereof the reduced retirement allowance provided by Option 2 of subsection (g) above of 48
this section computed by assuming that the member had retired on the first day of the month 49
following the date of the member's death, provided that all four of the following conditions apply: 50
… 51
General Assembly Of North Carolina Session 2025
Senate Bill 359-First Edition Page 21
For the purpose of this benefit, a member is considered to be in service at the date of his the 1
member's death if his the death occurs within 180 days from the last day of his the member's 2
actual service. The last day of actual service shall be determined as provided in subsection (l) of 3
this section. G.S. 135-170. Upon the death of a member in service, the surviving spouse may 4
make all purchases for creditable service as provided for under this Chapter Article for which the 5
member had made application in writing prior to the date of death, provided that the date of death 6
occurred prior to or within 60 days after notification of the cost to make the purchase. The term 7
"in service" as used in this subsection includes a member in receipt of a benefit under the 8
Disability Income Plan as provided in Article 6 of this Chapter. 9
…." 10
SECTION 9.(b) G.S. 128-27(m) reads as rewritten: 11
"(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 12
designated to receive a return of accumulated contributions shall have the right to elect to receive 13
in lieu thereof the reduced retirement allowance provided by Option two of subsection (g) above 14
of this section computed by assuming that the member had retired on the first day of the month 15
following the date of the member's death, provided that all four of the following conditions apply: 16
… 17
For the purpose of this benefit, a member is considered to be in service at the date of his the 18
member's death if his the death occurs within 180 da ys from the last day of his the member's 19
actual service. The last day of actual service shall be determined as provided in subsection (l) of 20
this section. G.S. 128-38.36. Upon the death of a member in service, the surviving spouse may 21
make all purchases fo r creditable service as provided for under this Chapter for which the 22
member had made application in writing prior to the date of death, provided that the date of death 23
occurred prior to or within 60 days after notification of the cost to make the purchase. 24
…." 25
SECTION 10.(a) G.S. 135-3(c) reads as rewritten: 26
"(c) Members who are participating in an intergovernmental exchange of personnel under 27
the provisions of Article 10 of Chapter 126 may retain their membership status and receive all 28
benefits provided by this Chapter during the period of the exchange provided the requirements 29
of Article 10 of Chapter 126 are met; provided further, that a met. A member participating in an 30
intergovernmental exchange of personnel under Article 10 of Chapter 126 shall, notwithstanding 31
whether the member and the member's employer are making contributions to the member's 32
account during the exchange period, be entitled to the death benefit and, if applicable, benefits 33
under the Death Benefit Plan under Article 8 of this Chapter, if the member otherwise qualifies 34
under the provisions of this Article and provided further Article, except that no duplicate benefits 35
shall be paid." 36
SECTION 10.(b) G.S. 128-24(6) reads as rewritten: 37
"(6) Employees of a sending agency participating in an intergovernmental exchange of 38
personnel under the provisions of Article 10 of Chapter 126 shall remain members entitled to all 39
benefits of the Retirement System provided that the requirements of Article 10 of Chapter 126 40
are met; provided further, that a met. A member may retain membership status while serving as 41
an assigned employee or employee on leave under the provisions of Article 10 of Chap ter 126 42
for purposes of receiving the death benefit and, if applicable, benefits under the Death Benefit 43
Plan regardless of whether he and his the member and the member 's employer are contributing 44
to his the member's account during the exchange period period, except that no duplicate benefits 45
shall be paid." 46
SECTION 11.(a) G.S. 135-8(f) reads as rewritten: 47
"(f) Collection of Contributions. – The following shall apply apply to the collection of 48
contributions:contributions under this Chapter: 49
…." 50
SECTION 11.(b) G.S. 128-30(g) reads as rewritten: 51
General Assembly Of North Carolina Session 2025
Page 22 Senate Bill 359-First Edition
"(g) Collection of Contributions. – The following shall apply apply to the collection of 1
contributions:contributions under this Article: 2
…." 3
SECTION 12.(a) G.S. 143-166.60(b) reads as rewritten: 4
"(b) The Boards of Trustees of the Teachers' and State Employees' Retirement System and 5
the Local Governmental Employees' Retirement System shall jointly administer the Plan and 6
shall, under the terms and conditions otherwise appearing in this Article, provide Plan benefits 7
either (i) by establishing a separate trust fund or, (ii) by causing the Plan to affiliate with a master 8
trust, Plan. The Separate Insurance Benefits Plan is part of the North Carolina Teachers' and State 9
Employees' Benefits Trust, providing the same benefits for participants. Employer and 10
non-employer contributions to the Benefit Trust and earnings on those contributions are 11
irrevocable. The assets of the Benefit Trust are dedicated to providing benefits to participants, 12
surviving spouses, pa rticipants' estates, and persons named by the participant to receive the 13
benefit. The assets of the Benefit Trust are not subject to the claims of creditors of the employees 14
and non-employees making contributions to the Benefit Trust, are not subject to th e claims of 15
any creditors of the Benefit Trust's trustees and administrators, and are not subject to the claims 16
of creditors of participants. Benefit Trust assets may be used for reasonable expenses to 17
administer benefits provided by the Fund as approved b y the Board of Trustees. Benefit Trust 18
established under G.S. 135-154. All receipts, transfers, appropriations, contributions, investment 19
earnings, and other income belonging to the Separate Insurance Benefits Plan shall be deposited 20
in the Benefit Trust. All benefits and expenses against the Separate Insurance Benefits Plan for 21
retirees shall be disbursed from the Benefit Trust." 22
SECTION 12.(b) G.S. 143-166.70(5) is expired. 23
24
PART VI. SURVIVOR'S ALTERNATE BENEFIT CHANGES 25
SECTION 13.(a) G.S. 135-5(m)(1) expires June 30, 2025. 26
SECTION 13.(b) G.S. 135-5(m), as amended by Section 9(a) of this act, reads as 27
rewritten: 28
"(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 29
designated to receive a return of accumulated contributions shall have the right to elect to receive 30
in lieu thereof the reduced retirement allowance provided by Option 2 of subsection (g) of this 31
section computed by assuming that the member had retired on the first day of the month following 32
the date of the member's death, provided that all four of the following conditions apply: 33
… 34
(1a) The member falls into one of the following categories: 35
a. The member had attained the minimum age, creditable service amount, 36
or co mbination of both necessary to be eligible to commence 37
retirement with an early or service retirement allowance. 38
b. The member had completed at least five years of membership service, 39
in which case the retirement allowance shall be computed in 40
accordance w ith G.S. 135-5(b21)(1)c. or G.S. 135-5(b21)(2)c., 41
whichever is applicable , notwithstanding any age or service 42
requirements. In no case shall the retirement allowance under this 43
sub-subdivision be less than the actuarial equivalent of the return of 44
accumulated contributions, computed using the beneficiary's age as of 45
the first day of the month following the date of the member's death. 46
(2) At the time of the member's death, one and only one beneficiary is eligible to 47
receive a return of his the member's accumulated contributions. 48
(3) The member had not instructed the Board of Trustees in writing that he the 49
member did not wish the provisions of this subsection to apply. 50
General Assembly Of North Carolina Session 2025
Senate Bill 359-First Edition Page 23
(4) The member had not commenced to receive a retirement allowance as 1
provided under this Chapter. 2
…." 3
SECTION 13.(c) Subsection (b) of this section is effective July 1, 2025, and applies 4
to member deaths occurring on or after that date. 5
SECTION 14.(a) G.S. 128-27(m)(1) expires on June 30, 2025. 6
SECTION 14.(b) G.S. 128-27(m), as amended by Section 9(b) of this act, reads as 7
rewritten: 8
"(m) Survivor's Alternate Benefit. – Upon the death of a member in service, the beneficiary 9
designated to receive a return of accumulated contributions shall have the right to elect to receive 10
in lieu thereof the reduced retirement allowance provided by Option two of subsection (g) of this 11
section computed by assuming that the member had retired on the first day of the month following 12
the date of the member's death, provided that all four of the following conditions apply: 13
… 14
(1a) The member falls into one of the following categories: 15
a. The member had attained the minimum age, creditable service amount, 16
or combination of both necessary to be eligible to commence 17
retirement with an early or service retirement allowance. 18
b. The member had completed at least five years of membership service, 19
in which case the retirement allowance shall be computed in 20
accordance with G.S. 128-27(b22)(1)c. or G.S. 128-27(b22)(2)c., 21
whichever is applicable, notwithstanding any age or service 22
requirements. In no case shall the retirement allowance under this 23
sub-subdivision be less than the actuarial equivalent of the return of 24
accumulated contributions, computed using the beneficiary's age as of 25
the first day of the month following the date of the member's death. 26
(2) At the time of the member's death, one and only one beneficiary is eligible to 27
receive a return of his the member's accumulated contributions. 28
(3) The member had not instructed the Board of Trust ees in writing that he the 29
member did not wish the provisions of this subsection apply. 30
(4) The member had not commenced to receive a retirement allowance as 31
provided under this Chapter. 32
…." 33
SECTION 14.(c) Subsection (b) of this section is effective July 1, 2025, and applies 34
to member deaths occurring on or after that date. 35
SECTION 15.(a) G.S. 135-63(a1), as amended by Section 7(d) of this act, reads as 36
rewritten: 37
"(a1) Survivor's Alternate Benefit. – The surviving spouse of a member who was age 50 or 38
older with had completed at least five years of membership service at the time of death may elect 39
a survivor's alternate benefit. If the surviving spouse elects a survivor's alternate benefit, then the 40
lump-sum death benefit provided for under subsection (a) of this section shall consist only of a 41
payment equal to the member's final compensation and there shall be paid to the surviving spouse 42
an annual retirement allowance, payable monthly. The monthly payments shall commence on the 43
first day of the calendar month coinciding with or next following the death of the member. All 44
of the following apply to the survivor's alternate benefit: 45
…." 46
SECTION 15.(b) G.S. 120-4.28 reads as rewritten: 47
"§ 120-4.28. Survivor's alternate benefit. 48
(a) The designated beneficiary of If a member who dies in service before retirement but 49
after age 60 and after completing five years of creditable service or after completing 12 years of 50
creditable service service, then the principal beneficiary designated by that member to receive a 51
General Assembly Of North Carolina Session 2025
Page 24 Senate Bill 359-First Edition
return of accumulated contributions under G.S. 120-4.25 is entitled to Option 2 prescribed by 1
G.S. 120-4.26.G.S. 120-4.26, notwithstanding any age or service requirements. 2
(b) In the event that If a retirement allowance becomes payable under this section to the 3
principal beneficiary designated to receive a return of accumulated contributions pursuant to this 4
subsection and that principal beneficiary dies before the total of the retirement allowances paid 5
equals is equal to or greater than the amount of those the member's accumulated contributions 6
over the total of the retirement allowances paid to the beneficiary, contributions, then the 7
allowance excess of those accumulated contributions over the total of the retirement allowance 8
paid to the principal beneficiary shall be paid in a lump sum to the person or persons the member 9
has designated as the contingent beneficiary for return of accumulated contributions, if the person 10
or persons contributions under G.S. 120-4.25. 11
(c) If a retirement allowance becomes payable under this section and the principal 12
beneficiary is not living at the time the payment falls due, then the retirement allowance shall be 13
paid to the contingent beneficiary designated to receive a return of accumulated contributions 14
under G.S. 120-4.25. If that contingent beneficiary dies before the total of the retirement 15
allowances paid is equal to or greater than the amount of the member's accumulated 16
contributions, then the excess of those accumulated contributions over the total of the retirement 17
allowances paid to the contingent beneficiary shall be paid in a lump sum to the contingent 18
beneficiary's legal representative. 19
(d) If no beneficiaries are living at the time the payment required under this section first 20
falls due, otherwise to then the allowance shall be paid in a lump sum to the principal beneficiary's 21
legal representative. In the event that a retirement allowance becomes payable to the contingent 22
beneficiary designated to receive a return of accumulated contributions pursuant to subsection 23
(m) of this section and that beneficiary dies before the total of the retirement allowances paid 24
equals the amount of the accumulated contributions of the member at the date of the member's 25
death, the excess of those accumulated contributions over the total of the retirement allowances 26
paid to the beneficiary shall be paid in a lump sum to the contingent beneficiary's legal 27
representative." 28
SECTION 15.(c) This section is effective July 1, 2025, and applies to member deaths 29
occurring on or after that date. 30
31
PART VII. ENSURE SUF FICIENT FUNDING FOR LINE OF DUTY DEATH 32
BENEFITS 33
SECTION 16.(a) G.S. 135-154, as created and amended by Part I of this act, is 34
amended by adding a new subsection to read: 35
"(e) Separate Fund for Line of Duty Death Benefits. – The Board of Trustees may make 36
additional funding available to the Department of State Treasurer to ensure the timely payment 37
of death benefits awarded by the Industrial Commission under the Public Safety Employees ' 38
Death Benefits Act, Article 12A of Chapter 143 of the General Statutes , by depositing a 39
percentage of the State's employer contribution rate established for the benefits provided under 40
G.S. 135-165 into a separate fund from the Benefits Trust. This percentage shall not exceed four 41
hundredths percent (0.0 4%) in any given fiscal year. The Department of State Treasurer is 42
authorized to use the funds deposited into this separate fund for the sole purpose of paying for 43
death benefits awarded by the Industrial Commission under the Public Safety Employees' Death 44
Benefits Act and may do so o nly if all other State funds appropriated to the Department for the 45
fiscal year for the payment of those death benefits have been fully expended. Any funds deposited 46
by the Department of State Treasurer into a separate fund in accordance with this subsection that 47
remain unspent as of June 30 of the same fiscal year shall be transferred to the Benefit Fund as 48
an additional employer contribution." 49
SECTION 16.(b) This section becomes effective July 1, 2025. 50
51
General Assembly Of North Carolina Session 2025
Senate Bill 359-First Edition Page 25
PART VIII. EFFECTIVE DATE 1
SECTION 17. Except as otherwise provided, this act is effective when it becomes 2
law. 3