North Carolina House Bill 86, Increase In-Service Death Benefits/LRS — Proposed Committee Substitute H86-CSSHp-7 [v.1]
Summary
House Bill 86, Proposed Committee Substitute H86-CSSHp-7 [v.1], dated 03/05/2021, General Assembly of North Carolina, Session 2021 (4 pages). Its short title is Increase In-Service Death Benefits/LRS, and it was referred on February 17, 2021. The bill replaces the existing G.S. 120-4.27 death benefit for Legislative Retirement System members who die in service, which pays the member's highest annual salary up to $15,000, with a lump-sum payment of fifty thousand dollars ($50,000). It is retroactively effective to January 1, 2020. Section 2 appropriates $23,892 in recurring funds and $11,946 in nonrecurring funds for the 2020-2021 fiscal year and directs a $35,838 contribution to the Teachers' and State Employees' Benefit Trust by June 30.
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“North Carolina House Bill 86, Increase In-Service Death Benefits/LRS — Proposed Committee Substitute H86-CSSHp-7 [v.1].”
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GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2021
H D
HOUSE BILL 86
PROPOSED COMMITTEE SUBSTITUTE H86-CSSHp-7 [v.1]
03/05/2021 01:37:59 PM
Short Title: Increase In-Service Death Benefits/LRS. (Public)
Sponsors:
Referred to:
February 17, 2021
1 A BILL TO BE ENTITLED
2 AN ACT INCREASING THE DEATH BENEFIT FOR MEMBERS OF THE LEGISLATIVE
3 RETIREMENT SYSTEM WHO DIE WHILE IN SERVICE, APPROPRIATING FUNDS
4 TO THE GENERAL ASSEMBLY FOR THE INCREASED DEATH BENEFIT, AND
5 MAKING TECHNICAL CHANGES TO REORGANIZE THE LEGISLATIVE
6 RETIREMENT SYSTEM DEATH BENEFIT STATUTE.
7 The General Assembly of North Carolina enacts:
8 SECTION 1.(a) G.S. 120-4.27 reads as rewritten:
9 "§ 120-4.27. Death benefit.
10 The designated beneficiary of a member who dies while in service after completing one year
11 of creditable service shall receive a lump-sum payment of an amount equal to the deceased
12 member's highest annual salary, to a maximum of fifteen thousand dollars ($15,000). For
13 purposes of this death benefit "in service" means currently serving as a member of the North
14 Carolina General Assembly. "In service" also means service in the Uniformed Services, as that
15 term is defined in section 4303(16) of the Uniformed Services Employment and Reemployment
16 Rights Act, Public Law 103-353, if that service begins during the member's term of office. If the
17 participant does not return immediately after that service to employment with a covered employer
18 in this System, then the participant shall be deemed "in service" until the date on which the
19 participant was first eligible to be separated or released from his or her involuntary military
20 service.
21 (a) North Carolina Teachers' and State Employees' Benefit Trust. – The Board of
22 Trustees shall administer the North Carolina Teachers' and State Employees' Benefit Trust
23 separate and apart from the Retirement System's Annuity Savings Fund and Pension
24 Accumulation Fund. Employer and nonemployer contributions to the Benefit Trust, and earnings
25 on those contributions, are irrevocable. The assets of the Benefit Trust are dedicated to providing
26 benefits to members and beneficiaries in accordance with the Plan's benefit terms. Benefit Trust
27 assets may be used for reasonable expenses to administer benefits provided by the Fund as
28 approved by the Board of Trustees. The assets of the Benefit Trust are not subject to the claims
29 of any of the following:
30 (1) Creditors of the employees and nonemployees making contributions to the
31 Benefit Trust.
32 (2) Creditors of the Benefit Trust's trustees and administrators.
33 (3) Creditors of members and beneficiaries.
34 (b) Death Benefit Generally. – The death benefit provided by this section shall be
35 designated a group life insurance benefit payable under an employee welfare benefit plan that is
36 separate and apart from the Retirement System but under which the members of the Retirement
*H86-CSSHp-7*
General Assembly Of North Carolina Session 2021
1 System shall participate and be eligible for group life insurance benefits. The Board of Trustees
2 is authorized to provide the death benefit in the form of group life insurance either by purchasing
3 a contract or contracts of group life insurance with any life insurance company or companies
4 licensed and authorized to transact business in the State of North Carolina for the purpose of
5 insuring the lives of qualified members in service, or by establishing or affiliating with a separate
6 trust fund qualified under Section 501(c)(9) of the Internal Revenue Code of 1954, as amended.
7 (c) Death While in Service. – The designated beneficiary of a member who dies while in
8 service after completing one year of creditable service shall receive a lump-sum payment of fifty
9 thousand dollars ($50,000). For purposes of this section, the phrase "in service" means a member
10 who is either of the following:
11 (1) Currently serving as a member of the North Carolina General Assembly.
12 (2) Engaged in service in the Uniformed Services, as that term is defined in
13 section 4303(16) of the Uniformed Services Employment and Reemployment
14 Rights Act, Public Law 103-353, if that service begins during the member's
15 term of office. If the member does not return immediately after that service in
16 the Uniformed Services to employment with a covered employer in the
17 Retirement System, then the member shall be deemed to have been "in
18 service" until the date on which the member was first eligible to be separated
19 or released from involuntary military service.
20 (d) Death of a Retired Member. – Upon receipt of proof, proof satisfactory to the Board
21 of Trustees, Trustees of the death of a retired member of the Retirement System or Retirement
22 Fund Fund, a death benefit shall be paid as follows:
23 (1) If the death of the retired member occurs on or after July 1, 1988, but before
24 January 1, 1999, there shall be paid a death benefit shall be paid to the
25 surviving spouse of a the deceased retired member, or to the deceased retired
26 member's legal representative if not survived by a spouse; provided the retired
27 member has elected, when first eligible, to make, and has continuously made,
28 in advance of his the member's death required contributions as determined by
29 the Retirement System on a fully contributory basis, through retirement
30 allowance deductions or other methods adopted by the Retirement System, to
31 a group death benefit trust fund administered by the Board of Trustees
32 separate and apart from the Retirement System's Annuity Savings Fund and
33 Pension Accumulation Fund. This death benefit shall be a lump-sum payment
34 in the amount of five thousand dollars ($5,000) upon the completion of
35 twenty-four months of contributions required under this subsection. required
36 contributions. Should death occur before the completion of twenty-four
37 months of contributions required under this subsection, required
38 contributions, the deceased retired member's surviving spouse or legal
39 representative if not survived by a spouse shall be paid the sum of the retired
40 member's contributions required by this subsection subdivision plus interest
41 to be determined by the Board of Trustees.
42 (2) Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a
43 retired member of the Retirement System or Retirement Fund If the death of
44 the retired member occurs on or after January 1, 1999, but before July 1, 2004,
45 there shall be paid a death benefit shall be paid to the surviving spouse of a
46 the deceased retired member, or to the deceased retired member's legal
47 representative if not survived by a spouse; provided the retired member has
48 elected, when first eligible, to make, and has continuously made, in advance
49 of his the member's death required contributions as determined by the
50 Retirement System on a fully contributory basis, through retirement allowance
51 deductions or other methods adopted by the Retirement System, to a group
Page 2 House Bill 86 H86-CSSHp-7 [v.1]
General Assembly Of North Carolina Session 2021
1 death benefit trust fund administered by the Board of Trustees separate and
2 apart from the Retirement System's Annuity Savings Fund and Pension
3 Accumulation Fund. This death benefit shall be a lump-sum payment in the
4 amount of six thousand dollars ($6,000) upon the completion of 24 months of
5 contributions required under this subsection. required contributions. Should
6 death occur before the completion of 24 months of contributions required
7 under this subsection, required contributions, the deceased retired member's
8 surviving spouse or legal representative if not survived by a spouse shall be
9 paid the sum of the retired member's contributions required by this subsection
10 subdivision plus interest to be determined by the Board of Trustees.
11 (3) Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a
12 retired member of the Retirement System or Retirement Fund If the death of
13 the retired member occurs on or after July 1, 2004, but before July 1, 2007,
14 there shall be paid a death benefit shall be paid to the surviving spouse of a
15 the deceased retired member, or to the deceased retired member's legal
16 representative if not survived by a spouse; provided the retired member has
17 elected, when first eligible, to make, and has continuously made, in advance
18 of his the member's death required contributions as determined by the
19 Retirement System on a fully contributory basis, through retirement allowance
20 deductions or other methods adopted by the Retirement System, to a group
21 death benefit trust fund administered by the Board of Trustees separate and
22 apart from the Retirement System's Annuity Savings Fund and Pension
23 Accumulation Fund. This death benefit shall be a lump-sum payment in the
24 amount of nine thousand dollars ($9,000) upon the completion of 24 months
25 of contributions required under this subsection. required contributions. Should
26 death occur before the completion of 24 months of contributions required
27 under this subsection, required contributions, the deceased retired member's
28 surviving spouse or legal representative if not survived by a spouse shall be
29 paid the sum of the retired member's contributions required by this subsection
30 subdivision plus interest to be determined by the Board of Trustees.
31 (4) Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a
32 retired member of the Retirement System or Retirement Fund If the death of
33 the retired member occurs on or after July 1, 2007, but before January 1, 2015,
34 there shall be paid a death benefit shall be paid to the surviving spouse of a
35 the deceased retired member, or to the deceased retired member's legal
36 representative if not survived by a spouse; provided the retired member has
37 elected, when first eligible, to make, and has continuously made, in advance
38 of his the member's death required contributions as determined by the
39 Retirement System on a fully contributory basis, through retirement allowance
40 deductions or other methods adopted by the Retirement System, to a group
41 death benefit trust fund administered by the Board of Trustees separate and
42 apart from the Retirement System's Annuity Savings Fund and Pension
43 Accumulation Fund. This death benefit shall be a lump-sum payment in the
44 amount of ten thousand dollars ($10,000) upon the completion of 24 months
45 of contributions required under this subsection. required contributions. Should
46 death occur before the completion of 24 months of contributions required
47 under this subsection, required contributions, the deceased retired member's
48 surviving spouse or legal representative if not survived by a spouse shall be
49 paid the sum of the retired member's contributions required by this subsection
50 subdivision plus interest to be determined by the Board of Trustees.
H86-CSSHp-7 [v.1] House Bill 86 Page 3
General Assembly Of North Carolina Session 2021
1 (5) Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a
2 retired member of the Retirement System or Retirement Fund If the death of
3 the retired member occurs on or after January 1, 2015, there shall be paid a
4 death benefit shall be paid to the person or persons designated by the member
5 or, if the member has not designated a beneficiary, to the surviving spouse of
6 the deceased retired member or, if not survived by a designated beneficiary or
7 spouse, to the deceased retired member's legal representative; provided the
8 retired member has elected, when first eligible, to make, and has continuously
9 made, in advance of the member's death required contributions as determined
10 by the Retirement System on a fully contributory basis, through retirement
11 allowance deductions or other methods adopted by the Retirement System, to
12 a group death benefit trust fund, the North Carolina Teachers' and State
13 Employees' Benefit Trust, administered by the Board of Trustees separate and
14 apart from the Retirement System's Annuity Savings Fund and Pension
15 Accumulation Fund. Employer and non-employer contributions to the Benefit
16 Trust and earnings on those contributions are irrevocable. The assets of the
17 Benefit Trust are dedicated to providing benefits to members and beneficiaries
18 in accordance with the Plan's benefit terms. The assets of the Benefit Trust are
19 not subject to the claims of creditors of the employees and non-employees
20 making contributions to the Benefit Trust, are not subject to the claims of any
21 creditors of the Benefit Trust's trustees and administrators, and are not subject
22 to the claims of creditors of members and beneficiaries. Benefit Trust assets
23 may be used for reasonable expenses to administer benefits provided by the
24 Fund as approved by the Board of Trustees. The death benefit payable under
25 this subsection subdivision shall be a lump-sum payment in the amount of ten
26 thousand dollars ($10,000) upon the completion of 24 months of contributions
27 required under this subsection. required contributions. Should death occur
28 before the completion of 24 months of contributions required under this
29 subsection, required contributions, the deceased retired member's designated
30 beneficiary or beneficiaries, or surviving spouse if not survived by a
31 designated beneficiary, or legal representative if not survived by a designated
32 beneficiary or spouse, shall be paid the sum of the retired member's
33 contributions required by this subsection subdivision plus interest to be
34 determined by the Board of Trustees."
35 SECTION 1.(b) This section is retroactively effective to January 1, 2020, and
36 applies to eligible deaths occurring on or after that date.
37 SECTION 2.(a) There is appropriated from the General Fund to the General
38 Assembly the sum of twenty-three thousand eight hundred ninety-two dollars ($23,892) in
39 recurring funds and the sum of eleven thousand nine hundred forty-six dollars ($11,946) in
40 nonrecurring funds for the 2020-2021 fiscal year for the Legislative Retirement System death
41 benefit under G.S. 120-4.27, as amended by this act.
42 SECTION 2.(b) From the funds appropriated in subsection (a) of this section, the
43 General Assembly shall make a contribution to the Teachers' and State Employees' Benefit Trust
44 in the amount of thirty-five thousand eight hundred thirty-eight dollars ($35,838) by June 30,
45 2021, for the Legislative Retirement System death benefit under G.S. 120-4.27, as amended by
46 this act.
47 SECTION 2.(c) It is the intent of the General Assembly to make adjustments to the
48 required employer salary–related contributions for the 2021-2022 fiscal year to reflect the
49 provisions of this act.
50 SECTION 3. Except as otherwise provided, this act is effective when it becomes
51 law.
Page 4 House Bill 86 H86-CSSHp-7 [v.1]
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