REALISTIC EVALUATION OF ACTUARIAL LIABILITIES.

View NCGA Bill Details2019-2020 Session
House Bill 626 (Public) Filed Thursday, April 4, 2019
AN ACT TO REQUIRE STRESS TESTING FOR THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, AS RECOMMENDED BY THE PEW FOUNDATION; TO MAKE AMENDMENTS RELATED TO THE PENSION SOLVENCY FUND; TO MAKE AMENDMENTS TO SUBROGATION AND THE RIGHT OF RECOVERY OF THE NORTH CAROLINA STATE HEALTH PLAN FOR TEACHERS AND STATE EMPLOYEES; AND TO CLARIFY THE LIEN PRIORITY OF THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM AS IT PERTAINS TO CHARTER SCHOOL PAYMENT PLANS.
Intro. by McNeill, Ross.

Status: Re-ref Com On Rules, Calendar, and Operations of the House (House action) (May 6 2019)
H 626

Bill Summaries:

  • Summary date: May 2 2019 - More information

    House committee substitute to the 1st edition makes the following changes.

    Eliminates the proposed changes set out in previous Section 5 of the act, amending GS 135-48.37, GS 44-49 and GS 44-50 (regarding subrogation of the State Health Plan to all Plan member rights of recovery and the Plan's lien priority to all nongovernmental medial liens and rights). Makes conforming organizational changes.


  • Summary date: Apr 9 2019 - More information

    Amends GS 135-6 to require at least once in each five-year period that the actuary completes an actuarial experience review of (was, make an actuarial investigation into) the mortality, service, and compensation experience of the members and beneficiaries of the Retirement System for Teachers and State Employees. Adds that before undertaking each quinquennial actuarial experience review, the Board of Trustees must report to the NCGA and the Governor on 12 items concerning the Retirement System, including projections of assets, liabilities, pension debt, service costs, employee contributions, employer contributions, net amortization, benefit payments, payroll, and funded ratio for the Retirement System for each of the next 30 years based upon the then-current actuarial assumptions, including the assumed rate of return, the market value of the assets controlled by the Board of Trustees and an explanation of how the actuarial value assigned to those assets differs from the market value of those assets, and an assessment of how the changes of assumptions adopted by the Board of Trustees in the experience review affect any of the other results in the report. Allows the Retirement System Division to increase receipts from the retirement assets of the corresponding retirement system or allows the payment of costs directly from the retirement assets for payment for the administration of the required actuarial experience review, required report, and annual valuation of the assets and liabilities of the System funds.

    Amends GS 143C-4-10 to expand upon the funds received by the Unfunded Liability Solvency Reserve to also include any funds, in an amount directed by the State Treasurer to be transferred, that meet the following: (1) the funds are the result of rebates received by the Department of State Treasurer from a company administering supplemental voluntary insurance benefits authorized under specified provisions; (2) the funds are not owed to a company administering, or individuals participating in, supplemental voluntary insurance benefits; and (3) as determined by the Board of Trustees of the Retirement System, the funds are not needed to pay future administrative costs of the supplemental voluntary insurance benefits.

    Amends GS 135-48.5, which requires that any unencumbered balance in excess of prepaid premiums or charges in the Public Employee Health Benefit Fund at the end of each fiscal year be used in three specified ways in the specified order. Adds, as the second use, that an amount determined by the State Treasurer, subject to approval by the Board of Trustees, not to exceed 50% of any unencumbered balance remaining after providing for incurred but unpresented claims, may be transferred to the Retiree Health Benefit Fund. Amends the final allowed use, which is to improve the plan, to make it as provided by the State Treasurer, subject to approval by the Board of Trustees, instead of as provided by the General Assembly. Makes additional clarifying changes.

    Amends GS 143C-4-10 by prohibiting transferring any portion of the Retiree Health Benefit Fund to the General Fund and providing that any appropriation made to the Fund does not revert.

    Expands GS 135-48.37, subrogating the Plan to all Plan member rights of recovery, including first-party underinsured, MedPay coverage, or third-party insurance, for all medical expenses to the extent the recovery is related to an injury caused by a liable third party. Adds new requirement for all personal injury or wrongful death claims brought by a member or a member’s representative or estate against a third party to include a claim for all medical assistance payments for health care items or services furnished to the member as a result of the injury; deems such a claim that does not include the Plan’s claim to include the Plan’s claim. Makes the Plan’s claim a lien upon any recovery a member or a member’s representative or estate obtains. Makes clarifying changes, specifying that the Plan has the right to first recovery over all nongovernmental medical liens and rights on any amounts recovered related to an injury caused by a liable third party, regardless of the timing of nongovernmental medical liens and rights in relation to the Plan’s liens and rights, who recovered the amount, or how the amount was recovered. Allows the Plan to recover amounts the Plan is entitled to from the member, the member’s representative or estate, or the insurance company (previously, just the member) in the event the member or the member’s representative or estate (previously, just the member) recovers any amount from a liable third party. Makes further changes to make the provisions regarding the Plan’s rights and remedies against members also applicable to members' representatives or estates. Creates a new notification requirement, requiring the members, the member’s representative or estate, or the insurance company to notify the Plan within 14 days of receipt of the proceeds of a settlement or judgment related to a claim under the statute. Further, requires the member, the member’s representative or estate, or the insurance company to distribute the sufficient amount to satisfy the Plan’s lien to the Plan within 30 days of receipt of the proceeds of a settlement or judgment. Provides for the Plan to recover the amount directly through any available remedy. Adds to the prohibition against a lien of the Plan exceeding 50% of the total damages recovered by the member, excluding from the calculation the member’s reasonable and proportionate costs of collection, conclusively determined by the Plan (previously, excluded the member’s reasonable costs of collection only). Adds new provisions providing for situations when liens have priority over the Plan’s right to first recovery. Specifically prohibits the deduction of other liens from the Plan’s right to to recover under the statute. Adds that in the event insufficient funds remain to fully satisfy the Plan’s lien after deducting the member’s or member’s representative or estate’s costs of collection and any priority liens from the total damages recovered, the Plan is entitled to the remaining balance of the total damages recovered.

    Amends Section 3 of SL 2018-84, concerning charter schools electing to cease participation in the Teachers' and State Employees' Retirement System alternatively making payment on withdrawal liability on a payment plan rather than a lump sum payment. Now sunsets the section June 14, 2023. Specifies that any charter school entering a withdrawal liability payment plan before June 14, 2023, has the full three years to complete the plan and the lien priority applies during the entire period of the payment plan.

    Effective July 1, 2019.

     


Printer-friendly: Click to view