AN ACT MAKING ADMINISTRATIVE AND CONFORMING CHANGES TO THE LAWS GOVERNING THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM, LEGISLATIVE RETIREMENT SYSTEM, CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, THE DISABILITY INCOME PLAN, AND TO OTHER RELATED STATUTES, AS RECOMMENDED BY THE DEPARTMENT OF STATE TREASURER. SL 2023-105. Enacted July 25, 2023. Effective January 1, 2024.
Bill Summaries: H201 RETIREMENT ADMIN CHANGES ACT OF 2023.-AB (NEW)
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Bill H 201 (2023-2024)Summary date: Jul 27 2023 - View Summary
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Bill H 201 (2023-2024)Summary date: Jun 29 2023 - View Summary
Senate amendment to the 2nd edition makes the following changes.
Part VIII.
Amends the second listed condition in GS 128-31(c1) (Local Government Retirement System [LGERS] exemptions from execution and offset of amounts owed by beneficiary) and GS 135-9 (c1) (Teachers and State Employees' Retirement System [TSERS] exemptions from garnishment, attachment and offset of amounts owed by member of beneficiary) to now require that in cases of an overpayment of benefits entirely due to administrative error on the part of LGERS/TSERS, it will be deemed to satisfy its duty to pursue repayment of the overpayment if it offsets any recurring monthly benefit for periods coincident with or following the determination of the overpayment by no more than 25% but not less than 8.5% (was, not less than 25%) of the monthly benefit as computed after payment deductions or by offsetting the amount of the overpayment in two fewer monthly benefit payments when the overpayment amount is less than $500.
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Bill H 201 (2023-2024)Summary date: Mar 21 2023 - View Summary
House committee substitute to the 1st edition makes the following changes. Amends the act's titles.
Part I
Amends GS 135-5(1) (pertaining to the death benefit plan for the Teachers’ and State Employees’ Retirement System [TSERS]), as follows. Provides that the assets of the North Carolina Teachers' and State Employees' Benefit Trust are dedicated to providing benefits to participants, beneficiaries (was, surviving spouses), and the members' estates in accordance with the Plan's benefit terms. Makes conforming changes. Amends GS 135-64(k) (death benefit under Consolidated Judicial Retirement Act [JRA] by removing references to paying death benefits to spouses.
Part II
Further amends GS 135-105(d) (TSERS short-term disability benefits) by specifying that the requirement that upon completion of the initial six months of the short-term disability period, the employer continues to be responsible for the short-term benefits to the participant, requiring notification when the period concludes or the benefits are terminated of the amount of short-term benefits and the State Health Insurance premiums paid by the employer and so that the Plan will reimburse the employer those amounts, applies to short-term disability benefits that began before July 1, 2019. Makes additional clarifying changes. Adds the requirement that the Board of Trustees adopt rules to implement the provisions of this Part.
Part III
Requires The Board of Trustees to adopt rules to implement the provisions of this Part. Removes the requirement in GS 135-105 that required the Department of State Treasurer (DST) to adopt implementing rules related to the extension of the short-term disability benefits of a beneficiary beyond the benefit period of 365 days for an additional period.
Part IV
Adds a new Part to the act as follows. Amends GS 135-105(g), as already amended by Section 3.5 of the act, which allows the Board of Trustees to extend the short-term disability benefits of a beneficiary beyond the benefit period of 365 days for an extended period of not more than 365 days if the Retirement Systems Division determines that the beneficiary's disability is temporary and likely to end within the extended period of short-term disability benefits. Adds that the extended period commences on the first day succeeding the conclusion of the first 365-day short-term disability period, if the beneficiary or participant makes an application for such benefit within 180 days after the short-term disability period ceases, after salary continuation payments cease, or after monthly payments for Workers' Compensation cease, whichever is later. Specifies that this extended period must be treated in the same manner as long-term disability payments in GS 135-106(b) (setting out the formula for calculating, after the commencement of benefits, the benefits payable during the first 36 months of the long-term disability period) for the purposes of GS 135-108. Requires the Board of Trustees to adopt rules to implement the provisions of this Part.
Part V (was, IV)
Makes a technical change.
Deletes former Part V, which amended GS 135-105(g) (pertaining to short-term disability benefits) to amend the starting date for a 365-day extension of short-term disability benefits by providing that the extension commences the first day succeeding the conclusion of the short-term disability period if the beneficiary or participant applies within 180 days after the later of when the short-term disability period ceases, after salary continuation payments cease, or after monthly payments for Workers' Compensation cease.
Deletes former Part VIII, which enacted new subsection GS 135-106(b1) pertaining to reducing the amount of the long-term disability benefit to which a participant or beneficiary is entitled while receiving workers' compensation benefits.
Part VIII (was, Part IX).
Amends GS 128-31 by adding the following. Provides that in the case of an overpayment of benefits under GS Chapter 128 that the Board of Trustees determines was entirely due to administrative error on the part of the Retirement Systems Division, the Retirement Systems Division is deemed to satisfy its duty to pursue repayment of the overpayment if: (1) the Retirement Systems Division offsets any return of contributions, lump sum death benefit payment, retroactive benefit adjustment payment for periods before the determination of the overpayment, or other one-time payment accruing under this Chapter, by the full amount of the payment as computed after payment deductions, and applies the offset toward the overpayment; (2) the Retirement Systems Division offsets any recurring monthly benefit accruing under this Chapter for periods coincident with or following the determination of the overpayment, by not less than 25% of the monthly benefit as computed after payment deductions, and applies the offset toward the overpayment; (3) the wage offset is applied as required; and (4) the setoff debt provisions of GS Chapter 105A are applied as required.
Deletes the proposed subsection(e) to GS 135-9 (pertaining to recovery of funds overpaid to beneficiaries by the North Carolina Retirement Systems Division as fulfillment of its duties to recover overpayment of State funds within a reasonable amount of time) and instead adds the following. Provides that in the case of an overpayment of benefits under GS Chapter 135 that the Board of Trustees determines was entirely due to administrative error on the part of the Retirement Systems Division, the Retirement Systems Division is deemed to satisfy its duty to pursue repayment of the overpayment if: (1) the Retirement Systems Division offsets any return of contributions, lump sum death benefit payment, retroactive benefit adjustment payment for periods before the determination of the overpayment, or other one-time payment accruing under this Chapter, by the full amount of the payment as computed after payment deductions, and applies the offset toward the overpayment; (2) the Retirement Systems Division offsets any recurring monthly benefit accruing under this Chapter for periods coincident with or following the determination of the overpayment, by not less than 25% of the monthly benefit as computed after payment deductions, and applies the offset toward the overpayment; (3) the wage offset is applied as required; and (4) the setoff debt provisions of GS Chapter 105A are applied as required.
Part IX.
Adds a severability clause.
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Bill H 201 (2023-2024)Summary date: Feb 27 2023 - View Summary
Part I
Amends GS 135-5(1) (pertaining to the death benefit plan for the Teachers’ and State Employees’ Retirement System [TSERS]), GS 128-27(l6) (death benefit plan for Local Government Employees’ Retirement System [LGERS]), GS 120-4.27 (death benefit for Legislative Retirement System [LRS]), and GS 135-64(k) (death benefit under Consolidated Judicial Retirement Act [JRA]) as follows. Upon proof of a death of a retired member received on or after January 1, 2015, removes requirement that payment be made to the member’s surviving spouse (if any) if no beneficiary was designated by the decedent. Instead, payment will be made to the decedent’s personal representative if no designated beneficiary has survived the decedent. Makes conforming changes.
Part II
Amends GS 135-105(d) (TSERS short-term disability benefits) to add new language specifying that the Plan shall not reimburse any employer for amounts related to notifications made on or after January 1, 2024.
Part III
Replaces the Medical Board with the Retirement Systems Division of the Department of State Treasurer (Division) as deciding agency for certain types of disability decisions, described in detail below. Makes conforming change to GS 135-6(k) and GS 135-102(d) (pertaining to the Medical Board) to allow for new designation.
Makes clarifying and conforming changes to GS 135-5(a)(5) (pertaining to conversion of disability application to early retirement), GS 135-105(f) (pertaining to eligibility of short-term disability or a preliminary determination on eligibility for long term disability), and GS 135-105(g) (pertaining to extension of short term disability benefits) to indicate that the Division is the deciding agency for applications for extended short-term, rather than the Medical Board.
Further amends GS 135-105 to authorize the Department of State Treasurer (DST) to adopt implementing rules.
Part IV
Amends GS 135-5(g) (TSERS/JRA election of optional allowance), GS 128-27 (LGERS election of optional allowance), and GS 120-4.26 (provisions of the LRS pertaining to benefit payment options) as follows. Changes relevant time period from “until the first payment on account of any benefit becomes normally due, or the member's first retirement check has been cashed” to until the first payment on account of any benefit becomes normally due and the first payment date has occurred” for (1) election of different benefit payment options; (2) revocations of certain options relating to beneficiaries who die before the members (only TSERS/JRA/LGERS); (3) revocations of certain options relating to beneficiary spouses who die before the members (only TSERS/JRA/LRS); (4) benefits options or designated survivor beneficiary. Makes conforming changes throughout. Makes language gender neutral.
Part V
Amends GS 135-105(g) (pertaining to short-term disability benefits) to clarify the starting date for a 365-day extension of short-term disability benefits. Provides that the extension commences the first day succeeding the conclusion of the short-term disability period if the beneficiary or participant applies within 180 days after the later of when the short-term disability period ceases, after salary continuation payments cease, or after monthly payments for Workers' Compensation cease.
Part VI
Amends 135-7(g) (pertaining to master trust and management of funds) as follows. Specifies that the assets of the trust fund will be used only for the exclusive benefit of persons who are or may be entitled to benefits under the Plans. Bars trustees from ever distributing the assets of the trust fund to any entity that is not a state, a political subdivision of a state, or another entity the income of which is excludable from its gross income by application of section 115(1) of the Internal Revenue Code.
Part VII
Amends GS 135-5(g1) (pertaining to the survivors’ alternate beneficiary default-TSERS), GS 128-27(g1) (pertaining to the survivors’ alternate beneficiary default-LGERS), GS 120-4.28 (pertaining to the survivors’ alternate beneficiary default-LRS) as follows. Adds new language allowing for payment of excess funds to contingent beneficiary’s personal representative in a lump sum if the contingent beneficiary dies before the total of the retirement allowances paid equals the amount of the accumulated contributions of the member at the date of the member’s death. (Currently, this language only exists for primary beneficiaries.) Makes clarifying and conforming changes.
Part VIII
Enacts new subsection GS 135-106(b1) pertaining to reducing the amount of the long-term disability benefit to which a participant or beneficiary is entitled while receiving workers' compensation benefits. Sets forth the following formulas that apply. (1) If the participant or beneficiary is entitled to a weekly workers' compensation payment, the monthly payment for workers' compensation must be determined by multiplying the weekly payment by 52 and dividing by 12 and the long-term disability benefit must be reduced by the monthly payment for workers' compensation effective on the first day of the month following the month of initial entitlement for workers' compensation. (2) If the participant or beneficiary is entitled to a lump sum workers' compensation payment equal to a stated weekly or monthly amount for a given number of weeks or months, the monthly payment for workers' compensation must be determined using the stated weekly or monthly amount and the long-term disability benefit must be reduced by the monthly payment for workers' compensation effective on the first day of the month following the month of the lump sum payment. (3) If the participant or beneficiary is entitled to a lump sum workers' compensation payment that is not in reference to a stated weekly or monthly amount, the monthly payment for workers' compensation shall be determined by dividing the lump sum by 500 weeks to arrive at a weekly payment, then multiplying by 52 and dividing by 12, and the long-term disability benefit shall be reduced by the monthly payment for workers' compensation effective on the first day of the month following the month of the lump sum payment. (4) In the case of monthly reduction in the long-term disability benefit arising from a lump sum workers' compensation payment, once the total reductions, without interest, are at least equal to the entirety of the lump sum payment, the member may contact the Retirement Systems Division to request cessation of the monthly payment reduction. The Retirement Systems Division must cease the reduction after verifying that the total reductions are at least equal to the entirety of the lump sum payment. If the Retirement Systems Division determines that the total reductions are greater than the lump sum payment, the Retirement Systems Division shall distribute the excess amount to the member in a lump sum payment. Applies to participants or beneficiaries who become entitled to receive workers' compensation benefits on or after July 1, 2023.
Part IX
Enacts new subsection(e) to GS 135-9 (pertaining to recovery of funds overpaid to beneficiaries by the North Carolina Retirement Systems Division as fulfillment of its duties to recover overpayment of State funds within a reasonable amount of time). Requires that when there is an overpayment of benefits or erroneous payments to a member in a State-administered retirement system or the former Disability Salary Continuation Plan or the Disability Income Plan of North Carolina, including benefits paid to, or State Health Plan premiums or claims paid on behalf of, any member or beneficiary who was determined to have been ineligible for those benefits or unentitled to those amounts due to an administrative error of the Retirement Systems Division, the Retirement System must notify the member or beneficiary. Specifies that any member or beneficiary in receipt of the written notice will have not less than 25% of the net retirement allowance withheld toward the amount owed to the Retirement System until that amount has been paid in full.
Designates general effective date as January 1, 2024, except as otherwise provided.
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Bill H 201 (2023-2024)Summary date: Feb 23 2023 - View Summary
To be summarized.