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.