Part I.

Recodifies and amends (as detailed below) the specified statutes and portions of statutes to new statutes comprising Article 8 “Death Benefit Plan for State Employees and Retirees,” in GS Chapter 135.  Repeals the remainder of GS 135-7(g) and GS 135-5(l) that are not recodified under the act.

Enacts GS 135-153, containing five defined terms that apply in new Article 8. Defines participating plans to include the Death Benefit Plan (the Death Benefit Plan for State Employees and Retirees under Article 8-TSERS Plan), the Local Government Death Benefit Plan under Part 2 of Article 3 of GS Chapter 128 (LGERS Plan), contributory death benefits available to retired members of the Consolidated Judicial Retirement System under GS 135-64 (JRS Benefit); contributory death benefits available to retired members of the Legislative Retirement System under GS 120-4.27 (LRS Benefit); and the Separate Insurance Benefits Plan under GS 143-166.60 (Separate Plan).

Enacts GS 135-154, concerning the NC Teachers’ and State Employees’ Benefit Trust [Benefit Trust] using the portions of statutes described, with the following changes.  Specifies that the receipts, transfers, appropriations, contributions, investment earnings, and other income belonging of all participating plans are to be deposited in the Benefit Trust, and that the participating plans are the recipient from which all Benefit Trust benefits and expenses are disbursed. Currently, the plans in the Benefit Trust consist of plans governed by various provisions of GS Chapters 120, 128, 135 and 143 (the Plans). Replaces references to those Plans with participating plans. Allows for Benefit Trust funds to be used for reasonable expenses in the administration of the participating plans. Makes technical, organizational, and conforming changes. Allows for the assets of the Benefit Trust to be subject to creditor claims. 

Enacts GS 135-155, establishing the TSERS Plan using the portions of statutes described, with the following changes.  Makes conforming changes to account for changes to Benefit Trust and newly termed TSERS Plan as a participating plan, discussed above. Makes technical changes.

Enacts GS 135-160, concerning the administration of the TSERS Plan using the portions of statutes described, with the following changes. Specifies that the TSERS Plan is to be administered by the TSERS Board of Trustees (TSERS Board). Allows the TSERS Board to adopt temporary or permanent rules as necessary, to administer Article 8.  Makes conforming and technical changes.

Enacts GS 135-165, concerning a death benefit for in-service members using the portions of statutes described, with the following changes. Makes the described death benefits part of the new TSERS plan. Specifies that a member who is not retired and has completed at least one full year of membership in TSERS, is a participant in, and eligible for death benefits under the TSERS Plan in accordance with GS 135-165 (was, completion of a calendar year of service).  Makes conforming, organizational, technical, and clarifying changes.

Enacts GS 135-170, concerning the last day of actual service pertaining to the death benefit for in-service members, using the portions of statutes described, with the following changes. Specifies that if a member is deemed to be in service then the last day of actual service is the last day for which the member contributed to TSERS. Specifies that the last day of actual service for a member on an approved leave of absence but who is not in service, is either the last day for which the member contributed to TSERS or the date on which the member's sick and annual leave expired, whichever is later. Specifies that teachers or State employee members on leave of absence for service as a member of the General Assembly are eligible for the TSERS Plan and that the last of day of service is the most recent legislative day of the General Assembly or their last day of employment as a teacher or State employee, whichever is later. Specifies that the following apply to a member who is either (1) receiving workers' compensation benefits during the period for which the member would have been otherwise eligible to receive short-term benefits or extended short-term benefits under GS 135-105 or (2) a beneficiary under the Disability Income Plan:  

• If the date the member last performed work as a teacher or State employee occurred within 180 days of the date the member died, then the last day of actual service is the last day the member performed that work.  
• If the date the member last performed worked as a teacher or State employee occurred more than 180 days from the date the  member died, then that member is not deemed in active service for the purposes of GS 135-165.

Makes clarifying, technical, conforming, and organizational changes.

Enacts GS 135-175, concerning a fully contributory death benefit for retired members, using the portions of statutes described, with the following changes. Allows all retired members to elect to participate in the TSERS Plan as provided. Requires election to the TSERS Plan be made prior to death and no later than 60 calendar days from the effective date of the member's retirement. Provides for receipt of the election by the TSERS Board. Directs that retired members electing to receive a fully contributory death benefit under the TSERS Plan must continuously pay monthly premiums on a fully contributory basis, as described. Makes organizational, technical, and conforming changes.  

Enacts GS 135-180, concerning the death benefits for members receiving workers compensation or disability income, using the portions of statutes described, with the following changes. Specifies the following criteria that must be met for a member to receive death benefits under the TSERS Plan: the member is not retired or eligible for death benefits under GS 135-165, and that the member passes away on or after 181 days from their last day of service (as described) but before their disability income or workers’ compensation benefits ended. Directs that benefits be paid in a lump sum upon proof of death satisfactory to the TSERS Board. Makes conforming, technical, organizational, and clarifying changes.

Enacts GS 135-185, concerning beneficiaries under the TSERS Plan, as follows. Requires a member to designate beneficiaries as described. Directs that if no designated beneficiaries are living at the time of the member’s death then the benefit will be paid to the member’s legal representative.

Enacts GS 135-190, concerning the reciprocity of the TSERS Plan using the portions of statutes described, GS 135-195, concerning the accumulated contributions, using the portions of statutes described, and GS 135-200 concerning benefits disallowed under Article 8, all with technical and conforming changes.

Part II.

Organizes GS 128-21 through 128-37.29 to Part 1 of Article 3, titled “Local Government Employees Retirement System” in GS Chapter 128. Recodifies and amends (as detailed below) the specified portions of statutes to new sections comprising Part 2 of Article 3, titled “Local Government Death Benefit Plan,” in GS Chapter 128.  Repeals the remainder of (l), (l1), and (l6) of GS 128-27 not recodified by the act. Repeals subsections (l2), (l3), (l4), and (l5) of GS 128-27.

Adds defined terms Benefit Trust to mean the Benefit Trust described in Part I and Death Benefit Plan to mean the LGERS Plan discussed herein, to GS 128-21 (definitions pertaining to LGERS). Makes technical changes.

Enacts GS 128-38.30, concerning the LGERS Plan using the portions of statutes described, with the following changes. Creates the LGERS Plan, which is a group life insurance plan distinct from LGERS. Makes conforming changes and technical changes.

Enacts GS 128-38.31, concerning the administration of the LGERS Plan using the portions of statutes described, with the following changes. Charges the LGERS Board of Trustees (LGER Board) with administering the LGERS Plan.  Allows the LGERS Board to adopt temporary or permanent rules to administer new Part 2. Makes technical and conforming changes.

Enacts GS 128-38.35, concerning the death benefit for in-service members using the portions of statutes described, with the following changes. Clarifies that participation in, and benefits eligibility for, the LGERS Plan only commences when the employer and LGERS’ executive director execute the agreement specified in the section. Clarifies that law enforcement employers participating in LGERS are requires to participate in the LGERS Plan for their law enforcement employees, including funding the cost of the LGERS Plan benefits. Subject to employer participation in the LGERS Plan for members who are not law enforcement officers, a member who has not retired and who has completed at least one full year of membership in LGERS is a participant in, and eligible for the death benefits under, the LGERS Plan. Provides for payment of benefit by a lump sum upon satisfactory proof of death. Makes conforming and technical changes.

Enacts GS 128-38.36, concerning the last day of actual service pertaining to the death benefit for in-service members, using the portions of statutes described, with the following changes. Directs that for LGERS members on a leave of absence but deemed to be in service then the last day of actual services in the last day for which the member made a contribution to LGERS. Specifies that the last day of actual service for a member on an approved leave of absence but who is not in service, is either the last day for which the member contributed to LGERS or the date on which the member's sick and annual leave expired, whichever is later. Specifies that local government employee members on leave of absence for service as a member of the General Assembly are eligible for the LGERS Plan and that the last of day of service is the most recent legislative day of the General Assembly or their last day they performed work as a local government employee, whichever is later. Makes clarifying, technical, organizational and conforming changes.

Enacts GS 128-38.40, concerning a fully contributory death benefit for retired members, using the portions of statutes described, with the following changes. Allows all retired members to elect to participate in the LGERS Plan as provided. Requires election to the LGERS Plan be made prior to death and no later than 60 calendar days from the effective date of the member's retirement. Provides for receipt of the election by the LGERS Board. Directs that retired members electing to receive a fully contributory death benefit under the TSERS Plan must continuously pay monthly premiums on a fully contributory basis, as described. Makes organizational, technical, and conforming changes.

Enacts GS 128-45 (appears to intend GS 128-38.45) concerning beneficiaries under the LGERS Plan, as follows. Requires a member to designate beneficiaries as described. Directs that if no designated beneficiaries are living at the time of the member’s death, then the benefit will be paid to the member’s legal representative.

Enacts GS 128-38.46, concerning accumulated contributions using the portions of statutes described, with conforming and technical changes.

Part III.

Adds Benefit Trust as a defined term to the Judicial Retirement Act at GS 135-53. Makes conforming change to GS 135-52 to account for JRS Plan as a participating plan in the Benefit Trust. Repeals GS 135-63(b) and (d) (outdated surviving spouse provisions). Requires a member to have completed at least one year of membership service before the lump sum death benefit can be paid as described in GS 135-63.  Makes clarifying, technical, conforming and organizational changes.

Repeals GS 135-64 (f) through (j) (concerning surviving spouse benefits paid for members who passed away on certain dates ranging from before January 1, 1974, to December 31, 2014). Adds the JRS Plan, a fully contributory death benefit for retired members, using the portions of statutes described, with the following changes.  Allows all retired members to elect to participate in the JRS Plan as provided. Requires election to the JRS Plan be made prior to death and no later than 60 calendar days from the effective date of the member's retirement. Provides for receipt of the election by the TSERS Board. Directs that retired members electing to receive a fully contributory death benefit under the JRS Plan must continuously pay monthly premiums on a fully contributory basis, as described. Makes organizational, technical, and conforming changes.

Part IV.

Adds Benefit Trust as a defined term to the Legislative Retirement Act at GS 120-4.8. Makes conforming change to GS 120-4.10 to account for JRS Plan as a participating plan in the Benefit Trust. Makes technical changes to GS 120-4.26A (benefits on death after retirement). Modifies GS 120-4.27 (death while in service; fully contributory death benefit for retirees), as follows. Removes provisions requiring the lump sum death benefit capped at $15,000 as described in GS 120-4.27(a) to be provided through purchase of contracts of group life insurance. Adds the JRS Plan, a fully contributory death benefit for retired members, using the portions of statutes described, with the following changes. Allows all retired members to elect to participate in the LRS Plan as provided. Requires election to the LRS Plan be made prior to death and no later than 60 calendar days from the effective date of the member's retirement. Provides for receipt of the election by the TSERS Board. Directs that retired members electing to receive a fully contributory death benefit under the LRS Plan must continuously pay monthly premiums on a fully contributory basis, as described. Makes organizational, technical, and conforming changes.

Removes outdated provisions.

Part V.

Makes technical changes and conforming changes to the following statutes to account for the reorganization detailed in Parts I and II, above: GS 135-5(m) (TSERS survivor’s alternate benefit), GS 128-72(m)(LGERS survivor’s alternate benefit), GS 135-3(c) (TSERS intergovernmental exchanges), GS 128-24(6) (LGERS intergovernmental exchanges), GS 135-8(f) (TSERS collections of contributions), and GS128-30(g) (LGERS collections of contributions).

Makes conforming changes to GS 143-166.60(b), the Separate Insurance Benefits Plan, to account for designation as a participating plan in the Benefits Trust. Designates GS 143-166.70(5) expired (directing the separate trust fund reserves held under the death benefit plan provided for in GS 143-166.02, as it existed prior to January 1, 1986, to be transferred to the separate trust fund for the death benefit plan provided for in GS 128-27).

Part VI.

Sets a sunset date of June 30, 2025, for GS 135-5(m)(1) (TSERS: pertaining to age/service requirements in conjunction with the survivor’s alternate benefit) and GS 128-27(m)(1) (LGERS: pertaining to age/service requirements in conjunction with the survivor’s alternate benefit)

Effective July 1, 2025, amends GS 135-5(m)/GS 128-27(m), as amended by the act, as follows. Adds a new condition for a surviving spouse of a TSERS member to receive an alternate benefit directing that the deceased member must fall into one of the following categories: (1) the member had attained the minimum age, creditable service amount, or combination of both necessary to be eligible to commence retirement with an early or service retirement allowance; or (2) the member had completed at least five years of membership service, in which case the retirement allowance computed as described, notwithstanding any age or service requirements. In no case shall the retirement allowance under option (2) be less than the actuarial equivalent of the return of accumulated contributions, computed using the beneficiary's age as of the first day of the month following the date of the member's death.

Applicable to member deaths occurring on or after July 1, 2025: (1) removes the age requirement from GS 135-63(a1) (survivor’s alternate benefit-JRS) as amended by the act; (2) removes the age requirements, the service requirements if they are under age sixty for a principal beneficiary as described to receive “Option 2” under the LRS, provides for payment of excess contributions to a contingent beneficiary if the principal beneficiary has died, and for benefits payment (as described) to the contingent beneficiary’s legal representative if the person has passed before certain accumulations are paid, as described, and makes technical and conforming changes to GS 128-4.28 (survivor benefits under the LRS).

Part VII.

Effective July 1, 2025, creates a separate line fund for line of duty death benefits in the TSERS Plan as described, in GS 135-154, as amended by the act.