Bill
SB 359
Creates a master Trust to fund and manage state/local retirement death and line-of-duty benefits across TSERS, LGERS, CJRS, and LRS.
Status: Enacted (Chapter 217, 2025). Presented to Governor 9/17/2025; approved 10/01/2025.
Summary
This bill recodifies and standardizes state law governing death benefits for public retirement systems and creates a single, master funding structure to support those benefits. It reorganizes existing statutory provisions, clarifies definitions and procedures, adjusts survivor benefit rules, and establishes an irrevocable master trust intended to ensure reliable funding for death and related disability benefits — including benefits that arise from line-of-duty deaths.
Main purpose and intent
- Modernize, consolidate, and harmonize the statutes that govern death benefits across multiple North Carolina public retirement systems (Teachers’ and State Employees’ Retirement System — TSERS; Local Governmental Employees’ Retirement System — LGERS; Consolidated Judicial Retirement System — CJRS; Legislative Retirement System — LRS).
- Improve clarity and consistency in eligibility, benefit calculation, administration, and funding.
- Create a durable funding vehicle to help ensure death and line-of-duty death benefits are funded and administrable in a coordinated manner.
Key provisions
- New Article 8 added to Chapter 135 (G.S. 135‑153 through G.S. 135‑200), titled “Death Benefit Plan for State Employees and Retirees,” recodifying and relocating many existing provisions from G.S. 135‑5(l), G.S. 135‑7(g), and related sections.
- Establishes the North Carolina Teachers’ and State Employees’ Benefit Trust (Benefit Trust) as a master trust to receive and hold appropriations, transfers, contributions, investment earnings, and other income for the participating death/disability benefit plans.
- The Boards of Trustees of TSERS and LGERS are designated trustees of the Benefit Trust.
- Fund accounting is required to keep each participating plan’s assets separate (no commingling that would permit one plan’s assets to pay another plan’s obligations).
- The Trust is intended to be an irrevocable source of funds, to the extent assets are sufficient, for death and disability benefits and reasonable administrative expenses.
- Identifies the “participating plans” that will be beneficiaries of the Trust, including:
- The Death Benefit Plan (TSERS),
- The Local Governmental Death Benefit Plan (LGERS),
- Contributory death benefits for CJRS and LRS retirees,
- The Separate Insurance Benefits Plan (G.S. 143‑166.60).
- Recodifies and reorganizes statutory language (technical/format changes) for consistency, and transfers specific existing rules into the new Article (see recodification list in Section 1 of the act).
- Amends and standardizes provisions governing survivors’ alternate benefits across the referenced systems and includes provisions intended to secure sufficient funding for line-of-duty death benefits.
Who is affected
- Active members, retirees, survivors, and beneficiaries under TSERS, LGERS, CJRS, and LRS.
- Boards of Trustees for the affected retirement systems (administration and investment duties related to the Trust).
- State and participating local employers (potentially affected by funding decisions or contribution policies).
- Office(s) administering retirement benefits and any entities involved in financing line-of-duty death benefits.
Procedural/timeline notes
- Introduced March 2025; moved through committee referrals and recodification drafting.
- Enrolled and presented to the Governor in September 2025; approved and chaptered October 1, 2025 (Chapter 217, Statutes of 2025).
- Effective upon enactment (the statute’s effective date is the date of gubernatorial approval unless another effective date is specified in the act).
Fiscal and implementation considerations
- The act creates a master funding vehicle and expresses legislative intent to secure funding for death and line-of-duty benefits, but the text provided does not include a detailed fiscal estimate.
- Implementation will require administrative action by the TSERS and LGERS Boards (trust governance, accounting separation, asset transfers or allocations, and any investment policy updates).
- Any changes that increase benefit funding needs (or require cash transfers into the Trust) could have budgetary implications for the State and participating local employers; the precise fiscal impact will depend on subsequent administrative actions and funding decisions.
For readers wanting more detail
- The bill largely reorganizes and moves existing statutory content into a new Article 8 (G.S. 135‑153 to G.S. 135‑200). For precise beneficiary rules, benefit formulas, and how survivor alternate benefits were amended, consult the enacted text of Chapter 217, 2025 (the amended G.S. sections referenced above) and the implementing guidance from TSERS/LGERS Boards.
Compiled from official sources — confirm details with the bill’s official record.
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