SUBCHAPTER 2M ‑ CONTRIBUTORY DEATH BENEFIT FOR
RETIRED MEMBERS
SECTION .0100 ‑ DEFINITIONS AND GENERAL PROVISIONS
20 NCAC 02M .0101 DEFINITIONS
The following definitions apply to the Contributory Death
Benefit for Retired Members:
(1) "Retired member" shall mean a former
teacher, employee or official in receipt of a monthly retirement allowance or
who has a terminated retirement allowance resulting from reemployment or an
optional payment selection (Option 4) from the Teachers' and State Employees' Retirement
System, Local Governmental Employees' Retirement System, Consolidated Judicial
Retirement System, Legislative Retirement System or Legislative Retirement
Fund; however, retired member shall not mean any beneficiary in receipt of a
monthly retirement allowance by reason of the death of a retired member or
former teacher, employee or official.
(2) "Member" shall mean a retired member of
the Teachers' and State Employees' Retirement System, Local Governmental
Employees' Retirement System, Consolidated Judicial Retirement System,
Legislative Retirement System or Legislative Retirement Fund who has elected
coverage and who makes continuous contributions under the Contributory Death
Benefit for Retired Members.
(3) "Surviving spouse" shall mean a living person
who is legally married to a member covered under the Contributory Death Benefit
for Retired Members at the date of death of the member.
(4) "Legal representative" shall mean the
administrator or executor of the estate of a member or the collector of funds
for the estate of the member.
(5) "Retirement system" shall mean the
Teachers' and State Employees' Retirement System, Local Governmental Employees'
Retirement System, Consolidated Judicial Retirement System, Legislative
Retirement System or Legislative Retirement Fund.
(6) "Board of Trustees" of the Contributory
Death Benefit for Retired Members shall mean the Board of Trustees of the
Teachers' and State Employees' Retirement System and the Local Governmental
Employees' Retirement System.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0102 AGENCY AND
AUTHORITY OF DIRECTOR
(a) The agency acting on behalf of the Board of Trustees of
the Contributory Death Benefit for Retired Members is the Department of State
Treasurer, Retirement Systems Division, 325 North Salisbury Street, Raleigh,
North Carolina 27611.
(b) The Director of the Retirement Systems Division shall
make decisions administratively as it relates to the Contributory Death Benefit
for Retired Members in accordance with the statutes and rules and regulations adopted
by the Board of Trustees and previous decisions of the Board of Trustees.
Appeals may be made from the decisions of the director under the same
procedures used for contested cases.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0103 CONTRIBUTORY DEATH BENEFIT TRUST FOR
RETIRED MEMBERS
(a) A trust entitled the Contributory Death Benefit Trust
for Retired Members shall be established for the purpose of collecting all
member contributions, investment of contributions, and payment of benefits and
expenses.
(b) Funds deposited in the Contributory Death Benefit Trust
Retired Members shall be invested in accordance with law and all investment
earnings shall accrue to the Contributory Death Benefit Trust for Retired
Members.
(c) The funds in the Contributory Death Benefit Trust for
Retired Members shall be used for the sole purpose of paying the benefits and
expenses of the Contributory Death Benefit for Retired Members.
(d) Members of the Contributory Death Benefit for Retired
Members do not gain any rights or interest in the earnings on the investments
in the Contributory Death Benefit Trust for Retired Members nor share in any
gains or losses resulting from the mortality experience for the trust beyond
the benefits set forth.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0104 TIME AND DATE
"Date and time" shall be the equivalent date and
time for Raleigh, North Carolina, where and when it becomes necessary to
establish a date and time for payment of benefits, payment or collection of
contributions, effective dates of coverage and cancellation, and other matters
related to the Contributory Death Benefit for Retired Members.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(12); 128‑28(g); 135‑5(1);
135‑6(f); 135‑64(g);
Eff. April 1, 1989.
SECTION .0200 ‑ ELECTION AND CANCELLATION OF COVERAGE
20 NCAC 02M .0201 ELIGIBILITY TO ELECT COVERAGE
(a) A retired member in receipt of a monthly retirement
allowance as a former teacher, employee or official of more than one of the
retirement systems is eligible to elect coverage under each retirement system
from which the member receives a retirement benefit; however, if a retired
member is receiving more than one retirement benefit from the same retirement
system, he may elect coverage only on the basis of one retirement benefit.
(b) A former teacher, employee or official in receipt of
disability benefits from the Disability Income Plan of North Carolina is not in
receipt of a retirement allowance and is not eligible to elect coverage under
the Contributory Death Benefit for Retired Members until such time as the
disability benefit is converted to an unreduced service retirement allowance.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0202 WHEN FIRST ELIGIBLE
A retired member's eligibility to make an election for
coverage is based on the following:
(1) If retired on or before June 1, 1988, the words
"when first eligible" to make an election for coverage will mean 60
days from July 1, 1988 or no later than September 1, 1988.
(2) If retiring on or after July 1, 1988, the words
"when first eligible" to make an election for coverage will mean 60
days from the effective date of retirement under the retirement system.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0203 FORM OF ELECTION
A retired member's election must be made on a Notice of
Election form as provided by the Retirement Systems Division or in lieu thereof
by written notice clearly stating the election of the retired member and
providing all information necessary for the determination of rates and payment
of benefits.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0204 EFFECTIVE DATE OF COVERAGE
Coverage under the Contributory Death Benefit for Retired
Members is not to be delayed beyond the 60 days from the effective date of
retirement or if retired prior to July 1, 1988, not beyond September 1, 1988 and
shall become effective:
(1) the first of the month in which election of
coverage is made provided that the election is received by the Retirement
Systems Division by the 15th of a month but not earlier than July 1, 1988, or
(2) the first of the month following the month in which
the election of coverage is made if the election is received by the Retirement
Systems Division after the 15th of a month but not earlier than July 1, 1988.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0205 CANCELLATION OF COVERAGE
Cancellation of coverage under the Contributory Death
Benefit for Retired Members shall be:
(1) By written notice of cancellation of coverage to
the Board of Trustees with cancellation of coverage becoming effective :
(a) the first day of the month in which the
member's written notice of cancellation is received and no contribution will be
due in that month if written notice of cancellation is received in the offices
of the Retirement Systems Division between the first and the tenth of a month.
(b) the first day of the month following the
month in which written notice of cancellation is received with contributions
due for the month in which written notice is received if the written notice of
cancellation is received in the offices of the Retirement Systems Division
after the tenth of a month.
(2) By non‑payment of monthly contributions if
payment for any month is not received in the offices of the Retirement Systems
Division by the 25th of the month following the month for which the
contribution is due and payable with coverage to be cancelled automatically
effective the first day of the month for which the contribution was due and
payable.
(3) By death of a member.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0206 REINSTATEMENT
Upon cancellation of coverage, coverage cannot be reinstated
nor can a retired member reapply for coverage.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
SECTION .0300 ‑ CONTRIBUTIONS AND BENEFITS
20 NCAC 02M .0301 CONTRIBUTION RATES
(a) The monthly contribution rates shall be established by
resolution of the Boards of Trustees as recommended by the consulting actuary.
The consulting actuary in making a recommended schedule of monthly contribution
rates shall take into consideration mortality experience, selection experience,
actuarial interest rate assumption which may be different from the interest
rate assumption used in the valuation of the liabilities of the retirement
system, administrative and investment costs, and such other factors as may be
appropriate in establishing such schedule of monthly contribution rates.
(b) The schedule of monthly contribution rates established
by resolution of the Boards of Trustees adopted on March 19, 1988, is as
follows:
Age at Monthly
Rate
Effective Date For
Life
Less than 50 $8
50 8
51 9
52 10
53 10
54 11
55 12
56 12
57 13
58 14
59 15
60 16
61 17
62 18
63 20
64 21
65 22
66 24
67 26
68 27
69 29
70 31
71 33
72 35
73 38
74 40
75 43
76 46
77 49
78 52
79 56
80 59
81 63
82 67
83 71
84 75
85 80
86 84
87 89
88 94
89 99
90 105
91 110
92 115
93 120
94 125
95 130
96 140
97 150
98 160
99 170
100 and over 200
The schedule of monthly contribution rates shall be
applicable for members electing coverage effective on or after July 1, 1988 and
shall remain in effect until such resolution, as duly adopted by the Boards of
Trustees, revises such schedule of monthly contribution rates.
(c) The Boards of Trustees may from time to time revise by
resolution the schedule of monthly contribution rates as may be recommended by
the consulting actuary for teachers, employees and officials retiring and
electing an effective date of coverage after the effective date of the
revision. Such revision may be, but is not required to be, applicable to
members electing coverage prior to the effective date of the revision provided
that such revised rates shall not be greater than the rates in effect at the
effective date of coverage for those members electing an effective date of
coverage prior to the effective date of the revision.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(12); 128‑28(g); 135‑5(1); 135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0302 MEMBER CONTRIBUTION
(a) The monthly contribution rate paid by a member shall be
based on the member's nearest age as of the effective date of coverage and the
applicable rates as of that date as set by the Boards of Trustees and will remain
the same as long as the coverage is in effect.
(b) Any misstatement as to the age of the member which
causes the contribution of the member to have been paid at a higher or lower
rate during the period of the coverage of the member not paid or refunded prior
to the death of the member will result in any underpayment of contributions
being offset against the death benefit and any overpayment of contributions
being paid to the surviving spouse or legal representative for the correct age
of the member.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0303 PAYMENT OF CONTRIBUTION
(a) The monthly contributions of members covered under the
Contributory Death Benefit for Retired Members are to be paid monthly to the
Contributory Death Benefit Trust for Retired Members beginning in the month in
which coverage becomes effective and shall continue each month thereafter.
(b) Payment of the monthly contributions shall be deducted
from a member's net monthly retirement allowance from the retirement system if
member's net monthly retirement allowance, after other required deductions, is
sufficient to cover the cost of the contribution; however, if the net monthly
retirement allowance from the retirement system is not sufficient to cover the
cost of the contribution, the Retirement Systems Division shall provide the
member a Notice of Contribution Due within ten days after the determination of
insufficiency with payment of monthly contributions due not later than the 25th
of the month following the determination of insufficiency, and thereafter a Notice
of Contribution Due shall be provided between the first and the fifth of each
month with payment due on or before the 25th of that month.
(c) The contribution due for the month in which the
member's death occurs is to be paid from the final monthly retirement benefit
due in the month of death, or by payment from the member's surviving spouse or
legal representative; provided that, if member's death occurs during the 24‑month
period from the effective date of coverage, the deduction and/or payment of the
contribution for the month in which death occurs may be waived.
(d) Once coverage is elected, the required monthly
contribution must be paid in order to maintain coverage regardless of any
condition which might occur that would terminate or diminish the retirement
benefit the retired member is receiving such as reemployment and the reduction
or termination of retirement benefits by reason of an optional payment plan
selected by the retired member at retirement.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0304 AMOUNT OF BENEFIT PAYABLE
(a) If the member's death occurs on or after the first day
of the month following the 24th month of coverage for which the member has paid
the required contributions, the amount of the benefit payable shall be five
thousand dollars ($5,000.00).
(b) If the member's death occurs prior to the first day of
the month following the 24th month of coverage for which the member has made
the required contributions, the amount of the benefit payable shall be the
total of the monthly contributions made by the member plus interest as set by
the Board of Trustees.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0305 PAYMENT OF INTEREST ON BENEFIT
Interest payable on the monthly contributions of a member
where member's death occurs prior to the first day of the month following the
24th month of coverage:
(1) The annual rate of interest shall be set from time
to time by resolution of the Board of Trustees and, in setting such annual rate
of interest, the Board of Trustees may take into consideration the actuarial
interest rate assumption, yields realized and anticipated on short‑term
investments, cost of investing and administration, and such other factors
affecting interest rates as may be appropriate.
(2) Such interest as set by the Board of Trustees shall
be computed on each monthly payment from the end of the month in which the
monthly payment is paid and on the balance of the monthly contributions and
interest at the beginning of the calendar year to the end of the month in which
the member dies.
(3) The interest rate established by resolution of the
Boards of Trustees, adopted on January 28, 1988, is 6 1/2 percent.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0306 PAYMENT OF BENEFIT
Upon the death of a member, a certified death certificate
and such other documentation as deemed necessary in order to initiate payment
of the death benefit is to be furnished by the member's spouse or legal representative
if not survived by a spouse.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0307 BENEFITS PAYABLE AFTER CANCELLATION
Should death of a former member occur on or after the
effective date of cancellation of coverage, benefits under the Contributory
Death Benefit for Retired Members shall not be due and payable.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.
20 NCAC 02M .0308 REFUNDS
(a) No refund of contributions or interest shall be made if
coverage is cancelled by reason of non‑payment of contributions or if
written notice of cancellation is received 90 or more days after the effective
date of coverage.
(b) Refund of contributions without interest may be made if
coverage is cancelled by written notice of cancellation received prior to 90
days after the effective date of coverage.
History Note: Authority G.S. 120‑4.10; 120‑4.27;
128‑27(l2); 128‑28(g); 135‑5(l);
135‑6(f); 135‑64(g);
Eff. February 1, 1989.