Non-Retiree Death Benefits

Return of Contributions and Interest 

• You contribute 6% (7% for Legislative Retirement System) of your eligible compensation to your Retirement System. If you die before you retire, your beneficiary(ies) will receive a return of your contributions plus interest at 4% compounded annually on your prior-year ending balance, through your date of death. Your beneficiary(ies) is entitled to this lump-sum payment even if you are not in active service at the time. You may change your beneficiary(ies) for this benefit at any time prior to retirement.
• At the time of your death, if you are a TSERS, LGERS, or LRS member, have only one eligible beneficiary living, which you designated for the return of your contributions, and you meet the eligibility requirements, your beneficiary may choose to receive a monthly benefit known as the Survivor's Alternate Benefit rather than a return of your contributions.
• Consolidated Judicial Retirement Systems members are required to name the same beneficiary(ies) for both the Return of Contributions and the Death Benefit.

Death Benefit (if all eligibility requirements are met)

• As part of your employment with an employer that participates in the Death Benefit, should you die while you are contributing to the Retirement System, a one-time payment based on your salary may be paid to the beneficiary(ies) that you designate. The specific service requirements, benefit amount, and additional details for each Retirement System are described below. You may change your beneficiary(ies) for this benefit at any time.
• Teachers' and State Employees' Retirement System. Most members of this System are eligible for this benefit. For your beneficiary(ies) to receive this benefit, you must have at least one year of contributing service at your death, and you must be either in active service or within 180 days of your effective termination date (the last day for which you received compensation subject to contributions). The amount of the benefit is equal to the highest consecutive 12 months of salary during the 24 months preceding your death, to a minimum of $25,000 and a maximum of $50,000. (G.S. 135-5).
• Local Governmental Employees' Retirement System. Not all members of this System are eligible for this benefit; see your employer to find out if they chose to participate in this benefit. All law enforcement officers in this System are eligible for this benefit. For your beneficiary(ies) to receive this benefit, you must have at least one year of contributing service at your death, and you must be either in active service or within 180 days of your effective termination date. The amount of the benefit is equal to the highest consecutive 12 months of salary during the 24 months preceding death, to a minimum of $25,000 and a maximum of $50,000. (G.S. 128-27).
• Consolidated Judicial Retirement System. If you are in active service at your death, an amount equal to your final annual rate of compensation will be paid to your beneficiary(ies) plus a one-time payment of your undistributed contributions. However, if you are at least age 50 with five years of service and if your surviving spouse is designated as your single principal beneficiary, instead of the payment of your undistributed contributions, your spouse will have the choice to receive a monthly benefit for life or until remarriage. CJRS members are required to name the same beneficiary(ies) for both the Return of Contributions and the Death Benefit.(G.S. 135-63).
• Legislative Retirement System. For your beneficiary(ies) to receive this benefit, you must have at least one year of contributing service at your death and you must be actively serving in the General Assembly. The amount of this benefit is equal to your highest annual salary, to a maximum of $15,000. (G.S. 120-4) 

Separate Insurance Benefit Plan for Law Enforcement Officers

• The Separate Insurance Benefits Plan is for any law enforcement officer in the state of North Carolina; a law enforcement officer does not have to be a member of a North Carolina retirement system to be eligible for this benefit (G.S. 143-166.60). 
• If you die while you are serving as a law enforcement officer, a benefit of $5,000 will be distributed to your surviving spouse, or if there is no surviving spouse, to your estate. But, you may designate a beneficiary(ies) other than the surviving spouse. If you would like for your spouse to be the beneficiary, you do not need to take any action. 
• Alternately, if you die while you are retired after a career of 20 or more years as a law enforcement officer or in receipt of a disability benefit from any state-administered Retirement System, a benefit of $4,000 will be distributed to your surviving spouse, or if there is no surviving spouse, to your estate. But, you may designate a beneficiary(ies) other than the surviving spouse. If you would like for your spouse to be the beneficiary, you do not need to take any action. 

Survivor’s Alternate Benefit (if all eligibility requirements are met) 

• Member dies in active service or within 180 days from his or her last day of service 
• Only one eligible beneficiary for the return of contributions is living at the time of member's death
• Reached age 60 with 5 years of service OR completed 20 years of service regardless of age (or if a law enforcement officer (LEO) reached age 50 with 15 years as an officer, or 55 with 5 years of service as an officer, or completed 15 years as an officer (regardless of age) if killed in the line of duty) 
• The eligible beneficiary can elect a lifetime monthly benefit under option 2, instead of a lump sum refund of contributions and interest.

Here are some guidelines you should follow when selecting beneficiaries:

• Although there is no limit to the number of principal and contingent beneficiaries you may choose, you must choose at least one principal beneficiary before a contingent can be chosen.
• If you list multiple beneficiaries, you may not assign percentages of any individual; the benefit will be divided equally among the beneficiaries.
• Your beneficiary(ies) cannot be an unborn child, a pet, a church, or institution.
• You don’t need permission from the beneficiary(ies) to make or change the designation; however, if a court order directs you to designate someone as a beneficiary, you must comply with the order.
• You don’t have to make your beneficiary(ies) aware of this designation.
• You don’t have to name relatives as beneficiary(ies).

Types of Beneficiaries

A principal beneficiary will be the first person or people that you select to receive a benefit payment after your death. You may choose one or multiple principal beneficiaries. A contingent beneficiary will be the person or people who will be paid only if all of the principal beneficiaries are deceased at the time of your death. You do not have to select any contingent beneficiaries, but if you do, you must select a principal beneficiary.

You have the option to designate as a beneficiary:

• A living person
• More than one living person to share the benefit equally
• Your estate
• A trustee for a living person

How are death benefits paid to my beneficiary(ies)

• Upon receiving a certified copy of the final death certificate, the Retirement Systems Division will determine what benefits are payable. Any benefit will be paid to the designated principal beneficiary(ies), but if you designated only one principal beneficiary who is deceased at the time of your death, the benefit will be paid to any contingent beneficiary(ies). If you designated multiple co-beneficiaries and one is deceased at the time of your death, the benefit will be paid to the surviving co-beneficiary(ies). 
• If a beneficiary is a minor, payment will be made to one of the following: 
  • The qualified guardian of the minor
  • The Clerk of Court of the County in which the minor resides
  • The minor after he/she attains the age of majority. (Generally, the age of majority in North Carolina is 18.)
• If you named your estate as your beneficiary, or if no named principal or contingent beneficiary is alive at your death: 
  • Payment will be made to your estate after an administrator or executor has qualified.
  • If there is no qualification, payment could be paid to the Clerk of Court to handle according to the laws of the state